HMO Investment Analysis: Ventnor Avenue

Executive Summary

This property at Ventnor Avenue, Lozells, B19, represents a compelling HMO conversion opportunity. Currently a 4-bed, the layout allows for a straightforward conversion into a 5-bedroom, 1-bathroom HMO by utilizing the ground and first-floor living rooms as bedrooms. The acquisition price of £210,000 provides good headroom for the required refurbishments. With proper licensing and fire safety compliance, this asset is well-positioned for strong cash flow in the Birmingham rental market.

Acquisition Overview

Projected Rental Income (Post-Refurb)

Projected Cashflow & Returns

Licensing & Compliance

• Mandatory Licence: Required (5+ occupants).
• Additional/Selective Licence: Birmingham City Council requires HMO licensing for specific wards; check local Article 4 status.

Property & Layout Analysis

Max Compliant Occupant Count: 5. Recommended Layout: 5 bedroom house share, repurposing ground/first living rooms.

Refurbishment Plan

Worker Tasks (Contract Input):

• Install Interlinked Fire Alarm System (Grade A, LD2) - Cost: £1,200
• Fit FD30 fire doors to all 5 bedrooms - Cost: £1,800
• Install thumb-turn locks on all bedroom doors - Cost: £400
• Electrical EICR remedial works - Cost: £800
• Fit emergency lighting on escape route - Cost: £500
• Repaint hallways and communal areas - Cost: £1,500
• Upgrade kitchen appliances (second fridge/freezer) - Cost: £600
• Install additional worktop/shelving in kitchen - Cost: £400
• Deep clean property - Cost: £300
• Repair conservatory leak/utility area floor - Cost: £1,500
• Install fire blankets and fire extinguishers - Cost: £250
• Replace bedroom flooring/carpets - Cost: £2,000
• Upgrade bathroom ventilation (extractor fans) - Cost: £450
• Install radiator guards/covers - Cost: £300
• General carpentry (snagging) - Cost: £1,000
• Total Estimated: £13,000 (Excluding furniture and contingency)

Shopping List:

• 5x Beds & Mattresses - £1,500
• 5x Wardrobes - £750
• 5x Desks & Chairs - £500
• 5x Curtains/Blinds - £250
• Interlinked Smoke Alarms - £300
• 5x FD30 Fire Doors + Frames - £1,250
• Second Fridge/Freezer - £400
• Kitchen Utensils & Pots/Pans - £300
• Microwave/Kettle/Toaster - £200
• Emergency Lighting Fittings - £150
• Fire Extinguishers (x2) & Blanket - £100
• Living area/Hall Decor (Paint/Wallpaper) - £400
• Bathroom Extractor Fan - £100
• Bedroom Lighting Fixtures - £250
• Thumb-turn Cylinder Locks - £200

Timeline:

Total Time: 8 Weeks || 2 Months

Investment Case Summary

Short Recommendation:

Proceed with acquisition for HMO conversion. The layout easily accommodates 5 rentable rooms, and the B19 location supports demand for room rentals. Ensure fire safety is the priority to meet HMO licensing standards.

Detailed Recommendation:

The property is currently undervalued for its potential use as a 5-bed HMO. By converting the living rooms into rentable units, you generate an additional income stream compared to a standard 4-bed family let. The "First-time buyer" status might complicate buy-to-let mortgage financing immediately, so consider bridging finance or purchasing under a limited company if you intend to scale. The primary risks involve potential Article 4 planning restrictions in B19; ensure you conduct a local search to verify if full C4 planning permission is required. Financially, the project provides a strong yield, well above standard BTL returns, assuming high occupancy.

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