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tel.  07980 884694       email.  info@hmomatters.co.uk

Guildford HMO Conversion

Background

This property was a 3 bedroom semi-detached property with two reception rooms downstairs which was purchased in October 2017. The plan was to convert it into a state of the art 6 bedroom (5 en-suite, 1 off-suite) HMO.

Why this Property?

The property is situated near to a fairly large hospital and also a Business Park. It is situated in an area of Guildford which in our view is under valued in comparison to other parts of guildford, which meant the purchase stacked up better in terms of our return.

The property had a very large garage to the left, which we knew we could convert into two en-suite bedrooms.  With the existing house, the main bathroom became an off-suite to the smaller bedroom, and we were able to convert the other two bedrooms as well as the lounge downstairs into en-suites. There was a large kitchen diner which would become the communal area.

Numbers at a glance

Property Purchase

 

 

Property Price

395,000  

S/Duty plus other fees

12,500

 

Building/Conversion Costs

120,000

 

Total Investment

 

527,500

Property value (after works)

550,000

 

Mortage Advance (75% LTV)

 

412,500

Money left in  (Investment minus advance)

 

115,000

Return On Investment

   

Revenue

   

Ave. Room rate

650  

No. of bedrooms

6  

Total Revenue

 

46,800

Costs

   

Running costs

9,000

 

Mortage Interest

13,922

 

Management

5,616

 

Total costs

 

28,538

     

Profit

 

18,262

% Return on Investment 

 

116

Notes:

  • Mortgage advance is based on a new property valuation of 395,000 after completion of the works.
  • Initial Investment funded by bridging finance.