UPDATE 16th February 2018: Please note, if you invest in this property you will soon receive the opportunity to vote on an updated end of term strategy for this investment. This may result in the investment term being reduced and the property being sold before the end of the initial term.
Your capital is at risk if you invest.
Read more about why you will receive these votes by clicking here, or learn about the property review process by clicking here.
A modern 2 bedroom, mid-terrace property in Middlesbrough
The property is in great condition, though will undergo a minor interior redecoration to modernize it and hopefully ensure a tenancy as soon as possible
The property is secured at a purchase price of £44,000 which reflects a 35.69% discount to the open market valuation when including the £1,000 renovation fee
The property has a generous sized lounge area that leads to a modern kitchen, which has double glazed UPVC French doors that overlook the well-kept and low maintenance yard. Upstairs there are two double bedrooms and a family sized bathroom including a bath and a shower. The property was built in the 1990s, is reasonably modern and in great condition. However, to try to ensure tenancy as soon as possible, we have provisioned a £1,000 fund for an interior redecoration. Once this has been completed, we anticipate a monthly rental income of £450 will be achieved.
The property is located in a modern cul-de-sac, south of the River Tees and north of the North York Moors National Park. It is situated on the outskirts of Middlesbrough town centre, which can be accessed by the main bus route at the bottom of the property’s road. Popular local attractions including the Cleveland Retail Park, Middlesbrough Institute of Modern Art and the Riverside Stadium (host to the town's football club), can be reached within a short drive. In addition, the main Middlesbrough train station is a 10-minute drive away and connects commuters to Hartlepool and Sunderland within an hour.
Two market appraisals carried out on the 20th of December 2016 and 09 January 2017 value the property at £70,000 and £69,950 respectively as an asking price. Using the average of the two values, £69,975, this equates to the property being purchased at a discount of £25,975 (35.69%) to the open market value (£44,000 purchase price + £1,000 renovation).
The Royal Institute of Chartered Surveyors have predicted a 3% property price increase for the North East. You can see more information on our blog post HERE but please remember that property prices can go down as well as up.
There is an additional ‘Acquisition cost’ (shown as 'Furniture cost') which represents a finance fee paid to PMF B and PMF B3 Ltd, and property management disbursements (auction fee, inventory, checkout, inspection, visit). This structure can provide access to new routes of property sourcing at large discounts. In addition, a monthly Accounting Fee and Corporate Governance fee of £15 and £25 respectively has been factored into the rental yield calculation (this is shown as an annual 'Service Charge' cost and represents £480 of the total).
Please bear with us while we update the names of these fields on the website. To confirm, the projected returns are net of these fees. There is no British Gas utility cover on this property, and the insurance cost of £254.99 per annum reflects the landlord insurance, which is put in place on all investments and also now benefits from a rent recovery option in the unlikely instance that a tenant may withhold payment of rent.