Is the TLC needed for this Penicuik house worth the effort?

The weekend is almost upon us so I thought I would leave you with a property in Penicuik to have a think about over the weekend – it needs a bit of TLC but it may be worth it depending on the price.

The property is an end terrace, 2 bed house at 130 Windsor Drive in Penicuik.  Windsor Drive is off Eastfield Drive behind Tesco.

Outside the property looks in reasonable condition but is needs to be refurbished. 

Firstly to the accommodation.  There is a fairly large lounge/dining room, an ‘unfitted’ kitchen , two decent sized double bedrooms and an ‘aged’ bathroom which has a bath but not a shower over it.  There is gas central heating and double glazing.  There is a driveway to the side (but more of that later) and there are gardens at the front and rear.

Double click for more details of this property

Now to the TLC.  The property needs to be refurbished.  Given the condition of the property and the seller solicitor, I suspect that an older person has been living in the property until recently.  As a minimum, the property needs a new fitted kitchen, a modern bathroom with a shower over the bath, re-decoration throughout and it needs re-carpeted.

I mentioned the driveway earlier.  From the pictures of the driveway, it looks like it is a share driveway with the house next door but there appears to be a temporary fence diagonally across the driveway which looks a bit odd.  It would worth checking that there is not a dispute involving the driveway.

Doing the maths. The property is on the market with Campbell Smith for offers over £89,000.  A couple of properties nearby sold for between £92-95,000 around the turn of 2015 and the market has picked up since then so I would be expecting that the sellers would be wanting £95,000 for this property.  The refurbishment costs would need to be estimated in detail but let’s say they are £10,000 which would mean the total cost would be £105,000.  Rent of £600-625 pcm should be achievable on a property like this in the current market; the tenants are more likely to be housing benefit ones.  This gets you to a 6.8-7.2% yield.  A yield of 6.8-7.2% is generally not that good for a property in this part of town which would suggest that the price may not be properly taking into account the refurbishment costs – a price of £90,000 would get you to a yield of 7.2-7.5%. 

Therefore, if you are up for I project, I would recommend that you view the property, get a better idea of how much it would cost to refurbish and then work out what s sensible price for the house it.  I would be happy to advise on this.

We hope you find our posts useful.  If you would like some advice with your potential investment, please come and see us in our offices (6 Bank Street, Penicuik), call us (01968 674601) or email either of us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk; linda.cullen@thekeyplace.co.uk).