In 2018, we uncovered an opportunity in Salford – right on the border of Manchester city centre. Manchester’s property market had just started to boom, so we were keen to get our clients into Salford because the right type of property there was perfectly primed to benefit from the “ripple effect”.
Through our partnerships with developers, we managed to secure some off-plan units in a high-end new development. We also made sure the units we secured were in the best block: the only one directly overlooking the river and the city.
Asking prices ranged from £180,000 all the way up to £290,000 – and we secured an exclusive 10% discount on all of them. That meant that at the top end, our clients saved a massive £29,000!
To pick a typical apartment in that range, a two-bedroom two-bathroom apartment with a balcony overlooking the river should have cost £256,000. Our clients picked these up for £234,000 – and looking on Rightmove a year later, the cheapest we could find on the market was £260,000.
Similar apartments are currently renting for at least £1,100 per month. So even being very conservative on the rental figures and assuming a not-very-competitive 3.5% mortgage, buyers are still enjoying a 5% ROI after all costs.
So: a nice steady income, and currently £26,000 in profit as a result of our discount – not a bad result! And it’s only going to get better, as prices in Manchester continue to grow faster than almost anywhere else in the country.
Better yet, the vast majority of our clients have achieved these returns without ever visiting the property – or even the area. They didn’t have to take time off work to view tens of properties, or put in countless unsuccessful offers before they finally had one accepted. We did all the hard work for them – and helped with everything from arranging mortgages to fitting blinds.
If you know anything about York, you know that any location within the city walls is highly prestigious – and new construction there is extremely rare.
So we couldn’t believe our luck in 2017 when we managed to secure a small number of units from a major national developer in a fantastic central location. It perfectly met our investment criteria of being prime, centrally located stock – giving it the best possible chance of capital growth.
As part of our model we also like to get a discount to give clients built-in equity from day one – and on this occasion we managed to get a 10% discount, saving our clients up to £22,000 on the most expensive units.
Of the range of units we secured, a typical one-bedroom apartment was valued at £157,920 and available to our clients for £142,128. Now, identical units are being sold on Rightmove for anything from £179,000 all the way up to £196,000.
Even on the low end, that means our clients are £34,000 up after just a couple of years!
We projected rents of £795, and the cheapest apartment currently available in the development is priced at £800. So after all costs, and assuming a mortgage rate of 4%, our clients are making an impressive rental ROI of 6.5% on top of the big capital growth they’ve already benefited from.
If you'd like to find out more about our deals, drop your details below and we'll be in touch.
Property Hub Invest Ltd is a company registered in England and Wales with company number 07495608
Lower Ground Floor, 1 Naoroji Street, London, WC1X 0GB