McDonnell’s distorted and dangerous version of Right to Buy9:01 AM, 5th September 2019
About 3 weeks ago 35
As an Airline Pilot, Ray Pearce has a fairly unique perspective on the changing trends of UK holiday makers; “Over the last few years I’ve observed an increasing trend for UK families to choose to holiday within the UK rather than flying abroad, so for me, investing in holiday lets is kind of hedging against my day job as a pilot. Also, the right properties can give great cash-flow and offer interesting tax advantages”.
Ray and his wife Diane’s most recent portfolio addition is a fabulous stone built terraced cottage in Tindale Fell, Brompton, Cumbria. The property was marketed by Below Market Value sourcing agent, BMVwarehouse on behalf of vendors who were very keen to secure a quick sale in order to move away. Ray and Diane immediately spotted the holiday let potential of the cottage and were able to buy it through BMVwarehouse at a discount of around 30% off its expected market value in return for giving the vendors certainty of a quick sale and flexibility on completion date.
Whilst the property could have been let as it was with some minor cosmetic work, Ray & Diane decided to carry out a complete refurbishment of the property as soon as they completed on the purchase to turn the cottage into a very welcoming and cosy 3 bed holiday let.
This additional investment has certainly paid off. In just 5 weeks after completing the refurbishment they have already achieved 26% of their target 1st year bookings and have been awarded 5 ticks status by Sykes Cottages and are expecting to be awarded 5 rosettes by Visit England and Visit Britain.
But that’s not the end of the good news on this particular deal, there are three more bonuses.
Firstly, Ray and Diane have been able to refinance 6 months after purchasing the property to extract all of the cash that they had invested in buying and refurbishing the property. Post-refurbishment the cottage was valued at £190,000 and with a 75% LTV mortgage Ray & Diane were able to raise £142,500, so they now have their cash fund back in the bank ready to purchase their next property. This was only possible because the property was purchased at a significant discount in the first place and then value was added through the refurbishment.
The Second bonus is that even after refinancing to get all of their cash back out of the deal, Ray & Diane have still been left with £47,500 of equity in the property.
Thirdly, because the property is now a furnished holiday let it qualifies for Capital Allowances tax relief which will enable Ray to claim a significant income tax saving.
So whichever way you look at it, this is a phenomenal deal!
If you have used the services of BMV Warehouse and would like to leave them a testimonial to appear in the Property118.com Directory please click here
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