Lease Option Deal Available
/Gower Peninsula Option to Purchase
It is not often we come across opportunities like this. We had a call from a seller in the Gower Peninsula, Swansea, who has been struggling to sell his beautiful, huge, house. The market has been ‘just off’ for the sale in the area at the moment so we opened discussions to a potential “option to purchase” agreement. Here are some figures;
Our figures are only based on a standard rental. This property will make an incredible holiday let and will exceed our cash flow predictions.
- Current Market Value: £320,000
- Agreed purchase price: £305,000
- To be purchased in 5 years (option period)
- Estimated value of purchase in 5 years: £400,000 (this is based on a 5% increase in value each year)
- Option start fee: £15000
- Monthly rental income: £1150
- Monthly option fee: £650
- Management: £103
- MOE: £103
- Cash flow: £294 (total over 5 years - £17,640)
- Potential flip profit in 5 years: Between £60,000 and £70,000 depending on exit strategy (i.e. sandwich the option with the new buyer so no stamp duty and Legal's are paid)
This has been agreed with the vendor. The reason for the option fee of £15,000 is so that the vendor can release some equity, which he very much needs. He understands that us, as the option holder, will be making a considerable profit in the 5 year period. The source fee for this deal is £3997.
