A Jersey property development firm has launched a new venture which enables Islanders to buy-to-rent non-qualified property from £50,000.
Mevanna, a property development firm which has been managing Jersey accommodation for seven years, says the non-qualified studios and bedsits are buy to rent, and are an alternative investment with an 8% yield.
Chairman James Stratford says the venture is targeting islanders who have money to invest and are looking for a better return than their bank.
He said: ‘I think there are a lot of people in Jersey who have £50,000 or £100,000 sitting in the bank where it’s making very little return and they will see their property solely as a way of getting a better yield.
‘I also think that many parents will use this as a way of getting their children a home at a time when they can’t get a mortgage.’
The non-qualified studios and bedsits 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 6.16%. There is also an exit strategy in place should this be required.
Mr Statford said: ‘There is a lot of talk about Jersey’s housing market being depressed at the moment, and the value of middle- and top-end properties is certainly falling, but there is still lots of demand in this sector; 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, Mevanna will 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 a high standard and fully furnished, which is going to increase its potential future value. Purchasers will either have a tenant or, if they are buying for their son or daughter then vacant possession will be offered.’
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