Start to finish of the conversion project
Mark Barrett, a HMO expert, and a Sourced Network Franchisee recently completed a HMO conversion and refurbishment project based in Manchester.
Prior to the conversion, the property was a 5-bed terraced HMO that has now been converted into a high-end 6-bed all en-suite HMO, with potential to add a 7th bedroom once planning has been approved and the property is fully tenanted. The area of the property is very popular between professionals, as it accommodates a sociable and affordable atmosphere.
The refurbishment/conversion project started just towards the end of a Covid-19 lockdown, which wasn’t ideal, so Mark and his team ended up taking a few weeks extra for the conversion, so in total the project took 14 weeks to reach completion.
- Purchase price: £170,000
- Refurb costs: £85,000
- Potential rent: £575 – £625 per room/pcm
- Expected ROCE: 10% – 12%
Mark also has a few other potential projects in the works. For example, the franchisee has just had planning approved for a small 4-bed HMO located in Salford, in an article 4 area.
Challenges faced due to Covid-19
Mark states that his biggest challenge with Covid-19 was the supply of the materials and working with the builders, but the project took only a couple extra weeks to complete, and the clients were extremely happy with the outcome.
The present COVID-19 outbreak has had a tremendous and unexpected impact on the building industry. Many construction sites have been struck the hardest by the new laws around self-isolation and social separation. Not only are projects not being completed, but many are also remaining in a condition of degradation for the time being.
Because of the necessary site closures and the requirement for staff to stay at home, many people working in the construction industry have had their businesses impacted, and many have forecast that they will face a large, negative financial impact during this period.
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HMOs are an excellent and risk-free way to supplement your monthly income. This approach is becoming increasingly popular among investors, since it can provide a passive income with significant returns on investment.
To find out how Sourced Franchise can help you generate an income of £100,000 – £150,000 from HMOs in a year, download your copy of our Sourced Network prospectus.