Front elevation
Latest Valuation
£50,000
ROCE
%
Location

9% Net Yield Fully Managed Property Investment

Self-Contained 2 Bedroom Apartment in Wallsend
Guide Price
£50,000

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Key Features

  • Guaranteed 5 Year Rent
  • Bluechip Tenant
  • 9% Net Yield
  • Hands-Free
  • Turnkey Investment
  • Project Managed Refurb

The Property

SELF-CONTAINED TWO BEDROOM SECOND FLOOR APARTMENT - MODERN FITTED KITCHEN

Offered with no chain is this well presented second floor two bedroom apartment situated on Sandown Court, Howdon, Wallsend. The property benefits from gas central heating via radiators (Baxi boiler installed over a year ago) and UPVC double glazing (installed over a year ago).

The property briefly comprises: communal entrance and stairs, entrance hallway, lounge, fitted kitchen with breakfast bar (offering a good range of wall, floor and drawer units), spacious bathroom and two bedrooms. Externally there are communal gardens to the front and rear.

Property features
• No Chain
• Second Floor Apartment
• Two Bedrooms
• Fitted Modern Kitchen
• UPVC Double Glazing Throughout
• Gas Central Heating

Leasehold with 107 years left

Benefits of working with the private company holding the mandate with Mears;
• Negotiated lease contract with government-backed blue-chip tenant
• Negotiated below market value properties
• Turn key investment – Hands-free
• Purchase and setup term managed
• Negotiated 3-5 years pre-agreed guaranteed rental term (likely 10 years due to Mears mandate with the Home Office)
• Arrange local tradesmen and project manage refurb and delivery/installation of furniture and appliances
• No management fees
• No maintenance fees
• No voids
• Negotiated pre-agreed rental increases with inflation
• Seek properties with high yields
• Hassle-free
• All utility bills and council tax paid by the tenant
• Only house families rather than individual rooms
• Return the property in the same condition
• Can sell property in future with no fees

The Financials;

Fixed Asking Price £50,000

Legal Cost £1,500
Renovation £4,500
Furniture and Appliances £3,000
Project Management Fee £2,500
Sourcing fee £3,000
SDLT £1,500

TOTAL COST / CASH BUYER £66,000

Financed buyers:

The purchase price is too low to achieve good finance rates as well as housing asylum seekers where the number of lenders will be restricted.
We have provided an indication below on obtaining finance based on worst case scenario I.E. An LTV of 70% and an interest rate of 7.99%. However, rates can vary between 5-8% and it may be possible to obtain an LTV of 75%.
Experience of landlord and the contract details between tenants and you are also important factors lenders will take into considerations they class this as a “reputation risk”
However, once you own 4 properties you are considered a portfolio landlord which means you can refinance up to 75% against all open market values which will release a significant amount of your cash in.
We have lenders in place ready to finance at this and at a later stage.
Please note the final finance offered will be based on your personal circumstances.

30% Deposit.
Loan £35,000.
Deposit £15,000
7.99% Interest. Interest-only.
Annual £2,797.
Monthly £233

Money in:

£15,000 Deposit
£1,500 Legal Cost
£4,500 Renovation
£3,000 Furniture and Appliances
£2,500 Project Management Fee
£3,000 Sourcing fee
£1,500 SDLT

TOTAL CASH IN £31,000

Cashflow:
Gross rental per annum £5,924 / £494 per month (slightly higher than standard rental rates £433)
Contracted for 5 years. Mears contract with the Home Office runs for 10 years so they are likely to extend the lease.

Less annual costs:
Mortgage £2,797
Buildings insurance £200 per annum (to include the occupancy of Asylum Seekers)
Ground Rent £0
Service Charge £120

Circa net cashflow £2,807 per annum
Circa net cashflow £234 per month

Please note - rent to be paid 30 days in arrears
You will also need to supply, if not already in place;
Certificates – Gas, EPC, Electrical & PAT test

Yields based on all invested funds:

9% Gross Cash Buyer
Based on invested £66,000 with gross income £5,924 per annum

9% Net Cash Buyer
Based on invested £66,000 with net income £5,604 per annum

19% Gross Financed Buyer
Based on invested £31,000 with gross income £5,924 per annum

9% Net Financed Buyer
Based on invested £31,000 with net income £2,807 per annum

9% ROCE Cash Buyer
Based on all monies invested

10% ROCE Financed Buyer
Based on all monies invested

DEPOSIT TO RESERVE: £5,000 (DEDUCTIBLE FROM PURCHASE)
Fully refundable if surveyor downs value or discover undisclosed problems or undisclosed legal issues with title.

Sourcing fee £3,000
Payable at exchange through solicitors i.e. after RICS survey.
Fully refundable if legal issues with title discovered that were previously undisclosed.

Legal Cost £1,500
Your conveyancer's fees. We can recommend solicitors if need be

Renovation £4,500
Excluding VAT

Furniture and Appliances £3,000
Excluding VAT

Exchange
10%

Sold As Seen
The property is sold as seen and all numbers provided are a guide only based on professional opinions and should not be solely relied upon. You must do your own due diligence and seek professional advice if necessary.

Planning Information

N/A

The Plan

Cashflow:
Gross rental per annum £5,924 / £494 per month (slightly higher than standard rental rates £433)
Contracted for 5 years. Mears contract with the Home Office runs for 10 years so they are likely to extend the lease.

Less annual costs:
Mortgage £2,797
Buildings insurance £200 per annum (to include the occupancy of Asylum Seekers)
Ground Rent £0
Service Charge £120

Circa net cashflow £2,807 per annum
Circa net cashflow £234 per month

The Location

Clear views over The Quayside.
Close to all local amenities including shops, schools and easy access to all transport routes.

Nearest stations:
Howdon (0.6mi.)
Hadrian Road (1.0mi.)
Percy Main (1.1mi.)

Nearest schools:
St Aidan's Roman Catholic Primary School (0.2mi.)
Silverdale School (0.2mi.)
Churchill Community College (0.3mi.)

Average estimated value for a house in NE28

£78,024

Last 5 years postcode house price growth 13.60%
Judging by below we would say the open market value to be £50,000

SOLD COMPARABLES;

Rightmove Criteria: First part of postcode. This area only. Sold in last 1 year. Type - Flat. Price - Ascending.

£49,500 Sold May 2019 34 The Avenue, Wallsend, Tyne And Wear NE28 6BT
https://www.rightmove.co.uk/house-prices/detailMatching.html?prop=50688558&sale=9748201&country=england

£52,000 Sold Aug 2019 51 Burn Terrace, Wallsend, Tyne And Wear NE28 7BJ
https://www.rightmove.co.uk/house-prices/detailMatching.html?prop=81010646&sale=10537798&country=england

£53,000 Sold Jul 2019 31 South Terrace, Wallsend, Tyne And Wear NE28 6QE
https://www.rightmove.co.uk/house-prices/detailMatching.html?prop=69819034&sale=10537786&country=england

£57,000 Sold Mar 2019 55 Blackhill Avenue, Wallsend, Tyne And Wear NE28 9XS
https://www.rightmove.co.uk/house-prices/detailMatching.html?prop=31935599&sale=9748393&country=england

£57,000 Sold Apr 2019 29 Ash Grove, Wallsend, Tyne And Wear NE28 6PJ
https://www.rightmove.co.uk/house-prices/detailMatching.html?prop=56665755&sale=9748216&country=england

There are many more comparables of 2-bed flats sold upwards of £60,000

Sale activity
The average estimated value for a flat in NE28: £78,024 Price increase £1,693 (up 2.218%) Over the last 12 months
In the last 12 months, Average sale price £76,945
Properties sold 70
The average rent for a 2 bedroom flat in NE28 is currently: £433 PCM