Project
Argyle Street, Reading, RG1, UK
![Argyle Street, Reading, RG1, UK-page banner](https://www.titanium-synergy.com/wp-content/uploads/2023/03/Argyle-Street-Reading-RG1-UK-page-banner.jpg)
- Sale agreed in Dec 2021. Chain of 4
- GBP440k. Internal area 1561 sq ft.
- Applied for 75% LTV mortgage. 0.75 X 440k = 330k
- Completed Jul 2022.
- Purchase price: 440k
- Tax: + 23k
- Legals, Surveys +4k
- Light touch up +8k
- Mortgage -330k
- Capital invested 145k
Stage 1: Rent out as it is for first year.
- Rented out at 1750 per month. X 12 = 21k pa
- Lettings fee = 2,100
- Net income = 21k – 2.1k = 18,900
- Mortgage interest 4.5% = 0.045 X 330k = 14,850.
- Net profit = 4,050
- Return on investment = 4,050 / 145k = 2.79%
- Expected capital gains = 5% X 440k = 22k pa.
- Return on invested capital (rental + capital gains) = (22k + 4,050) / 145k = 17.97%
![RG1 Reading, UK_1](https://www.titanium-synergy.com/wp-content/uploads/2022/08/RG1-Reading-UK_1.jpg)
Stage 2: Apply planning permission to split into 3 flats. Ground floor 3 beds 2 baths (valuation GBP290k). First floor 2 beds 2 baths (220k). Second floor 1 bed 1 bath (160k). After year 1.
- Total Gross Development Value = 670k.
- Additional refurb cost = 150k.
- Total Gross Dev Cost = 475k + 150k = 625k
Remortgage at 670k = 75% X 670k = 502.5k.
- Money left in after split = 625k – 502.5k = 122.5k.
- Rental for 1 bed 1 bath = 800 pm
- Rental for 2 beds 2 baths = 1150 pm
- Rental for 3 beds 2 baths = 1900 pm
- Total rent = 3850 pm X 12 = 46,200 pa.
- Lettings fee 12% = 5,544
- Net profit = 40,656.
Mortgage at 5% = 0.05 X 502.5k = 25,125 pa.
- Net profit after mortgage = 15,531 pa
- Return on investment = 15,531 / 122.5k = 12.68%.
- 5% capital appreciation = 0.05 X 670k = 33.5k
- Return on invested capital = (33,500 + 15,531) / 122.5k = 40%.
![RG1 Reading_layout](https://www.titanium-synergy.com/wp-content/uploads/2022/08/RG1-Reading_layout.png)