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Divide and Profit – Multiple units from poor performers…
This project was undertaken for a longstanding client, owner of a large period building divided into rented flats in South London.
The lower ground floor of the property, configured as a two bedroom flat with separate (small) kitchen and a number of built in storage areas had, over time, declined into a rather poor state of repair and had begun to suffer from damp ingress throughout. The property was very dark and utility services (including electricity and water) supplying the whole building, ran through the flat and required upgrading.
Whilst the remaining flats in the building were tenanted and quickly let at between £650 (studio) and £1,200 (2 bed) the property was proving difficult to let at around £750 per month and required at least £3,000 to £5,000 in upgrading works before being marketed for letting in its current configuration.
After some detailed analysis and discussions with the client, it was agreed that a conversion into two separate studio apartments would best maximise the rental (or possible sale) revenue. After some pre-application discussions with the local authority, planning consent was granted and the project progressed quickly, with a number of communal works being added into the programme, which included:
- Structural changes to re-configure existing flat in two separate studio apartments (front & rear);
- Full ‘tanking’ of external walls to remove growing damp problem;
- Excavations to rear to create new ‘patio’ opening, terrace for flat above;
- Construction of retaining walls and installation of ironwork (steps and railings);
- Provision of new communal utility supply (Water & Electricity);
- Installation of new kitchens & bathrooms;
- Complete rewiring and installation of new heating systems;
- Upgrading of Eco and Environmental properties to meet current legislation;
- Complete decoration & installation of new flooring;
- Completion works and final ‘Sign off’ by Building Control officials;
- Registration as separate properties with local authority;
Marketing of the properties began approximately 2 weeks prior to completion, with the first tenant actually awaiting departure of the contractors on the final day of the works. The second property was occupied two days later. Combined rents (asking prices achieved) totalled approximately £1,600 per month, approximately twice the rental amount achieved pre-works for the original unit, and have increased year on year since above inflation.
Being a client property, you will understand that we cannot publish the financial summary associated with this particular project. However, given that we have retained the client and have since designed and completed a further reconfiguration & refurbishment project, we believe this itself is testimony to the services provided.
Whilst in many ways very different to the re-sale and profit driven projects in which are more commonly involved, we have included this example to show how, in maximising the full potential of a property, it is important to consider more that a simple refurbishment. Instead, always be sure to take into account both the demands of the local market and the potential better use of the property available to you.
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