Daily Archives: February 10, 2017


We are Remortgaging some properties including the mixed-use property (see day 7). The surveyor    comes to have a look round and do his valuation for the Bank. The top floor has two flats.

One is a one bed flat with its own entrance. The flat is large for a one bed flat. It has a kitchen, lounge, bathroom and bedroom It also has its own hall way outside and a staircase leading down to the entrance. The entrance is very spacious with room say for some bikes or hall furniture.

The other is an enormous maisonette with a large room many with character features such as original fireplaces. It has 3 bedrooms and a bathroom, kitchen and lounge. In London, this is a space that would-be worth a lot even above a shop.

But the surveyor’s take on these flats is interesting. He is concerned that the flat is too big for the market and will be difficult to let. This is not going to affect his valuation. He is just being friendly and giving his opinion. We like to accompany surveyors around properties which we mortgage because we often do get useful information like this. His suggestion is we should convert the flat into two flats.

He is an experienced surveyor who operates in this area. So, we would be wise to pay attention to his opinion. But in this case, he is actually wrong. The reason is this. We have identified that we can turn this 3-bed flat into a 4-bed flat. This space is so large that is going to be easy to do.

And we know that in this area there is a major shortage of 4 bed properties especially for those with larger families who can claim the 4-bed housing rate. That rate is £136.93 and we have already got a number of interested Tenants. So this flat in a property that cost £120,000 with 2 shops and 1 other flat is going to produce by itself £7,100. In other word 1 unit in this property is producing a gross yield of 6%. Many properties around the Country would be happy if they got a 6% return for the whole property.

The moral of this story is to show how important detailed knowledge of the areas where you invest is to invest successfully. That is knowledge that you only really get if you personally have it and if it is gained by direct experience. It is very difficult to get this knowledge from agents you employ such as letting agents and the like. Here even an experienced surveyor had not realised the real value of this property.