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Case study: Four-week property turnaround from purchase to rental

by | Sep 18, 2019 | Brokers, Clients

The project took place in record turnaround time – four weeks from date of purchase to the tenant moving into the house.

Overview of the CJ21 Properties project

The property is in Boothtown, a suburb of Halifax, an area with a strong rental demand due to proximity to good primary and secondary schools. The deal was conducted off-market and the investors first made their offer on the property over a year prior to purchase. The investors agreed to fit in with the owner’s timeline regarding the sale. A completion date was agreed and postponed twice in the eight months leading up to completion and eventually a firm date was settled on for the end of June 2019.

The purchase was financed through a short-term bridging loan from Shawbrook Bank, to be converted to a BTL mortgage once the work was completed and the property tenanted.

The investors carried out light refurbishment work, including installing a Damp Proof Course (DPC) on the ground floor, a new boiler, insulation in the loft bedroom area and a complete redecoration top to bottom with new carpets. From time of purchase, the investors were able to carry out the works and get a tenant in place within four weeks.

Costs and Return on Investment

Purchase price: £58,500

Sourcing fee: £3,000

Stamp duty: £1,755

Legal fees: £900

Finance costs: £1,200

Cost of works: £6,485

Total Costs: £71,840

 

Value after refurb: £80,000

Rental per calendar month: £495

(Rental per annum: £5,940)

 

Gross yield: 8.26%

Mortgage @ 75%: £60,000

Cash left in: £11,840

Mortgage payment per month: £175

 

Return on Capital Invested: 32.5%

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