Starting Point:
This terrace property in Pin Green, Stevenage was purchased as a three bedroom house. It offered lots of potential – a quick conversion could increase the yield enormously.
Negotiation with our estate agent contact achieved a discount of almost 7% on a purchase price that was already set for a quick sale.
The Work Involved:
Through our local contacts, HMO Property Sourcing Ltd organised and project managed the transformation of this house. The number of bedroom doubled from three to six. Three bedrooms became en suite rooms, with another three bedrooms sharing a bathroom.
Doubling the number of bedrooms within this house cost £42,700. The work was achieved in just 7.5 weeks. Once a property has been secured, we believe that it should start offering a return as soon as possible.
| Return On Investment: | |
| Asking price: | £215,000 |
| Final purchase price: | £200,450 |
|
Cash investment: |
|
| Deposit: | £31,050 |
| Acquisition costs: | £11,570 |
| Refurbishment costs: | £42,700 |
| Total investment: | £85,320 |
| Total gross rentals: | £3,160 per month |
| Net operating income: | £2,044 per month |
| Cash Flow: | £1,166 per month |
| Annual return on cash investment: | 16.4% |
In Summary:
Martin Roche of HMO Property Sourcing Ltd says: “16.4% is an excellent return on investment and typical of what can be achieved with HMOs. Our contacts are our strength – helping us to find properties before they arrive on the open market and knowing excellent, reliable teams who deliver the refurbishment work needed. We always aim to fill the house with reliable tenants as soon as possible.”
