Our friends and neighbours at Prime Property Agents have in anticipation of their new off plan deal in Nottingham this week released a case study to highlight the success of their last deal with the same local developer. This exclusive off plan deal was first offered to the investors through Prime Property Agents also advertised via Property Secrets in January 2018.
The development consisted of a block of 18 self contained apartments, with both 1 and 2 bedroom units being offered during the build works at up to £25,000 below the target end value.
The case study is based on just one individual investor who purchased units through Prime.
Occupation: Secondary School Teacher.
Needs: To supplement income, create cash flow and acquire an asset that will appreciate in the long term.
Experience: This was our client’s first foray into the property market and required guidance and support throughout the purchase process.
Apartments Purchased: The client’s initial intention was to purchase a 1 bedroom apartment with his partner, however quickly decided to purchase a second apartment with their father in law.
- 1 x 2 bedroom apartment – Off plan price: £102,500
- 1 x 2 bedroom apartment – Off Plan Price: £105,000
Build Process: The client was provided a monthly update by the developer in the form of a newsletter and was also invited down to site to see the progress for themselves. Representatives of the developer, Prime and the letting agent were happy to meet the client at our city centre office and the site itself.
We initially predicted a 12 month build from Feb 2018 however the development was signed off in late December, coming in just ahead of schedule.
The client was pleased with the apartment they purchased and completed with a mortgage secured in early 2019.
A tenant was immediately found through the recommended local managing & lettings agent at £800 pcm, surpassing both ours and our clients expectations. This results in a 9.1% gross rental yield and a sizable monthly cash flow after deductions.
An independent third party estate agent has advised of an open market valuation of £130,000 per apartment.
This means end values are between £25,000 – £27,500 above the initial off plan price offered by Prime Property Agents with yields in excess of what we originally predicted.
- End value: £130,000
- Rent: £800 pcm
- Yield (based on purchase price): 9% +
As you can see by getting in early the investor not only capitalised on the discount in end values of the property’s worth today but also enjoyed growth from the rental market which enabled him to get higher than anticipated rents. Nottingham is consistently perfoming as one of the countries highest yielding cities with demand for housing as high as ever boosted by the cities two world class universities and a growing young population.