Today’s buy to let opportunity from The Falkirk Property Blog
is a wee bit unusual so I suggest that you take the weekend to mull it over.
The property is a 1 bedroom flat at 11 St Crispins Place
in Falkirk. St Crispins Place is just
off the end of the Cow Wynd so it’s very central.
The flat is on the market with Future Property Auctions
with a guide price of £12,000. Why so
cheap I hear you ask? Well the simple
answer is that the property is uninhabitable and needs a complete refurbishment.
Some buy to let investors think this is great as it gives
them an opportunity to create value through the refurbishment, other buy to let
investors think this sort of stuff is just too much hassle. Personally, I do not mind the re-development
work but I am always wary to ensure that I am very clear as to my projected
costs (acquisition price, refurbishment costs and contingency) before I would
buy so that I do not over pay ... overpaying is the easiest way to through away
money in property investing.
Working back. 1
bed flats in this area rent for around £350 pcm. Given the extent of the refurbishment work
required I would be looking for a 15% yield on this property. This gets you to a maximum total cost of
£28,000 which to me means that you need to be able to buy and refurbish the
flat for £28,000 so if you can buy the flat for the guide price of £12,000 that
leaves £16,000 to refurbish the flat. Is
this enough? Best you go and see the property first and get you contractor to
price it up.
This is an interesting opportunity but I appreciate that
it is not everybody’s cup of tea so I suggest you mull if over over the
weekend.
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