This was an office block in a great growth area. Our offer was subject to gaining Permitted Development (PD) prior to completion. That would allow us to create four residential flats, which Fi was going to hold herself as we were confident they would give us great returns over time. However, we made the mistake of only getting one builder to assess the cost of the work before we exchanged on the property. When we subsequently asked three builders for quotes, it became clear the costs were going to be significantly higher than anticipated, so we decided to secure PD then sell the property, in order to release both our and our investors’ capital.
We then had another hiccup because we had been unaware that if a property is in an area of Special Scientific Interest or similar, that can affect the granting of PD. In this case, the block was in a conservation area that was subject to SANG AND SAMM rules. That resulted in us having to negotiate a section 106 agreement in the order of a £7,000 contribution and an additional £2,500 in legal costs! However, we managed to secure PD fairly quickly and, because there was great interest in office blocks and Wokingham was a solid investment market, we decided to go to auction.
We received eight pre-auction offers and eventually sold for £565,000, which was significantly higher than we had expected. And because we only owned the property for two weeks, our £65,000 profit translates to a truly excellent annual ROI figure of 164%! An unusual but excellent experience, from which we learned a lot.