I can recoup capital cost in 3 years on 23 year lease purchase?
I am considering buying a property that has 23 years left on the lease. The capital cost would be recouped in about 3 years from the rent it would achieve.
It seems a bit of a no-brainer, but I’m wondering if there are things I’m unaware of in this situation that could come back to bite me. I assume I won’t be able to extend the lease unless the freeholder agrees a price with me, but I’m not really too interested in extending the lease anyway. I’m looking at this for income.
Is there any advice anyone can give for this situation please. I hope I’m not missing an obvious problem.
Thanks in advance,
Jim
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Comments: 28
10:44 AM, 22nd February 2016, About 10 years ago
Good luck at the auction. Given the numbers you quoted even at close to double price of say 55k it would still yield close to a 20% return….a value many leveraged investors look for on their deposits so it would still be worth bidding for….Although I would not be surprised if others spot the bargain too. Let us know how you get on.