Case Study 1 - Broxholme Lane, Doncaster 4 Bedroom Terrace Property (Private Rentals)
The property was traditionally a large 4 bedroom Victorian terrace, which has been converted into a 6 studio HMO property. Each room is equipped with an en-suite bathroom and a small kitchenette facility.
General works included a complete overhaul of the property including re-wiring, new central heating system and boiler. Following complete demolition of the interior; re-plastering, new doorways, doors, architrave, skirting, fitted kitchens and bathrooms to each room.
The property was extended within the boundaries of permitted development, meaning no planning permission was required. New carpets were fitted meaning the property was finished to the highest quality to attract high quality tenants. The property is let to 6 tenants on individual 6 month Assured Shorthold Tenancies (AST’s) at premium rents of £110.00 per week.
- Purchase price - £140,000
- 6 studios, average cost per studio - £10,000 (£60,000 Total)
- Total cost (including interest) - £208,875
- Rental value - £34,320 (16% gross yield)
- Investment value - £360,000
Case Study 2 - Colenso Mount, Leeds 4 Bedroom Mid-Terrace Property (Council Rentals)
In order to create a balanced portfolio which provides accommodation for the higher and lower ends of the letting market, this property was chosen in a less affluent residential area which created a benefit with regards to higher yields. This property is let to housing benefit claimants, through Leeds City Council, which requires higher management charges for £103.85 per week.
- Purchase price - £88,000
- Work costs - £62,000*
- Total cost - £150,000
- Rental value - £36,764 (25% gross yield)
- Investment value - £250,000
*The work costs were gained at a now unobtainable rate. The current rate would be £70,000 (7 x £10,000)
The General Partner will also seek to take advantage of market trends and opportunities that arise, based on a minimum target yield of 15%.
There is a plentiful supply of commercial properties available, which can, and already have been adapted to the HMO model above. For example, previous pubs provide a vacant and inexpensive opportunity to develop. Ground floors can either be converted to remain commercial, separately leased, assets, or developed in the HMO development process.
Case Study 3 - 87-89 St Sepulchre Gate, Doncaster, 2 Floor Freehold Commercial Property (Proposed)
The ground floor was purchased and currently let to Co-op Funeral Service with required development rights and access, to enable full HMO development on the first and second floors.
- Purchase price - £240,000
- HMO work costs - £160,000
- Total cost - £400,000
- Ground Floor let - £29,550 pa
- HMO lets - £83,200 pa
- Rental value - £112,750 (26% gross yield)
- Investment value - £940,000