This large 1 bed unit has just come on the market at
£130,000. It is located on the 1st floor, has allocated parking and extends to
just under 450sq.ft. It is in need of redecoration and some updating but it
will prove popular with tenants given its location close to Portswood (Waitrose
is a 5 min walk), Southampton Common, The University and the City Centre. Your
tenant pool will be varied and will include: professionals, post grads, medical
staff and uni lectures who favour this location. Properly presented the unit
will achieve £650 to £675pcm, which even after allowing for some refurb work
will return 6%. The property last sold at the height of the market in December
2007 at £138k, so relatively speaking not bad value. And the all-important EPC
rating is fine at C. This could be a nice tidy little buy2 let
... or a parent of a university student, by the using a Trust, with the student being the named beneficiary. By naming the student as the beneficiary it triggers their own principal private residence relief when they move into the property, and when the parents come to sell the property as trustees later, you can claim the relief for the whole period of ownership, meaning that there will be no capital gains tax liability on the sale, as long as the property has been occupied by the named beneficiary at all times. If the student moves out, you still have 18 months to sell before the capital gains tax liability would start to accrue.
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