Entering the Medway property market only today, is a great HMO opportunity on Granville Road in Gillingham, which is on the market for £170,000.
As it is 0.4 miles from Gillingham station the location is great for the working professional HMO market.
On the ground floor the front room would need a partition wall to create an extra bedroom. Upstairs are three separate bedrooms ready to be let. Bedroom one and two look big enough to be turned into en-suites. The downstairs basement has two rooms, which look very large and could be turned into en-suites. With four en-suites commanding rents of £500 (single occupancy only) and the other two rooms sharing a bathroom bringing around £450, expect approx £2,900 in rent per month.
From my preliminary checks, the living area seems to be over 12 metres squared and so should be suitable for a licence for six persons, however the kitchen is slightly below the nine metres squared required. So some rejigging may be required and you may have to get architects/interior designers involved. Make sure you investigate this with the council, I have some great contacts so can put you in touch if required.
With HMOs sometimes having a high turnover of occupants, budget for a worst-case scenario of one room to be empty year round. This brings a gross turnover of £31,900
With a £170,000 purchase cost, £6,000 stamp duty bill, £2,000 in legal costs and a £50,000 refurb (estimate) total spend comes in at £228,000. With this turnover you could be getting a 13.99% yield.
What about capital growth? Average terraced house prices in this postcode have risen by 32.81% over the last five years, which is in line with the rest of Gillingham. So expect average or better capital growth with an excellent potential yield.
If you decide to view this one, let me know and I’ll try and come along. If you wanted to chat about this property or any others give me a call, my numbers 07944 726676, or ping me an email with a relevant property at email@example.com and I’ll give you my advice.
Thanks and talk to you soon.