Disused Pub Conversion - East Midlands

We were presented with the opportunity to convert a disused pub to eight x 1-bed apartments.

With an original asking price was £240K, we managed to get this down to £215K due to a cash purchase and our Solicitor being able to complete it within six weeks.

We asked three of our builders to quote the conversion work and took this to our client, jointly deciding to appoint one of the builders to complete the job. With an estimated build cost of £250k with a 15% contingency, the build-out was financed by a short term loan arrangement with one of our financiers at a very competitive rate.

The property's build-out was successfully completed in under nine months from start to finish.

It now privately rents for £48,520 per annum with all flats tenanted. We have recently been approached by a social care project who want to take all 8 flats on a 5-year contract for a fixed rental value of £43,680. Our client is considering this because he likes the certainty and reliability of guaranteed monthly income over five years. The lease is also fully repairing, with the Social Care scheme fully responsible for all repairs and maintenance during the 5-year lease.

The annual return on investment (ROI) is 9.64% per annum with all costs, including our fees.

This block of 8 apartments was recently valued at £650,000.