Investment
opportunity
House in multiple occupation with refurbishment
Throughout refurbishment with space optimization and conversion for HMO rental model
Location
WARRINGTON – UK
Buying price
150’850£
Refurbishment
85’450£
Total investment
236’300£
End value
280’000£
Net rental income
30’312£
Strategy
This project consists in the purchase of an old, wrecked 5 bed terraced house with the objective of turning it into a 9 bed, all ensuite HMO, subject to planning consent. The property needs to undergo a complete strip out and a complete refurbishment to a high, modern standard.
The property will feature 9 double bedrooms with ensuite bathroom, plus a shared kitchen. There is also space for large communal areas, a feature that will make it stand out. Once completed the property can be refinanced up to 75% LTV or sold on the market in order to cash in the value uplift.
| Refurbishment | |
|---|---|
| BUYING PRICE | 145’000£ |
| TRANSACTION COSTS | 5’850£ |
| REFURBISHMENT | 85’450£ |
| TOTAL INVESTMENT | 236’300£ |
| END VALUE | 280’000£ |
| Rental income | |
|---|---|
| GROSS RENT | 54’000£ |
| MANAGEMENT COSTS | 6’480£ |
| BILLS AND TAXES | 12’888£ |
| MAINTENANCE | 4’320£ |
| NET INCOME | 30’312£ |
Refurbishment
BUYING PRICE: 145’000£
TRANSACTION COSTS: 5’850£
REFURBISHMENT: 85’450£
TOTAL INVESTMENT: 236’300£
END VALUE: 280’000 – 280’000£
| Rental income | |
|---|---|
| GROSS RENT | 54’000£ |
| MANAGEMENT COSTS | 6’480£ |
| BILLS AND TAXES | 12’888£ |
| MAINTENANCE | 4’320£ |
| NET INCOME | 30’312£ |
Comparable properties
| Property type | Address | Selling price |
|---|---|---|
| 3 bed terraced Buy to Let | 82 Manchester Road WA1 3AN | 193’000£ (Feb 2019) |
| 1 bed Buy to Let | 18 Salisbury Street WA1 3AS | 322’226£ (2019) |
| 3 bed terraced Buy to Let | 80 Manchester Road WA1 3AN | 190’000£ (Sep 2018) |
| 4 bed terraced Buy to Let | 316 Manchester Road WA1 3RE | 275’000£ (Aug 2018) |
Comparable properties
| Property type | Selling price |
|---|---|
| 3 bed terraced Buy to Let | 193’000£ (Feb 2019) |
| 1 bed Buy to Let | 322’226£ (2019) |
| 3 bed terraced Buy to Let | 190’000£ (Sep 2018) |
| 4 bed terraced Buy to Let | 275’000£ (Aug 2018) |
Location
Warrington is a large town in the North West of England in between Liverpool and Manchester, with excellent motorway and rail links to both. With a population of 210 000 Warrington is the largest town in the county of Cheshire. There is a large Unilever factory in Warrington where detergents are made. IKEA chose Warrington as the location for their first store when they came to the UK. The Omega Development Site close to the M62 on the northern edge of Warrington is a major business park to be developed in stages over the next 30 years. Warrington has also set out its plans to become a “New City” by looking to build up to 24,000 new homes and around 381 hectars of land over the next 20 years. Once the new homes and employment areas are built it is hoped that it will take the population of Warrington to around 350,000.
Warrington has strengths in the chemicals and plastics industry with key manufacturers, which include Perstorp, Solvay, PQ Silicas, Unilever, Colas and Perrite. Automotive related suppliers include: Clarcor (Baldwin Filters), Camcoat Performance Coatings, Krauss Maffei and K&N Filters. Engineering is notably strong, particularly in nuclear engineering. Key employers in this sector include Sellafield Ltd, Rolls- Royce, Nuvia, and AMEC. Due to its central location in the motorway network there is significant logistics and warehousing sector, including DHL. Warrington has the fourth highest jobs growth in the UK (at 4.5% – only bettered by Edinburgh, Brighton and London).
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