The proposed rental values of £475 and £500pcm look realistic, assuming the apartments and building are in a good condition
Before you get too excited I'd advise caution as I know the development well, having found tenants for the developer as the development was nearing completion around 5 years ago
As was the case with many such developments the developer ran into difficulties leading to the building being unfinished for months (having got to 90% completion), essential services were delayed and the the finishing touches that are so important for this sort of development were overlooked and remedial snagging was never carried out
All this means the development was a bit rougher than I'm sure was anybody's intention at the start and as was often the case, with a distinct lack of potential buyers the decision was taken to rent the apartments
Following this, in an attempt to fill it, a local agent struck a deal with Sunderland College to house International Students in half the building (the building is split in 2 with 2 access points), which I know for a fact did not go down well with the professional tenants already living there...
The deal with the College has now ended but the damage has been done (literally) as I understand the apartments and communal areas were not well looked after in the time the students were there
If it was just the apartments that were looking tired then a lick of paint and new flooring would probably sort it but it's the communal areas that would concern me, as assuming you'd be looking to secure a professional tenant they are going to have expectations about the standard of these (and in our experience with this sort of a development, if the Block Managers are struggling to build up a decent sinking fund then upkeep of the building suffers)
Further to this I've often written about the oversupply of flats and apartments in the SR2 area and the impact that this has had - a double whammy of a dampening sale prices and rents and at the same time raising tenant expectations (as they know that with lots of competition about they don't have to settle for second best)
Click here for details
http://www.zoopla.co.uk/for-sale/details/36835268
http://www.zoopla.co.uk/for-sale/details/36835269
I'd certainly not suggest these 2 apartments are rejected out of hand (as the figures do merit further investigation) but given I haven't been in the building for a couple of years I would strongly advise that anyone considering it must view it in person prior to bidding and I'd strongly advise anyone serious gives me a call so we can have a more detailed chat about the pro's and con's
Feel free to give me a call on 0191 567 8577 or email neil.whitfield@belvoirlettings.com to discuss this or any aspect of property investment in Sunderland
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