This 7 bed house on Richmond Avenue on the
Headingley/Hyde Park border has been refurbished to a very high standard.
The location is good - it's on the edge of Hyde Park, so around 20-25 minutes
walk to both Uni's, but is also handily placed for any students from Leeds
Becketts based up at the Headingley Campus. We do get groups with some
based at Headingley and the rest based at the city campus, so this would be
perfect for them.
I've been round the house with one of our
landlords who was interested in buying it, and as I said earlier it has been
done up to a high standard. It's currently let at £94.50 per person per
week including the bills which to be honest I think is a little low. On
the basis that we charge £15pppw for our bills inclusive package, the rent on
this is around £80pppw, or £29,120 per annum which is too cheap. I would
be confident of getting £89pppw or £32,396 per annum. If you were to pay
full asking price, which at the moment is the absolute minimum you will pay,
then that's a return of 8.75%.
For central Headingley and Hyde Park this seems
about the norm at the moment. Whether this will change after the new
stamp duty rates come in, who knows? The student property market in Leeds
is on fire just now, and whilst I'm sure that the impending stamp duty
increases are playing a big part in that, it was very strong before George
Osbourne's autumn statement, so I don't see it dying a death come April 1st.
8.75% is an attractive return, particularly
for those used to returns from single lets, or the rental returns from the
South. So it's a great house in a good location offering a good return,
and I'd be happy for one of our landlords to buy it so that I could manage it
because it would rent very easily each year. However, from my previous
posts you'll know that I prefer to add value where possible, and when that
happens, you should be looking for returns in excess of 10% every time.
Last summer we refurbished around 15 properties for our landlords, and each one
is now enjoying double digit return on investment. So whilst it's a bit
more hassle (mainly for us, not you!), I'd always recommend that route.
