Summary:
3 bed house in Chichester Listed for sale on 16/05/19 @ £265,000 Now = £251,750 Rent = £975pcm Yield = 4.6% Last sold for £208,000 in 2019 (+21% in 0 years)
This week's buy-to-let property is a three-bedroom house in Charles Avenue in Chichester. It's an interesting pick because it was also highlighted in February when it was up for auction. My guess then was it would sell for around £230,000, but it actually didn't sell at all! A canny buyer grabbed it for a stonking price of £208,000 though when it came up for auction again the following month.
Even so, I expected it to sell to a first-time buyer or a landlord looking to rent the house out, who would spend a few thousand doing it up to an ok standard (décor and flooring), making it worth around £250,000 and thus meaning there was some equity built-in, but probably not enough for a worthwhile 'buy, do-up and sell'. The house has indeed been done up to an ok standard, which will suit the rental market for this part of Chichester, but the fundamental finish of the house doesn't lean itself to being an easy flip in my opinion - not without attending to the 'OK' kitchen, bathroom, fire alarm system that was left over from its previous setup as an HMO and the gas central heating pipework that has been (not particularly well) tacked on to the walls rather than tunnelled inside them. And so it may be proving, having been first listed around a month ago at £265,000 and already having been dropped to £251,750. IF it sells at, say, £250,000 then on paper there's £42,000 of profit (this is classic 'Homes Under The Hammer' maths). Unfortunately when you factor in the two sets of legal costs, auction fees, stamp duty (that's £7,900 alone based on it being an additional property of the buyer), the refurb costs and estate agents fees to sell, you're likely looking at circa £20,000 of profit, before tax. Sure that's a good figure in just a few months (buyers may have an issue getting a mortgage with Land Registry showing the previous purchase price from just a few months earlier by the way), but there can be a lot of risk at auction and hidden nasties with any project, so it's not a huge margin, which also doesn't take into account the financing costs. If I were the buyer I'd be pleased to have got the property at a great price and would now rent it out for the long-term, possibly re-financing the property in due course to withdraw much of the money spent buying it. The property is on the market with Cubitt & West and full details can be found on Rightmove via the following link: https://www.rightmove.co.uk/property-for-sale/property-81830795.html |
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.
E-mail me on clive@crjlettings.co.uk or call 01243 624 599. Don't forget to visit the links below to view my previous buy-to-let deals and Chichester Property News articles:
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