As this is the cheapest property available to buy in Chichester and the selling agent has marketed it as an "IDEAL INVESTMENT OPPORTUNITY" I thought this studio apartment was worth a closer look.
It certainly is beautifully presented throughout - with a smart modern kitchen and bathroom and clean neutral decor throughout. At 298 square feet it's a pretty small space, but for some it will be ample enough and such is its great presentation it should achieve around £575pcm. That would provide a 4.9% yield based on paying the full asking price of £139,950.
This is where normally I would say 'but, it's leasehold, so once you factor in ground rent & service charges the yield will drop significantly". On this occasion though, ground rent is a mere £50 per annum and there's no service charge to pay - just a half share of the buildings insurance, currently £90 for the year.
My only concern with that arrangement however is who organises and pays for any maintenance to the property. Say the roof leaks - do you have to stump up the full cost as the first floor flat? Or is it shared? What if the outside needs painting - will your downstairs neighbour be agreeable and share the cost or are they happy to save the money and see the building aesthetics slip? This is certainly something to consider with this studio apartment, or indeed any leasehold property that doesn't have scheduled maintenance and costings or a reserve fund as part of the lease.
My other reason for suggesting the yield may be lowered overall is due to the typically shorter tenancies you are likely to have at such a property. Consider that as well as the rent the tenant would have to pay the council tax, water and electric bills (there's no gas here - heating is via electric storage heaters) it would soon add up to be a pretty expensive place to live for one. And it's for that reason I tend not to like investing in studio apartments as the tenant turnover is often very high as people soon 'partner up' or realise that a little more money can get them quite a bit more property.
If however you are looking at the lower end of the rental market in regards to budget and you want to buy in Chichester, this well-presented studio apartment could be a decent buy.
It is on the market with Charles Peck and full details can be found on Rightmove via the following link:
http://www.rightmove.co.uk/property-for-sale/property-46428222.html
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