12th May 2018
This week we are looking to close a flat in Notting Hill. The property is run down; it seems as if it was rented, and allowed to degenerate. Perhaps this says something about the landlord, it could be inferred the owner is strapped for cash and unable to spend even a moderate amount to keep the property in good shape.
This reflects on the amount of rent you can attract, and perhaps more importantly, the quality of tenant you will get in your property. This in turn has a bearing on how they will treat the property. That’s not to say you keep this standard for every property. If you give out peanuts you get monkeys. If monkeys are what you want to attract, there’s no issue in giving out the peanuts in the first place.
One landlord, who was not using our management service, recently got his Wembley property back in a dilapidated state. It was hard to imagine how a property could get like this whilst people were living in it. The property requires about £15k to £20k work. A deposit of one month had been taken, however, that would hardly make a dent in the works required.
This is a common problem in places like Harrow and Wembley, as houses are often rented supposedly by one party and then sublet on a room by room basis. At times, with as many as four people in a room, effectively using it as a slum hotel. The property then comes back in an incredibly poor state. It may have actually been more profitable to have kept the property empty for the year. In effect, what is happening is the party renting the property is taking money from the landlord’s pocket, and putting it in his own.
Several quotes were taken for the property. Dismayed at the amount it was going to cost, the landlord attempted to rent the property as it is… Lo and behold, he got two offers; one for £1,700 and one for £2,000. This time there was no concern regarding the condition the property will be given back in, as it could not be much worse than what was given out.
However, the property in question, in Notting hill; is not of this calibre. It should have been decorated to a certain standard, even £20k spent effectively, and well, would have delivered the desired result. The property is worth close to £1m.
It seems this vendor is strapped for cash, this is the vibe you get from the property. He has just had a sale fall through, and is anxious to get the deal done with someone else as soon as possible.
There are a number of angles to this deal. The overriding one is not actually to do with price. If the deal can be acquired under-priced, all well and good. But I see development potential with this property. It has the potential for at least one if not two extra floors. This is the driving force of the deal.
Also, much comes down to not just the price, but also to the structure. What I mean is, it is not only the price which can be played with, but the timing between the exchange and the completion.
This is a deal, which in a stronger market would be long gone. The deal has discount as well as development potential. It can be closed at circa £900k. Get in touch now, if you are interested.
Suresh Vagjiani
