We have a relatively small rental department, which has been born off the back of our sourcing business; we manage several properties in central London, and a few outside.
One particular property in Wembley had been let out directly by the landlord, for several years, to a family, who in turn had sublet the property out to several more occupants, effectively turning the property into an HMO.
We were asked to get involved at this point in the cycle.
Generally, after this type of occupation, once the property is returned it requires a considerable amount of work in order for it to be rented again.
So, we started the process of getting quotes, with the intention to start works as soon as possible.
The landlord was aggrieved at the state of his property, and was reluctant to put more money into the property, especially as his cash flow didn’t allow for it; and every day the property was empty, he was losing further money.
Looking at the property I personally did not think there was any hope this property could be rented without any works done to it at all. This was my assumption. We tested my assumption by placing the property on the market. Within 48 hours I had two offers for the property, one for £1,700 and another for £2,000. A short while later the offer for £1,700 was backed by a two month deposit, with cleared funds in the account.
I was actually extremely surprised, and glad to be wrong. Of course, references will be taken, prior to the signing of the tenancy agreement.
At the moment, we are in the process of carrying out due diligence on a Pub, in Shepherd’s Bush, which we have sourced recently on behalf a client. A part of this process is looking at whether we should destroy the building, or look at keeping it and renting it; whilst we go for planning. Destruction has many benefits, firstly, it cannot be occupied by squatters and people cannot steal lead from the roof etc. The insurance premium is minimal when there is no building to protect.
In considering the rental ability of the asset we first had to look at its usage. The top part of the property had been registered as a 52 room hostel. This would rent at £15 per night per bed. Again, this was a revelation for me; I did not realise you could sleep anywhere in Shepherd's Bush for this kind of money.
When you multiply the two figures, the daily rental income comes to £780 per night, which equals a whopping £284,700 per annum. This is a yield of over 16% on the purchase price.
This is not the end game, however, as the plan is to get a scheme of 18 units on the site, with a view to sell on, or not, depending on what’s going on internally, and the market situation.
We are still in the process of understanding how logistically this will operate. If it is implementable, we will be very relaxed in regards to the timing of when the planning will come through. We can also afford to push harder on aspects like the S106 agreement, which is the deal you make with the council in regards to how much social housing the site would have.
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Agony Agent Is Here To Help!
Q: How do I go about renting out my parking space?
A: Renting out your parking space can be a great way of earning a bit of extra income. If parking is difficult where you live, you could end up earning around £100 a month – and could even reach as much as £250 per month in the certain areas.
You can rent out your parking space as long as it is owned by you, and not by a landlord or third party. Remember that it doesn’t have to be a driveway, renting out a parking space in the underground parking of a block of flats is also very popular. If you rent out one parking space on your driveway, you can, of course, still use the other. You could also rent out the parking space for a set amount of time (e.g. office hours), so you can use it at other times.
The income you will earn will depend on where you live and how much people are prepared to pay. London is always popular and most desirable in terms of rent. If your parking space is covered and secure, people with more expensive cars, or with vans full of expensive equipment, will find it more desirable and possibly pay a little more. If your area has parking permits, which are usually for residents, then businesses may also be keen to get their hands on your parking space as permits may be scarce (although you will need to check the terms and conditions of your parking permit use).
Where can I advertise my parking space?
There are various websites where you can advertise your parking space.
These include:
l www.yourparkingspace.co.uk
l www.parkatmyhouse.co.uk
l www.parklet.co.uk
These websites will give you a good estimate of how much your parking space is worth, based on your postcode, and they will put you in touch with potential customers. You can then meet the potential customer and come to an agreement. If this sounds too much like hard work, then we would be more than happy to handle this process for you. Do remember, that the income you receive is taxable.
Are there any disadvantages to renting out a parking space?
There are always pros and cons to this, however, with a short-term rental like this, you can easily change your mind with short notice and have your parking space back.
If you rent out a parking space, you obviously must make sure that the space is available when the parking space ‘tenant’ needs it, and that no-one is in the space at that time. To do this you may have to put up notices informing drivers that unauthorised vehicles will be removed, or you may need to put up a parking post.
Do get in touch if you would like any assistance.
Richard Bond
Lettings Manager
