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Investment Property Example
Powerscourt Road, Portsmouth
The conversion of a three bedroom Victorian terraced property. Our high yielding rental model using our unqiue layout allowed us to move rent from £650 per month to £950 per month.
This 3 bedroom terraced property was bought in Portsmouth at below market value having identified the vendor’s need for a quick sale.
The property was then modernised and refurbished to maximise the rent achievable, increasing the rent from £650 per month to £950 per month and was immediately let out with over 15 applicants wishing to move into the property.
The total purchase cost, including all legal costs, valuation, renovation costs associated with purchasing the property was £126,000. A fixed interest mortgage of £84,000 was taken out on the property with total cash invested £42,000.
The rental from the property pays for the monthly mortgage payments and the management charges for the property and returns 7% per annum on the cash invested sum.
Summary:
Total cost of purchase & renovation. |
£126,000* |
Funding |
|
Mortgage. |
£84,000 |
Cash invested. |
£42,000 |
£126,000 |
|
Income |
|
Rental income after management. |
£8,232 p.a. |
Mortgage payments @ 6.3% p.a. (fixed for 5 years). |
-£5,292 p.a. |
Net income after mortgage payments and management. |
£2,940 p.a. |
Yield p.a. |
7.0% |
Notes:
*This property was valued at £145,000 (RICS) after the renovation, providing the investor with an instant equity gain of £19,000.
Comparison to market:
Ten 5 Invest achieves significantly greater returns for its investors than the market.
The market: £650 pm / £7,800 p.a. gross rent minus management charges of 12% (including tenant find service) = £6,864 then minus mortgage payments (-£5,292) = £1,572 (3.7% yield).
The market example also does not account for any vacancies.