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Showing results for tags 'hmo conversion'.
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HMO deal analysis
jitsy posted a topic in HMO AdviceHi everyone, I've got a few single lets where we've used the BRRR strategy and am now venturing out to my first HMO - however I'm struggling to assess whether it is a good deal! We've agreed a purchase on 3 bed terrace in the NW and we are looking to convert it to a 5 bed all ensuite. We know there is demand in the area we are looking at and are quiet confident that the rooms will be filled. The 'return on money left in' the deal once refinanced is suitable for what we are after and gives a reasonable cashflow. However, the biggest stumbling block for me is that the purchase price + fees + refurbishment cost is a fair amount greater than what the property will be valued at once the works are complete. What this effectively means, if we were to sell the property after the works we will lose money. The intention is not to sell. However, when we analyse our single lets one of our exit options is that we don't lose money if we had to sell the property after completion of works. This exit option wouldn't exist here due to the larger refurb cost associated with the HMO. I just wanted people's views on this - is this fairly common for those that have created their own HMOs? Thanks Jitsy
Costs of HMO conversion.
michaelkuki posted a topic in Refurbs & DevelopingHello Team I have a question with regards to the conversion of 3-bed with the dining room and reception to HMO: 4- bed with dining room around the Hull or Middlesborough area (generally up north What is the cost of turning this kind of property into HMO? In this example, let's say, the house is in good condition, no major works like roof needs to be done, apart from works to meet HMO criteria such as: fire doors, door closers etc. and extra toilet, electrics, boiler. What is your way of estimating HMO refurb costs? Any suggestions are welcome. Thank you:) Michal