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.
We hope you find our posts useful. If you would like some advice with your
potential investment, please call me on 0131 603 4570 or email me on robert@thekeyplace.co.uk.
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