Our property journey begins...

Where our property journey began! We had been looking at stepping into the investment property market for some time, in order to generate some additional residual income. We were both tired of the poor returns in traditional savings accounts, but also had to structure our activities in a tax efficient way, being well paid in our employed jobs; read about how using a Ltd company can help improve your taxation in our helpful guides section.

Small Thorn Place offered a great starting point for Apex Investments, the property itself was a ground floor 1 bedroom flat in a purpose built block. It was leasehold as to be expected and had a buildings management company in place. As a starting point it was low risk for us, structurally the building is taken care of, and if we could purchase at the right price we could make the numbers work comfortably in what was a turbulent market at the time.

The flat was being sold by a retiring landlord, who was based in another part of the country, and by all accounts hadn’t laid eyes on the property for many many years. The property was listed for £67,500 and had an interesting inclusion in the management fee. Heating  was provided by a communal system and as such the residents didn't have to pay separately for gas, as was Electric & Water. With a winter of dread upon us with the energy crisis looming we saw this as a fantastic unique selling point for any potential tenant and a great way for us to differentiate this property from a competitive market.

Upon viewing the property the condition was actually quite good, The carpets were in good order if not a little dirty, the kitchen was under 10 years old and not dated in the slightest, and the bathroom; whilst it wasnt designer, was functional, clean and up to modern standards. All that was required was a fresh coat of paint, replacement flooring in the kitchen, and the removal of an oddly placed kitchen cupboard in order to make way for a fridge freezer. 

We had an offer accepted on the property later that week at £62,000, 8% below asking price and far below recently sold flats in the same building, we felt like we were onto a winner. We elected to mortgage this property with the Mortgage Works as not only were their rates particularly strong, they have a fantastic feature called Further Advance, which means once renovation works are carried out and additional equity is forced, you can add to your existing mortgage agreement without the costly expenditures of a traditional remortgage. 

During the Conveyancing process a couple of items were brought to our attention that were not made apparent during the initial sale process, the key example being the listing advised that all utilities were included in the management fee, however this was not the case as Electricity was the responsibility of the occupier. Whilst this new information was not sufficient for us to pull out of the purchase, nor did it change anything on our commercial forecast, we took the opportunity to renegotiate the purchase price in light of the mis-representation in the original advertisement. Our revised offer was £58,500 ( full £9,000/13% below asking), and as we were a long way down the line and the property had been unoccupied for a considerable length of time, therefore becoming a burden on the current landlord, it was quickly accepted and we proceeded with the sale.

Shortly afterwards we were presented with the keys to our very first property investment, it was a fantastic moment for us both as we had taken the first big step into the world of generating additional passive income.

We then spent just 4 days cleaning, decorating, and generally tidying up the flat. There was endless amounts of caulking & filler required to tidy up the walls, skirting boards, window frames and doors. The bathroom required a full silicon re-seal and we replaced the lighting to comply with waterproofing standards. We also removed the awkward cupboard in the kitchen and replaced the ripped vinyl floor with new laminate to give that fresh look. The carpets were professionally cleaned which removed years of their appearance and we were finished!