I spotted this property, Pierhead Lock in June 2012 and loved it. Just 600m from Canary Wharf, 400m from the nearest tube station. It has a river view and is nice and quiet.
The biggest factor is that I noticed nice luxury apartments that Asians love to buy, with river views, were going for 340 - 360k. I thought that the gap could not be so big. So I used the idea of "BUY THE CHEAPEST HOUSE ON THE BEST NEIGHBORHOOD" theory to work. Lots of London friends told me that East London was a bad area but hey, in periods of shortages, anything with river views and near work places should rise! That's my theory any way!
I bought it at 272,500, with the settlement on 18 Jan 2013. It is now valued at 337,964. The total return achieved is 24%. Annualised return is 18% and this excludes leverage. With leverage of 80% LTV, I have achieved over 100% IRR. During the same period, London properties rose by around 13% unlevered so I've achieved an Alpha of 5%.
The downsides to this property: service charge is very high. GBP3500 because of the usual GBP1500 - 2000 because there was a dispute about water ingress and high insurance claims in the past but these problems are being resolved. Another downside is that it's 530 sf and only 1 bedroom, but it has a 200 sf balcony overlooking River Thames . The ideal would be to buy a 2 bedroom property to allow two sharers.
Yield wise, we achieved 5.2% gross initially, and net 3.4%. That was because the rental was not well planned and w got 10% below market rate. Right now we are achieving 5.7% gross yield on cost price, 3.9% net.
Also, you need to buy when there are periods of shortages and when the economy is on the up. Brisbane, Darwin, London (affordability issues though), New York, Dublin and most US cities are in this category.
Property details for Flat XX, 416 Manchester Road, London E14 3FD
Historic details available for this property Flat, Leasehold , 1 Beds, 1 Baths, 1 Receps
Value data/graphs
Public info
Property type: Flat | Tenure: Leasehold | Last sale: £272,500 | Sale date: 18th Jan 2013 -
Property type: Flat | Tenure: Leasehold | Previous sale: £222,000 | Sale date: 24th Mar 2006
Property type: Flat | Tenure: Leasehold | Previous sale: £139,995 | Sale date: 23rd Apr 1999 New build
Property type: Flat | Tenure: Leasehold | Previous sale: £139,995 | Sale date: 23rd Apr 1999 New build
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| Breath taking view of the River Thames from the living room. Guaranteed to be unblocked. |
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| Brilliant view from the balcony. You can have a glass of wine, read a book on the deck table and chair on a spring / autumn / summer |
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| 450m from South Quay DLR. 1km from Canary Wharf. Future Cross Rail around 1.3 km away. 3 DLR stops away from future Cross Rail station in Canary Wharf. |
