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

North Bristol HMO Conversion

Background

This property was a 3 bedroom semi-detached property with two reception rooms downstairs. We purchased in January 2019. The plan was to convert it into a state of the art 6 bedroom (5 en-suite, 1 off-suite) HMO.

Why this property, and what we did with it

The property was not only located near a large hospital, it is also very close to three very large employers, and so we knew tenant demand would be strong.  It is also in an area of Bristol where property prices are much lower then adjacent area, meaning the purchased stacked up well for us.

The property had some space to the side, which meant we could build a side extension to add two en-suite bedrooms, as well as a utility room  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. The existing kitchen was adjacent to the dining room, so we were able to create a large open plan kitchen/lounge

Numbers at a glance

Property Purchase

 

 

Property Price

265,000  

S/Duty plus other fees

6,000

 

Building/Conversion Costs

120,000

 

Total Investment

 

391,000

Property value (after works)

400,000

 

Mortage Advance (75% LTV)

 

300,000

Money left in  (Investment minus advance)

 

91,000

Return On Investment

   

Revenue

   

Ave. Room rate

550  

No. of bedrooms

6  

Total Revenue

 

39,600

Costs

   

Running costs

9,000

 

Mortage Interest

10,125

 

Management

4,752

 

Total costs

 

23,877

     

Profit

 

15,723

% Return on Investment 

 

17

Notes:

  • Mortgage advance is based on a new property valuation of 400,000 after completion of the works.
  • Initial Investment funded by bridging finance.