HMO in Manchester

Property Details
• Detached freehold property
• Existing 4-bedroom, 2-bathroom layout
• Total internal floor area: 156 m²
• Suitable for conversion into a 5-bedroom all-ensuite professional HMO
• Minimal structural alterations anticipated, reducing both conversion costs and programme duration

Financial Summary
• Target purchase price: £330,000
• Purchase costs: £19,850, including: SDLT: £15,000, Legal fees: £1,500, Sourcing fee: £3,000, Insurance: £350
• Estimated conversion costs: £33,000
• Estimated rental income: £3,500 PCM (£42,000 PA)
• Mortgage assumption: 75% Buy-to-Let mortgage at 5% interest, estimated monthly payment of £1,328
• Estimated net cash flow: £1,613 PCM (£19,350 PA)
• Gross yield: 10%
• ROCE: 20%
• Total cash investment required: £107,745
• Estimated commercial value (GDV): £420,000

Commercial Valuation
Estimated commercial value of £420,000 based on a 5-bed all-ensuite HMO generating £42,000 gross annual rental income at a 10% investment yield.

Funding
The financial appraisal assumes acquisition funded by a 75% LTV bridging loan and 100% development finance followed by refinancing onto a buy-to-let mortgage on completion of the HMO conversion.

Investment Rationale
• Strong value-add opportunity through conversion to a high-quality professional HMO
• Large detached property with an efficient layout suitable for five ensuite bedrooms
• Attractive projected cash flow and return on capital.
• Conservative commercial valuation supports a robust refinancing strategy
• Subject to planning approval and satisfactory due diligence, the scheme offers the potential to deliver a strong long-term income-producing asset.