A PROJECT PRESENTATION

ON

EVALUATION OF BUY-
BUY-TO-
TO-LET INVESTEMENT

BY

UNDER THE SUPERVISION OF

SUBMITTED TO
 BUY--TO
BUY TO--LET INVESTMENT
According to Bø, Erlend Eide. (2019), a Buy-to-let (BTL) investment involves
purchasing property with the intention of letting it out to tenants, aiming to generate
rental income and potentially benefit from property value appreciation.
THE SELECTED PROPERTY
Features and description
 The property is a freehold 3 bedroom
flat, with gas central heating, double glazed
windows, south facing rear garden, good sized
kitchen, a gross internal floor area of 1,165 sq
ft (108 sq m) approximately,. Additionally, it
has a brent Cross shopping complex of
approximately two miles maximum radius
and with a ceramic tiling of the floor and
This was selected on zoopla listed at a price of £750,000. more details
at https://rb.gy/29yk2g
walls. Double glazed window.
WHY IS IT SELECTED AS A BUY-TO-LET PROSPECT?
This property is an excellent Buy-To-Let prospect due to its desirable features and convenient location. As a freehold
property, it offers more control and flexibility for the investor. Energy-efficient gas central heating and double glazed
windows contribute to lower utility bills for tenants. The garage providing off-street parking is a valuable features in urban
areas.Thus, it offer convenient living environment, making it a promising investment opportunity for Buy-To-Let.
THREE PROPERTIES SUPPORTING RENTAL INCOME

£2400 pcm on zoopla, https://rb.gy/kzk7me £2275 pcm on £2150 pcm on

zoopla, https://rb.gy/qp15vd zoopla, https://rb.gy/kzk7me
 FEATURES OF THE LOCALITY SUPPORTING DOLLIS
HILL AVENUE, LONDON NW2 6EU AS A BUY-
BUY-TO-
TO-LET
LOCATION.

 Dollis Hill Avenue, located in London NW2 6EU, stands as a beacon of

opportunity for buy-to-let investors seeking an investment in a prime
location. With a strategic position offering excellent transport
links, proximity to key amenities, and green spaces, Dollis Hill Avenue
presents a compelling case for property investment.
 Furthermore, according to Admin (2023). Plans registered for 301 homes in
Dollis Hill – Constructing London, plans have been registered for the
construction of 301 homes in Dollis Hill, indicating a significant residential
development project that can enhance the area's housing stock and
attractiveness to potential tenants, also adherence to the Community
Infrastructure Levy, underscore its commitment to growth, making it a
promising choice for buy-to-let investors seeking long-term
growth, potential capital appreciation and rental opportunities.
 Additionally, proposals for the residential redevelopment of 370 High Road
& 54-68 Dudden Hill Lane including replacement industrial floorspace, and
flexible commercial floorspace, demonstrating a commitment to enhancing
the area's infrastructure and amenities makes the area a promising one for
a buy-to-let investment (Admin (2023). Plans registered for 301 homes in
Dollis Hill – Constructing London, )
 ENTRY COSTS AND REQUIRED INVESTIBLE
EQUITY
 In reference to the data collected and documented about the price cost and expenses
required for the selected house (shown on slide 2),
 The property's purchase price is £750,000. Considering a Buy-to-let interest mortgage
of 65% and a loan interest rate of 5%, as specified by the building society, this results in a
deposit requirement of £262,500, prior to consideration of other initial expenses such
as Stamp Duty Land Tax (SDLT), solicitor conveyancing fees, surveyor's fees, etc. These
initial costs total £33,695.
 Therefore, the analytical amount of equity required by the investor to meet this is
£296,195, i.e sum of Deposit Required and Total Other Cost .
ENTRY COST AND EQUITY REQUIREMENT
Purchasing Price
Deposit Required

22%

2%
56%
20%
 ANNUAL COSTS AND INCOME ARRIVING
FROM THE LETTING
 Annual income and expenditure was estimated by comparison with similar
property in same area, using the cost of a monthly rent, which by review
saw for the vicinity to be £2,809, and the annual rent income in the vicinity
was estimated to be £30,899 but specifically focused on the eleven times
expected monthly i.e allows a month per year void period when there is
no rent.

 Additionally the annual expenditures includes allowance for bills which will
have to be met during 1 month void, management and letting fees per
annum, annual allowance for maintenance and repairs, building
insurance, mortgage loan repayments on an interest only basis, total
outgoings (sum of the 5 items above) and annual net income (annual rental
income minus total outgoings).

 Cumulatively the annual rent income is estimated to be a sum of £30, 899

with a month per year void and the expenditure is the sum of all the cost
implication of the expenses listed above, on the following page is the
capital growth expected for the selected property.
 CAPITAL GROWTH - EXPECTED VALUE OF THE HOUSE
IN 8 YEARS TIME
Firstly, Capital growth in buy-to-let investment refers to the increase in the value
of a property over time, it is also known as capital appreciation,. Unlike rental
income, which provides immediate returns, capital growth is a long-term
consideration that reflects the potential for significant returns on investment
over time
The expected value or worth of the house in 8 years time was calculated using
the expression:
Expected Value = C.P X (1 + i)n
Where C.P = current price of the property
i = Annual percentage growth rate i.e 5%
and n = number of years, which equals to 8 years
From the collected data, C.P = £ 750,000
n = 8
i = 5%
Therefore, Expected Value = 750000 (1 + 5%)8
= £ 1, 108, 092 (Forecast value of the house in 8
years)
Now, for the Net Balance Remaining, the interest only loan originally
borrowed, CGT and other fees are deducted , this makes the Net Balance
Remaining to be = £ 1108092 - £ 487500 - £ 105176 = £ 515416.
Net Balance Remaining = £ 515, 416.00
 RISK ASSOCIATED WITH A BUY-
BUY-TO
TO--LET
INVESTMENT IN THE SELECTED AREA
While Dollis Hill Avenue appears promising for buy-to-let investment, there are inherent risks to
consider, the risks associated with a buy-to-let investment in Dollis Hill Avenue can be tolerated but
it needs proper management through careful planning and risk mitigation strategies.

The following are the risks attached  Another important risk is unexpected
to a buy-to-let investment at Dollis maintenance costs: proper repairs of
Hill Avenue : property over time and estimating the
maintenance cost as well as ensuring
 Void Periods: The one month per year void thorough property inspection before
provided can lead to income loss as the purchase to identify any potential issues help
property remains unoccupied during the time in mitigating excessive maintenance cost.
and this can be mitigated by offering a
competitive rent, present the property well, and  Changes in local regulations:
utilize reliable letting agencies to find tenants Government regulations or planning
quickly. decisions can affect property values or
restrict rental yields, and by staying informed
 Market Fluctuations: The property market about any planned developments or policy
can fluctuate, and there's no guarantee of changes in the Dollis Hill Avenue area, this
capital appreciation or consistent rental yields. risk can be drastically minimize,
 Interest Rate Changes: Stress testing All the risks associated with a buy-to-
finances using different interest rate scenarios let investment in Dollis Hill Avenue can
to ensure affordability even if rates rise. be tolerated if properly managed
Consider a fixed-rate mortgage for a set period through careful planning, thorough
to provide some stability. Rising interest rates research, and risk mitigation strategies.
can increase your buy-to-let mortgage
repayments, which in turns impact profitability.
 CONCLUSION FOR THE CLIENT
Owing to the initial aim of this project work, that is, to evaluate buy-to-let
investment whether it is till good investment or the bubble has burst.
In reference to the collected and analysed data about the selected 3-bedroom
flat for the client listed at £750,000, located at Dollis Hill Avenue, London NW2
6EU, it can be deduced from the documented data that in 8 years time the
worth of the house will be £1,108,092 that account to a profit (growth in
value) of £358, 092 prior to deduction of associated expenditures, such as
tax, conveyancing SDLT, e.t.c £304,775 is estimated to be realised as Net
growth on deducting the necessary expenditure.
Furthermore, it has a potential of realizing £30,899 as annual rent income on
letting out with an allowance of a month void per year, and all the risks
associated with the investment on the selected property (house) at Dollis Hill
Avenue, London NW2 6EU, can all be tolerated, I will thus conclude that the
client can still go for buy-to-let investment as it has proven to retain its
historical reputation of being rewarding investment, as depicted on the excel
sheet submitted.
THANKS FOR LISTENING