Axxco Social Housing Investment Case Study - North West

The following case study showcases our latest north west completion. With an astute investment of £156,390, our investor is set to yield a robust annual rent of £17,680. This translates to an impressive net return of 11.3%.

Axxco's Social Housing Investment Process

• Property Sourcing: In this case study, our initial step was sourcing a suitable property on the open market, selecting a unit that showed promising potential for conversion into social housing. The property was rigorously assessed to ensure it met our strict criteria for investment and suitability for social housing needs.
• Collaboration with Housing Providers: After the property purchase, we closely collaborated with our partner housing providers to tailor the unit specifically for social housing use. This collaboration was key to maximising the property's value and appeal, ensuring it met the unique requirements of social housing tenants.
• Engaging Investors: With the property acquired and a clear plan for its transformation, we presented a comprehensive investment package to potential investors. This package detailed the property's potential, along with our strategic plan for its refurbishment and adaptation for social housing.
• Post-Purchase Support: Upon successful sale of the unit to an investor, we managed the entire refurbishment process,transforming the property to the high standard required by the social housing provider. Our involvement ensured that the investor began receiving rental income as swiftly as possible, marking the start of their investment returns.

Investment Financial Overview

The investment in this social housing project was carefully structured to optimise returns while adhering to quality standards. Here's a breakdown of the financials:

• Property Acquisition: £115,000
• The property was strategically chosen, aligning with our stringent Social Housing investment criteria.
• Refurbishment Investment: £41,390
• This amount was judiciously allocated to crucial refurbishments, enhancing property value and ensuring compliance with social housing standards.
• Total Investment: £156,390
• The combined investment reflects a balanced approach between upfront costs and anticipated long-term profitability.
• Annual Rent: £17,680
• Prior to the property purchase, we agreed the annual rent of £17,680 with the housing provider.
• Net Return: 11.3%
• This return rate highlights the project's financial viability and aligns with Axxco's commitment to profitable and sustainable investment opportunities.

Social Housing Refurbishment Works

‍We oversaw £41,390 in comprehensive renovation works to this property, transforming the property into a modern, safe, and energy-efficient living space. Key improvements included structural reinforcements for long-term asset value, state-of-the-art safety features, and an aesthetic overhaul of interiors, making it an attractive proposition for tenants and ensuring it's met the rigid standards for the Social Housing Association lease.

Clients are also provided with the following on completion and we also forward to the social housing provider on the clients behalf:

• Copy of the installation and test certificate for the electrical installation
• Copy of the installation and test certificate for the emergency lighting
• Copy of the installation and test certificate for the mains wired interlinked smoke alarms.
• Gas Safety Certificate
• Gas Boiler Benchmark

Overview of Refurbishment

Clearance and Initial Preparation

• Full rubbish removal at the beginning, during, and at the end of the project.
• Includes the removal of carpets, kitchen components, and skip hire.

Entrance Area

• Stripping walls to brick up to a meter in height, followed by tanking, slurry application, hardwall, and skimming.
• Overboarding and skimming of the ceiling.

Bedrooms

• Similar treatment to walls as the entrance area, including removal of fireplaces and making good.
• Installation of fire doors complete with frames, locks, auto closers, and handles.
• Ceiling overboarding and skimming.
• Specific enhancements in individual bedrooms like radiator valve replacements and window sill replacements.

Lounge

• Comprehensive wall treatment including fireproofing under the staircase.
• Replacement of wooden windows with UPVC double-glazed ones.
• Installation of fire doors and boxing in new boiler pipes.

Kitchen

• Complete replacement of kitchen units including worktops, sinks, taps, and waste connections.
• Fire door installation and window replacement similar to the lounge.
• Modifications to radiator pipes.

Bathroom

• Installation of a fire door and privacy locks.
• Radiator valve replacement.

Stairs and Landing

• Overboarding and skimming of walls.
• Handrail installation and banister modifications.
• Fireproofing in specific areas.

Additional Rooms and Corridors

• Varied plasterwork, construction of new walls, and modifications to existing structures.
• Installation of new toilet facilities including necessary plumbing work.
• Installation of privacy enhancements like patterned safety film on glass.

Loft Space

• Structural modifications including fireproofing and insulation.
• Replacement of Velux windows and installation of new radiators.

Exterior and Yard Work

• General tidying, repointing, and painting of external walls.
• Removal of unsafe structures and replacement of gates.
• Tree trimming and garden maintenance.

Essential Services

• Replacement and relocation of the boiler, including gas safety certification.
• Complete flooring throughout the building.
• Electrical upgrades including a new consumer unit and smoke alarm system.

Furnishings and Decor

• Acquisition and installation of wardrobes, chests, beds, tables, chairs, and sofas.
• Full decoration of bedrooms and installation of window treatments.

Safety and Compliance

• Installation of CO2 alarms, doorbells, fire exit signage, and necessary safety films.
• Compliance-related submissions and surveyor involvement.

Total Project Cost

• The entire project amounted to a significant investment, ensuring that the building was not only refurbished to a high standard but also met all safety and compliance requirements.

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This comprehensive refurbishment project covered a wide range of works, from basic structural changes to detailed interior and exterior enhancements, aimed at significantly upgrading the building's functionality, safety, and aesthetic appeal.

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Refurbishment Week 1

Refurbishment Week 5

The Investment Result

• Complete Ownership: The investor owns the property outright.
• Direct Lease Agreements: The implemented housing association lease is directly between the investor/landlord and housing association with no management company or 3rd party involved.‍
• Robust financials - The investor achieved an 11.3% net yield, with a 7 year fixed term lease.

Included in the social housing lease

1. Blue Chip Tenants: Your investment is secured with a 7-year lease agreement with an FSE 250 company, guaranteeing financial stability and reliability.
2. Maintenance and Repairs: Day-to-day maintenance and repairs are undertaken at no cost to the landlord, ensuring the property remains in optimal condition throughout the lease period.
3. Guaranteed Rent: Enjoy a guaranteed monthly rental income paid via BACS when you hand over the keys, providing a predictable and stable revenue stream.
4. Full HMO Management: Our comprehensive management extends to Houses in Multiple Occupation (HMOs), ensuring compliance and efficient operation.
5. Licenses and Certification: Axxco's team of experts handles the administration of licenses and certifications, streamlining the regulatory process for you.
6. Monthly Property Inspections: Regular property inspections are conducted to maintain high standards and address any issues promptly.
7. Council Tax and Utilities: The lease covers the payment of council tax and utilities, reducing administrative burdens for landlords.
8. No Void Properties: Say goodbye to the challenges of void properties; our lease agreement ensures consistent occupancy.
9. No Management Fees: Enjoy the benefits of our comprehensive management services without additional management, legal, registration, or set-up fees.
10. No Rent Arrears: Our meticulous tenant selection and management processes minimize the risk of rent arrears or debt collection issues.
11. In-House Team: All our properties are managed by in-house Housing and Maintenance Officers, backed by a dedicated team of administrators, ensuring a hands-on and expert approach to property management.

At Axxco, we facilitate a fully packaged, high-yielding, asset-backed investment in social housing. Our role is to connect investors with what we believe is the safest and most impactful type of social housing investment, backed by robust agreements and a commitment to community welfare. Start your investment journey with us today by clicking here.