Our work at Henllys is certainly something to be proud of, not only for the quality of the finished product but also the environmental credentials of the property. Smart heating systems, solar panels and super insulation make this our most environmentally friendly project to date, though there are many more to come . . .
The property
Originally a late Victorian four bedroom family home, this property had fallen into considerable disrepair and needed a new lease of life. Given its city centre/busy road location and lack of garden, it was never going to continue as a family home and when the opportunity arose it was snapped up by an investor. After consultations with our lettings team the brief was formulated and our Project Manger went to work producing a scheme and a quote for the customer.
To fit all this in, a loft conversion was also incorporated in the design, and with an eye for the future and an ambition for this project to be as green as possible, a 4kw solar PV system was installed on the roof to reduce electricity bills. Following advice from our team further investment was made to insulate all the exterior walls in the property. Not only does this virtually eradicate the chances of condensation and mould growth (cutting down on annual maintenance), it also significantly reduces heat loss, cutting down on energy bills.
In addition to solar PV, a highly efficient electric water heating system was installed to make the most use of the sun’s rays, and for those long dark winter days a gas combi boiler was also installed to top up the system should it ever run low. All of this is controlled remotely by a state-of-the-art thermostat giving the landlord real-time information on the performance of the building directly to their smart phone.
A larger than average property with significant structural work required meant this entire project, from demolition of the first wall, to getting the final set of keys cut, took in total 9 months of work. Prior to the refurbishments the property was pre let by Varcity to a group of 6 students off plan, giving the landlord security of income before the project had even started.
For this project the landlord opted for our full turnkey service where we designed, built, managed, and sourced everything, so the landlord was able to concentrate fully on their life priorities, knowing the project would be delivered on a fixed price and on schedule.
The numbers
Purchase price: £125,000
Total refurbishment costs: £231,000 inc VAT
Bank Valuation on completion of works: £350,000
Gross rental income p/a: £34,320
Net rental income (after utility bills): £31,320
Return on investment (ROI - net rent against costs): 8.79%
Project duration: 9 months
The total cost of the project was £356,000. After completion of the refurbishment works the valuation of the mortgage provider stood at £350,000. This allowed a 75% loan-to-value mortgage of £262,500 to be obtained, which when deducted from the total costs gave a cash cost to the investor of £93,500, delivering an annual return on cash of 33.5%
The annual cost to service the interest only mortgage of £262,500 at an interest rate of 3.7% was £9,708, when mortgage costs are subtracted from the net rental income an annual cash surplus (prior to any other costs) of £21,612 was achieved.
These figures are an approximation of the kind of returns we are looking to achieve when you invest with us. Management and maintenance charges are additional costs that are not considered in the aforementioned figures. A guide to our management fees are set out in our price list which can be found here.
