Investors paid 36.71p per share in the New Listing for this property, and it became available on the Resale market November 9th 2016.
Newly built in Torquay, on the English Riviera, Mulberry House is just 750m from the sea, and the famous Oddicombe beach. We secured these 5 flats straight from a local developer, with a strong yield. Torquay is highly popular with holidayers and homebuyers alike, which will support rental prospects and capital growth. This property represents a great opportunity to diversify into the fast-growing South West of England. The flats are geared to enhance investor returns. View a short video from our Director of Property on why this is a great investment.
- The investment comprises 5 out of 11 flats in this new-build block and is geared at 50% loan-to-value (LTV) of the purchase price. Gearing gives enhanced exposure to property price movements, and the potential for amplified returns; though investors must note amplified negative returns if prices fall.
- By purchasing these flats at their Investment value as opposed to their Vacant Possession Value, investors will benefit from a higher net dividend yield than they would achieve by purchasing individual flats.
- The 22 miles of the Riviera coastline sport some 19 beaches and coves all within an easy drive of Torquay. The lively harbour and international marina, the promenade and seafront gardens and the sandy beaches make it an attractive place to live, as well as to holiday. Our property is just 750m from the beach – a rare luxury that only adds to the rental prospects of this investment opportunity.
- Our exit strategy is to sell the units individually rather than as a single investment, thereby realising the discount that we have secured from buying in bulk.
The mortgage is provided by a major high street bank with a five-year fixed interest rate of 3.1%. After this five-year period, the interest rate will switch to a variable rate based on the bank's base rate. At that point, we will assess the situation and either continue with the variable rate or fix the interest rate for an additional period if necessary. For prudence, we have not included any growth in rental values in our forecasts. Please refer to our blog post on geared property for further details.
The investment comprises 5 two-bedroom flats within a 11 flat residential block. By purchasing these flats at a bulk discount investors will benefit from a higher dividend yield than they would achieve by purchasing individual units.
The flats were acquired brand new and vacant. We have set aside a contingency of £400 per flat for any minor issues that are identified after purchase. There is also a total provision of £3,000 for furnishings.
The total rent forecast for the 5 units is £40,500 per annum. The number of vacant flats may vary month to month. For prudence we have factored into our forecasts an annual void rate of 1.9% and have not included any growth in rental values.
At the forecasted level of rent, Gross Rental Yield would be 5.29% and the forecast Dividend Yield 3.76% (fully accounting for and after mortgage interest payments, purchase costs, furnishings, forecast maintenance, annual voids, corporate taxation and all fees). From April 2016 UK taxpayers are entitled to a £5,000 annual dividend allowance. See our FAQs here for more information.
This transaction was approved by our RICS qualified Director of Property.
The investment comprises 5 two-bedroom flats on the first and second floors. All the flats contain a living room, kitchen and shower room / bathroom. We present here floorplans for 3 of the flats as examples.
All the flats have the benefit of a balcony.
- Share Valuation
- House Price Index
- Rental Income Breakdown
- Latest Valuation
- Latest Share Valuation
- Latest Property Value
- Amortised Purchase Costs
- - £326,230
- Latest Valuation
Note: The estimates provided do not constitute valuation advice; it remains your responsibility to determine valuation.
The HPI is an official statistic that captures changes in the value of residential properties across England and Wales. It is published by the Land Registry, which is a UK government organisation.
Note: Past performance is not a reliable indicator of future results.
Residential property investment is a total returns product. This information is the income component only. Increasing capital values have historically driven most of the return.
- Gross Rent per year (E)
- Service Charges
- - £5,845
- Gross Rental Revenue
- = £34,655
- Gross Rental Yield
- - £20,394
- Annual Interest Payment
- Letting and Management
- Property Insurance
- Allowance for possible voids
- Maintenance Allowance
- Corporation Tax
- Dividends per year
- = £14,261
- Dividend Yield
Note: UK taxpayers are currently entitled to a £5,000 annual dividend allowance. This means that the total income related tax you pay is no greater than if you were to own the property directly. Gross rent and dividends may be lower than estimated. Tax treatment depends on individual circumstances and may be subject to change in future. See FAQs for more information on taxation. The Dividend Yield assumes an investment at the Latest Valuation.
5 flats in Mulberry House, Torquay, TQ1 3PL,