26th November 2016
One of the ideal ways to make money out of property is to cherry pick a house knowing that the surrounding area is going to go up in value as a result of its regeneration.
We have pulled in a deal in the vibrant and flourishing district of King’s Cross which is currently undergoing one of the most exciting regenerations anywhere in Europe. 67 acres of central London is being transformed into a holistic, cutting edge and highly desirable place in London to live, work and play.
Google have just committed to developing a major headquarters in the heart of this district with the capability of supporting 7,000 jobs. This is just one of many new buildings and investments in this historic quarter of London. The googleplex will be designed by Olympic cauldron designer, Heatherwick Studio, so it is likely to become a major landmark.
Not only could you make money while you are sleeping as multiple developers transform the area close to the property we have secured, but the property itself is seriously under market value by today’s prices and has some exciting development potential to increase its rental yield.
It is rare to find a property with all this upside.
We started negotiating on the deal about several months ago, and in the end we have managed to secure the deal on our terms, at the price we are happy to pay which equates to just £780 per sq. ft.
To put this price into perspective you have undesirable areas in Wembley now selling for £600 per sq. ft. And properties in the vicinity of this house are fetching £1,100 to £1,200 plus a sq. ft.
And this does not even factor in the regeneration upside.
This is a freehold property which comes arranged as two separate dwellings. This reduces the stamp duty costs through multiple dwelling relief.
The prices per sq. ft. in this location are circa £1,100 per sq. ft. You’re coming in at a 20% discount from day one. This is an area which is still rising.
The plan for this property is to split it into several smaller units, our initial estimates are this property can be split into 8 smaller units.
The effect of this will be to increase the rental figures and to reduce the void periods as well as increase the price per sq. ft. these properties can be sold for in the long term.
The property comes in a rentable condition and therefore can be rented from the day of completion. The strategy would be to rent this property immediately for a 6 month period, this would ensure the mortgage is being paid, during this time the builders and permissions can be lined up so that the buildings work can be started as soon as the property has been vacated.
The price of this property is £1.5m and we would expect around £750k cash is required to close this deal. This is a buy and hold deal, rather than a buy and sell. Buy to hold ensures the investment will benefit from the local regeneration which is taking place.
This does not mean your money is trapped in the deal, as you can refinance the property post development to extract the original capital or at least a large chunk of this amount.
To recap, you will be purchasing a property which is as at least a 20% discount from current market value, the location is undergoing a major regeneration, which means the property will rise in value strongly, and thirdly there is the potential to increase the rental yield and decrease the voids.
The contract is with us now and there a deal to be done for the quick investor. Get in touch now, before it gets snapped up!
Suresh Vagjiani
