Demand for £50,000 non-qualified bedsits and studios with 8% yield leads to Mevanna releasing extra property
A new venture offering Islanders property from as little as £50,000 has been so successful that more units are going to be released shortly.
Mevanna’s non-qualified buy-to-let studios and bedsits went on sale three months ago, and are selling so well that a second block of units in St Helier is now being prepared. Details are available at their website, www.mevanna.com .
James Stratford, Mevanna’s chairman, says that they are being bought as alternative investments by people attracted to the 8% yield.
‘In the three months since we launched, we have had a significant response from people who have £50,000 or £100,000 sitting in the bank where it’s making very little return,’ Mr Stratford said. ‘Investors have recognized that buying an apartment will get them a better yield.
‘Most clients assumed that buying a property would be out of their reach but this product has opened the property market to them. Also, with Mevanna looking after all the day-to-day dealings with the property and tenants, it’s a hassle-free investment. It’s like having money in the bank, but you have bricks and mortar as your security and you get a decent return.’
The non-qualified studios and bedsits are for sale – Mevanna is not offering an option to buy into a property fund. They are fully managed by Mevanna and provide a rental return of 8% gross yield. The net yield (after management fees, water, electricity, sinking fund and insurance have all been paid) is 6.14%. There is also an exit strategy in place should this be required.
The new units will be completed shortly and will operate under the same system as the completed ones, with high demand in the rental sector and great returns.
Mr Statford said: ‘When we launched, we knew that there was a lot of demand in this sector. While the value of middle- and top-end properties is certainly falling, the lower end of the market is both profitable and buoyant.’
There are tenants in each of the units, guaranteeing a return from the outset for investors. However, any investor who wants to buy their bedsit or studio for their son or daughter to live in can do so.
‘As the management company, we ensure that there are tenants and will look after them, as well as ensuring that the owner gets a great return.’ Mr Stratford said. ‘Each unit will be newly refurbished to the same high standard as the existing ones, so the potential future value is going to be just as good. I am confident that these units will be as popular as the first.’
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