Owning your own home

Works out at £1,200 per month rent for the next 4 years, in a very nice building in a nice part of town.

Not bad.

...if it weren't in need of 'total refurbishment'.

Yeah, but rental prices in the area are on average £2,230 per month for a 1 bed flat.

If you had cash, and you were quick, you could turn £38k profit on a £10k overhead of refurb and a £55k payment... and leave yourself in a bargaining position for the lease.

It's not as daft as you lot are making out.

^This.

But you do need some cash though.

I'll take a £38k profit over 12 weeks or so...

Anyone want to go halves with me?

There are rules about how to extend leases although I suspect the value of this property will already reflect the likely chances of extending:
http://www.findaproperty.com/displaystory.aspx?edid=00&salerent=0&storyid=10207

Dibs

Anyone want to go halves with me?

checks finances

PM to follow later...

Is there one that guarantees that it only invests in arms and other unethical things?

It would probably make more money.

There's a strong correlation between good company ethics and better than average return on investment over the longer-term.

We're buying a place in London this year, will be checking in here regularly from now on...

Us too. Where you looking' Joe?

"Greed, for want of a better word is good..."

I'm going to start slicking my hair back with Brylcreem. Oh, and I need a Porsche head tube badge.

If a lease was originally granted for a term of less than 21 years, then you do not have the right to enfranchise it.

Velocio is correct though, there is good money to be made out of that flat, and others in a similar situation. I have a number of clients who take on short leases as rental investments, in areas like Eaton Sq, as you usually pay off the purchase cost within half the term of the remaining lease, and the rest is all profit - only problem is you need cash to play in the short lease market.

That flat in Egerton Gardens would be worth between 1.8 and 2.1 million on a long lease and good condition

Yeah nice flats those. My ex's sister used to live in an identical looking block in Chelsea. definitely a worthwhile investment if you could be guaranteed of having it occupied for the remainder of the lease. I don't think 1 beds are the easiest properties to let though are they?

Heres an example of one i was involved in.

Eaton Sq, 1 Bed maisonette on ground and lower ground floors, 1100 sq ft aprx.

10 year lease

1.3m Purchase price (would have been over 3m with long lease)

4000 per week rental, so 208k per annum

Over the course of the lease you make 2,080,000

thats 700k profit, not allowing for rising rents

What's the likely reason for that little flat only having four years left? From the website linked above you'd be able to extend the lease (though it might be pricey I guess) unless:

• The majority of the leaseholders have applied to obtain the freehold
  This can't be case, else the guy who's selling would have the freehold and wouldn't be selling (or would have sold earlier / in different circumstances?)

• Your lease has already ended
  Not the case

• You have sublet your home on a lease of at least 21 years
  Don't understand this

• The lease was originally granted for less than 21 years
  This seems a bit unlikely - aren't leases usually for 100 years?

• The freeholder is a charitable housing trust, the National Trust, the Crown (although they may agree), or the property is in a cathedral precinct
  This is possible in this part of town (the Crown bit at least).

• If your freeholder wants to employ a developer to demolish and rebuild the property (in which case you would be entitled to compensation)
  They're not going to demolish that house.

The Lease would have been originally granted for a period of less than 21 years - you will find many properties where this is the case on the Grosvenor Estate - as a rule they will only top up a short lease back to the original 20 year term.

Leases of this duration fall outside enfranchisement laws, meaning leaseholders cannot extend their lease or buy the freehold, allowing Grosvenor to keep control of its property assets.

Aah. So people still buy £1m+ flats, even though they'd never have a lease of more than 20 years. Blimey

Aah. So people still buy £1m+ flats, even though they'd never have a lease of more than 20 years. Blimey

Yeah, that seems odd to me. Not saying it's not true. Just barmy.

People buy £1m+ cars and they're really uncomfortable to sleep in and don't even have showers.

That was all very interesting, but it doesn't solve my problem: where do I stick my meagre deposit? #bloodyhouses

Its not barmy at all - as Velocio has pointed out it can be cheaper than renting, also there are numerous tax reasons why people buy short lease flats - however the vast majority of these flats are sold to old dears, on the last step of the stairway to heaven