On this edition of Buy to let Gems I’m travelling to Mile End, E3 and focusing on the student rental market in that area.
The covid years have been tumultuous for many East London landlords, even those that own properties near universities. But in the summer of 2021 that all changed and rents went back to normal and some agencies have even said that they had seen all time highs in fact.
This is why we have come to Mile End and why I believe people should invest in something like this property.
This is a 3 bed maisonette in an ex-local authority building within walking distance of Queen Mary University. 2 double rooms and a single. To rent this property to students or even professionals that form more than 1 household, you will need an additional licence from Tower Hamlets council. This should allow up to 4 households and even be allowed to convert the living room to a bedroom, provided the smallest room is larger than 6.5sqm.
Disclaimer: This information was correct at the time of writing this article. If you are purchasing this property or a property like this, please do your due diligence before buying or even reach out to me for the most accurate information at that time.
This property should rent for around £2500 pcm to students in August/Sept time and that’s being conservative. From the pictures this property looks like it’s been decorated to a very nice standard unlike many others on the market right now. In the summer of 2021 my team had achieved £2500 pcm for much lesser properties, therefore I’m very comfortable with this appraisal.
As usual, here’s my breakdown of costs, yields and ROI’s:
The total initial spend is £132,250.00 however the gross yield from that is over 7% and a net of 5.29%. I assumed a service charge of around £1800 per annum as I went to see several properties in that neighbourhood which were around that and some lower. Gross return on investment over 22% and net at almost 17%. These are the types of investments I would hope to be making this year.
There’s definitely capital appreciation to be seen on this property even within the next 2 years I would say, as we are currently experiencing a price dip in many parts of East London. My prediction is that a property like this will sell close to half a million in the next 3 years.
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