Following a recent conversation with a local landlord who was struggling to find a property in Watford with a great yield I asked another local landlord if they’d mind if I shared their recent success story and how they got a great yield in Watford.
Although these landlords were happy for me to share their figures they were keen for me to keep their identity to myself and not reveal the address of their property. So for the sake of this article I’ll just call them John and Jim. The property in question is in West Watford very near the horrible road works that are currently clogging up the whole towns traffic system!
John and Jim bought a ground floor 1 bed flat 2 years ago with a view to converting it. After going a few rounds with the local planning department (which took quite some time) they finally got approval to wrap the flat with an extension to create an additional, front porch, large family bathroom and two more bedrooms. As well as extending the flat they completely refurbished it, using quality fixtures and fittings throughout with the final product being a top-end 3 bedroom, 2 bathroom (1 en-suite) flat with a garden and 2 parking spaces.
Can you get a great yield in Watford?
There’s nothing too unusual about putting on an extension to add value but these guys have done a great job. They picked up the flat for just over £140,000. They spent £84,000 on the extension and the refurb then an additional £3,300 on architects fees and applications for planning. They had to go through 3 rounds!
So in total they spent £227,300.
Due to the high-spec finish they are now achieving £1,325 per month in rent from their tenants which is a tremendous 6.99% yield! And here’s the kicker…..
The property is now worth £275,000 so they’ve managed to build themselves almost £50k of equity into their project too!
Now John and Jim know what they’re doing when it comes to property. They’ve been doing it for a while and know how to spot a good opportunity. They have also enjoyed a period of strong growth in Watford whilst they’ve owned the property.
I’m not suggesting that everyone can go out and spot a deal like this, turn it around and get the same result that they have but it’s clear from this it’s possible to create yourself a great yielding property whilst buying in what is currently considered an area of great potential capital growth.
As always if you want to talk property then give me a call. I can’t promise I can help you find the sort of deal that you’ve seen above but I’m always happy to offer a second opinion on whatever you’re trying to achieve and you’d like my local knowledge then it’s completely free.