Blodwen Street – Decision to invest
A nice little flip came through today, with a tidy profit margin, perfect to finish the Invest 1 plan off so we decided to take it up, as the numbers work. This property would make a great Buy To Let (BTL) however the current strategy calls for a flip at this time, so we are going with that as Plan A, will make a good rental as plan B, although yield won’t be as good if we spend the renovation budget on Flip.
The property is in Port Talbot, already analysed the area for Gwendoline St, a familiar area, with varying neighbourhoods from low end to high end. It is about 15 minutes from Swansea and we have another property a few hundred metres from this one. We also now know of 2 others in the area and have visited this area a lot, so very familiar.
Some area stats from my favourite Zoopla source:
Area average price: £82,747 (terraced)
There are a lot of single individuals and single parent families in the area, so the HMO strategy should work well here. Blodwen St will be harder to sell to a first time home buying family, whom we will target, due to the lower numbers, but there is a market for it.
The area is typical for a large low skill or medium skill level employer, the steel works with large interests in Football and readership mainly in the Daily Mirror and the Sun newspapers. This should lead to the end terrace property being in demand for a young family that wants the safety of the laneway to teach their children to kick a football around, a bit of cleaning up and it will be a great area for it in the summer.
Flip Renovation: £15,000 (BTL Reno: £5,000)
Total Spend Flip: £69,000 (Total spend BTL: $59,000)
Full return analysis below:
Below here is some more info for people we know and trust. Check out how to read it here.
Plan A – Flip
Time: 6 months
ROI: 11.54% (23.08% pa)
The reason for this is not taking the planning into account, see big value add potential with planning.
Plan B – Rent (with full flip renovation spent)
Cashflow: £273+ pcm
OPT: 17.86% / £12,480 left behind (not acceptable due to flip spend, only 8% if straight BTL)