Investment
opportunity

investments in the UK

Mixed commercial to HMO conversion

Throughout refurbishment and conversion of a mixed commercial property into an 8 bed HMO.

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Boat in a river

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Location

Warrington – UK

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Buying price

182’700£

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Conversion

35’500£

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Total investment

218’200£

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End value

248’640£

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Net rental income

21’922£

Strategy

This project consists in the purchase of a mixed residential-commercial property with the objective of turning it into an 8 bed HMO. The property needs to undergo a complete refurbishment to a high, modern standard. The commercial unit will be converted into residential, accommodating 4 ensuite double bedrooms. The property will feature 4 double bedrooms with private bathroom, 4 double bedrooms with shared facilities and a communal kitchen area. 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 180’000£
TRANSACTION COSTS 2’700£
REFURBISHMENT 35’500£
TOTAL INVESTMENT 218’200£
END VALUE 248’640£
Rental income
GROSS RENT 44’400£
MANAGEMENT COSTS 5’328£
BILLS AND TAXES 12’200£
MAINTENANCE 4’950£
NET INCOME 21’922£

Refurbishment

BUYING PRICE: 180’000£
TRANSACTION COSTS: 2’700£
REFURBISHMENT: 35’500£
TOTAL INVESTMENT: 218’200£
END VALUE: 248’640£

Rental income
GROSS RENT 44’400£
MANAGEMENT COSTS 5’328£
BILLS AND TAXES 12’200£
MAINTENANCE 4’950£
NET INCOME 21’922£

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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