Commercial premises with flat above, Southsea, Portsmouth
Splitting this property up and creating a lease on the flat allowed us to leave £0 of our initial investment in this deal
Purchase Price
£124,000
Refurb & Costs
£14,800
Revaluation
£220,000
Bought outright with investor cash
Splitting title and creating lease on the flat
The title of the property incorporated the freehold, commercial and flat. We could see that there was money to be made if we were to rent both aspects but there would be even more profit available to us if we were to create a leasehold on the flat. By doing this the flat and the shop could then be valued separately at market value.
The property is in a prime location within Southsea and with plenty of shops and restaurants already thriving we thought it wouldn’t be difficult to attract a business for the shop and tenants for the flat above.
The property was purchased at £124,000. As the seller wanted to move quickly the property was bought outright using investor finance.
Once the commercial shop and the flat were tenanted we then started looking at creating the leasehold for the flat so that we could refinance both parts of the property and maximise our return. We sought advice from our accountants for tax purposes and appointed a solicitor who specialises in splitting titles and commercial legals. The process to create the lease on the flat was quite drawn out.
The commercial premises, now tenanted, was valued at £90k and the flat, now as a separate entity was valued at £130k.
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