Short Lease: Good Investment or Bad Investment?

Came across this Short Lease listing today (below). Is it a worth while investment? £100k guide price.

The Short Lease listing

LEASEHOLD MAISONETTE VACANT POSSESSION
By Order of the London Borough of Enfield
Situated in a popular residential area, close to Trent Park and local shopping/ travelling facilities including Oakwood Underground Station (Picadilly Line).

A Self-Contained Purpose Built First Floor Maisonette with accommodation comprising:
Living Room
Bedroom (One)
Bedroom (Two)
Kitchen
Bathroom/WC
Leasehold for a term of 99 years from 25th December 1959 at a ground rent of £15 per annum.
Entire Vacant Possession upon completion

Short Lease

Short Lease, no problem

 

The maths

Its no secret that with only 46 years on lease most normal lenders will not lend.
So cash invest it.
£100,000 invested (if can buy for guide)
Rent: £13200 (based on asking rental for same flat few doors down)

46 years means over £600k income
Take out your £100k with saving account interest over first 8 years

Leaves £500k, yes half a million for not doing anything

The twist 

Call PropVestment and we will show you how to pull out your full £100k in 6 months and keep the property forever. Free lifetime Income

RESULTS – Short Lease
After publishing this article, one of our most read articles of all time, the property ended up fetching £187,000 in the auction and the buyer could extend the short lease to a whole 125 years for another £36,000.
Overall this ended up being a high price to pay for an property of this type however the buyer saw the future scope and realised that short lease should not stop you picking up a good property.

 

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