Golden Egg-Laying Small Building in Gil-eum New Town! 4.8 Billion KRW Building Right by Bukgansan-Bogungmun Station, 4.6% 'High-Yield' Investment Secret
In Jeongneung-dong, Seongbuk-gu, Seoul, near Gil-eum New Town, where transportation convenience has further improved with the recent opening of the Ui Sinseol Line, there's a real estate investment case study of a small building boasting an impressive rental yield that's attracting attention. This 'golden egg-laying' small building, located right in front of a subway station exit and poised to benefit from the future development of Gil-eum New Town, holds the secret to high-yield investment, which we'll unveil right now!
Today, we're excited to introduce an investment case study of a building located at 286-5 Jeongneung-dong, Seongbuk-gu, Seoul, which was sold for 4.8 billion KRW (approximately 36.65 million KRW per pyung) in May 2020. This is a 3-story building with a land area of 130.98 pyung and a total floor area of 262.66 pyung, boasting a prime location on a corner lot at a four-way intersection right in front of an exit of Bukgansan-Bogungmun Station on the Ui Sinseol Line. The remarkably high rental yield of 4.6% is an extremely attractive investment point in this era of low interest rates.
Right in Front of Subway Exit, Bus Stop! Optimal Commercial District with 'Overflowing' Foot Traffic
This small building enjoys an overwhelming amount of foot traffic due to its location right at a subway station exit and on a corner lot at a four-way intersection. With a local bus stop situated directly in front of the building, it's perfectly positioned along the routes used by people traveling by car and on foot to access the subway exit. Such locations with high public transportation usage naturally foster the development of local-friendly commercial districts, resulting in low vacancy rates and the expectation of stable rental income.
Furthermore, the area surrounding the building is a residential area densely populated with schools, including Gil-eum New Town, Seokyeong University, Daeil Foreign Language High School, Gil-eum Elementary School, Gil-eum Middle School, Samgaksan Elementary School, and Samgaksan Middle School, ensuring a strong demand from students. The fact that it's a stable commercial district less affected by economic fluctuations is another significant advantage of this building.
Super-Prime Location on a Subway Exit Corner! A 'Golden' Building with a Large Land Area and High Floor Area Ratio
Being located on a corner lot at a four-way intersection right at a subway station exit, just a 1-minute walk away, is an undeniable top-tier advantage. Situated on a corner where 8-meter and 6-meter roads meet, it experiences frequent traffic of both vehicles and pedestrians. The large land area of 131 pyung offers significant potential for various uses. Notably, this building has an exceptionally high floor area ratio of 85.44%, exceeding the legal limit (60%) by approximately 33 pyung in building area, making it an extremely valuable property. Having a larger building area compared to the land area indicates outstanding land utilization within the building, which directly translates to securing more rentable space and significantly contributing to increased profitability.
6 First-Floor Shops, Toz Study Cafe on the Second Floor! Stable Tenant Composition
This small building houses a total of six diverse commercial spaces on the first floor, including a pharmacy, real estate agency, pizza place, hair salon, butcher shop, and supermarket, while the entire second floor is leased by Toz Study Cafe, a popular franchise, ensuring a stable rental income stream. Although the absence of a basement is a slight drawback, this is more than compensated for by the excellent floor area ratio and the stable tenant composition. The diverse mix of tenants provides a strong ability to cope with vacancy risks, even if vacancies occur.
'Hidden Gem' in an Undervalued Area! Potential for Capital Gains Through Development of Extensive Public Transportation Networks
The investor who acquired this building recognized the high potential for capital gains due to the development of light rail and other public transportation infrastructure in the Jeongneung-dong area of Seongbuk-gu, which they believed was undervalued. They likely decided to invest in this opportunity to purchase a building right at a subway exit in the 4 billion KRW range, at a price of around 30 million KRW per pyung. The stable rental income with a high yield of 4.6% in an era of low interest rates, as well as the potential for leveraging bank loans for a high return on investment with a relatively small initial capital outlay, were also likely key factors in their investment decision.
In conclusion, this small building investment case study represents a successful venture that achieved the trifecta of a stable rental income, high potential for capital gains, and an excellent location. It's a prime example that anyone interested in investing in small buildings should definitely take note of.
