1 & 2 bedroom flats, Southgate Crawley
You don’t see this very often. Two flats in the same development at Godolphin Court, Southgate, Crawley, both being marketed at the same price of £180 000.
One of the flats is on with Connells (http://www.rightmove.co.uk/property-for-sale/property-36567399.html?premiumA=true) and the other with Homes Partnership (http://www.rightmove.co.uk/property-for-sale/property-54868772.html).
The difference between the two properties is that one of them is a 2 bedroom flat “in need of updating”, while the other is 1 bedroom flat in what looks like pristine condition from the marketing photos.
So, which one do you buy ? To answer this question, we have to consider a number of factors.
A one bed flat in tip-top condition at Godolphin Court should achieve £775 to £800 pcm. Based on a purchase price of £180000, this gives a maximum gross annual yield of between 5.2% and 5.3%.
What about the 2 bedroom flat ? Well, firstly we would not recommend letting it out in its current condition ! Let’s say for argument’s sake, however, we spend £10k on renovations & re-decorating, to bring it up to the same standard as the one bedroom flat. Now, 2 bedroom flats at Godolphin Court in excellent condition should let for between £900 & £975 pcm. Based on these rental figures and a purchase price of £180000 plus £10k renovation costs, we would expect to achieve a maximum gross annual yield of around 5.7% to 6.2%. If you can get some money off the purchase price, however, your yield will increase still further.
So, by adding value to the 2 bedroom flat and bringing it “up to spec”, you can see that a higher potential yield can be achieved in comparison with the “ready-made package” of the one bedroom property. Of course, this is not always the case. You must be very careful when buying a property that “needs updating” that (a) you do not buy it at too high a price and (b) you do not overspend on renovation works. If you’ve ever watched TV programmes like “Property Ladder” you’ll no doubt have witnessed how easy it is to get carried away and overspend on the initial purchase price as well as the subsequent property renovation.
If you’re looking to buy property to let or develop in Crawley, or would like an independent opinion of your current property project, why not give us a call on 01293 515588 or e-mail us on crawley@northwooduk.com.
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