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.