Summary:
1 bedroom flat in Chichester
Listed for sale on 16/02/17 @ £160,000
Rent = £700pcm
Yield = 5.3%
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My buy-to-let deal this week is actually a bit of a red herring, which should come with a health warning!
On the face of it a one bedroom apartment in Chichester is a reasonable property investment. This one is in great condition, so being priced at £160,000 is not unreasonable and with a tenant in situ paying £700pcm, you'll be getting an attractive 5.3% yield from day one. This is where a little more number crunching and a little more digging might save you from buying a bit of a lemon! You see, it is available at auction - probably because it only has 57 years left on the lease, which is a painfully short time in property terms and it will make this flat unmortgageable. The thing is, it was also available in February's auction - and it didn't receive a single bid! There's been no reduction in price when relisting it in the March auction and it has been joined by a near identical flat in the same block.
The length of the lease isn't the only thing that concerns me - the ground rent is £650pa!!! That is a huge sum and I can only imagine the lease might be stuck in the trap of doubling each decade, making it a painful noose around the property's neck. It will also make extending the lease more expensive than normal, as the freeholder would potentially reset the ground rent to a more normal level...at a price of course. There's also another £550 to pay for the maintenance, insurance and electricity to the block. Suddenly your 5.3% yield has dropped to 4.5%!
It's a shame that what could be a decent buy-to-let, with good size rooms and its close proximity to the centre of Chichester, is tarnished by the paperwork behind the property. Sorting this out could of course provide an opportunity to increase the saleability of the flat.
It is on the market with Cubitt & West and full details can be found on Rightmove via the following link:
http://www.rightmove.co.uk/property-for-sale/property-64694417.html |
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If you are looking for an agent that is well-established, professional and communicative in Chichester, then contact us to find out how we can get the best out of your investment property.
Don't forget to visit the links below to view my previous buy-to-let deals and Chichester Property News articles:
c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP
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