93 London Road, Penkhull

March 2021, we embarked on a new kind of development project in Penkhull, Stoke-on-Trent.

The purpose of the project was to take a single residential dwelling, in this case an unmodernised four-bedroom terraced house, and transform it into a modern, income-producing entity, creating value that could be recognised commercially.

Given huge demand in the immediate area for professional (medical) and student accommodation we opted to develop studio apartments with their own kitchenettes – remaining within the confines of an HMO licence but providing a unique proposition to the local rental market.

* Warning: Capital at risk. The value of your investments can go down as well as up, so you could get back less than you invested. Suitable for sophisticated investors. *

Former condition

Finished result

The investment…

Purchase price £135,000

Stamp duty £4,050

Professional fees £3,494

Cost of refurbishment £109,000

Contingency used £14,699

Total investment £266,243

GDV/DUV £355,000 ( 75% remortgage at £266,250 gives us our entire investment back, plus £7 )

The income going forward…

Residential income £3,420 PCM ( £38,988 PA incl. 5% void rate )

less: Interest only remortgage £984 PCM ( £11,813 PA )

less: Running costs £1,162 PCM ( £13,944 PA )

Total net income £1,103 PCM / c. £13,200 PA

Return on investment…

Over a ten year period the property will produce £132,000 net income which can be reinvested into future purchases.

If you’re interested in becoming involved with similar opportunities, with the ability to earn excellent fixed returns, please contact us.