The buy to let opportunity today from The Edinburgh Property Blog needs a complete refurbishment .... and when I say ‘complete’, I mean complete.
The property is a one-bed first-floor flat in Bothwell Street just of Easter Road in Edinburgh ..... it’s in a traditional tenement.
The flat has a large lounge, a kitchen, one bedroom, a toilet and a shower in a cupboard. The property looks as if it has single glazed sash & case windows, no heating (other than an electric fire in the lounge) and on street parking but it is worth checking this ..... as well as whether there is a communal garden.
The asking price for this property, which is on the market with Campbell Smith, is offers over £105,000. Given the requirement for refurbishment, I would expect the property to be popular so say it goes for £125,000. To be honest, I do not know how much it would cost to refurbish, this is something you would need to assess once you have seen the flat (see below for further comments). Once refurbished, I would expect that the flat would let for around £700 - £725 pcm depending on the extent of the refurbishment.
The trick with buying refurbished properties is not to get carried away with idea that because it is cheaper to buy it must be a bargain as, in my experience, people often underestimate the cost of refurbishment (both the refurbishment itself and the finance costs of the associated void period) and so spend too much money on the property itself.
My advice would be to work backwards from the rent you expect to get post refurbishment and rental yield you require to derive a ‘total price’ you are prepared to spend. Once you have this ‘total price’, be brutally honest regarding the costs of refurbishment and deduct this ‘brutally honest’ cost from your ‘total price’ to get the price you are prepared to pay for the property itself. Then stick to this price for the property itself and do not be seduced into paying more.
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