HMO Investment Analysis: Wyles Street, Gillingham
Investment Strategy: HMO Conversion. A 3-bed terrace requires significant structural reconfiguration to achieve a compliant 5-bed HMO, primarily due to the current "bedroom-through-bedroom" layout issue.
Executive Summary
This property is a classic "HMO conversion project". Located in ME7, Gillingham, demand for professional sharer accommodation is high due to proximity to the hospital and university. However, the current layout is non-compliant as an HMO due to the "bedroom through bedroom" arrangement (Bedroom 3 access). The purchase price of £210,000 (assumed) offers a solid entry point, but the budget must account for substantial structural works to create independent access for all bedrooms and add necessary bathroom capacity.
Projected Financial Performance
Property & Layout Analysis
Lounge (B1)
Ground • 10.9m² • Pass
Dining (B2)
Ground • 10.6m² • Pass
Bed 1 (Master)
First • 10.9m² • Pass
Bed 2
First • 11.8m² • Pass
Bed 3
First • 5.5m² • Fail (Storage Only)
Critical Note: The current layout is fundamentally non-compliant. Bedroom 3 is accessed via Bedroom 2. This must be corrected by installing a corridor or reconfiguring the landing.
Refurbishment Plan
Scope: High-standard HMO professional finish. Total estimated cost: 55000.
Workers Task List:
- Strip out kitchen and bathroom - Cost: 1500
- Structural work to create hallway access to bedrooms - Cost: 6000
- Full electrical rewire (HMO compliance) - Cost: 5500
- Install FD30 fire doors to all bedrooms - Cost: 2500
- Plastering throughout - Cost: 4500
- Plumbing for 2 new en-suites - Cost: 5000
- Install new kitchen units & appliances - Cost: 5500
- Tiling and bathroom fitting (2 en-suites, 1 main) - Cost: 6000
- Decoration (painting/finishing) - Cost: 3000
- Install interlinked smoke/heat detection - Cost: 1200
- Flooring installation - Cost: 3500
- Garden landscaping (tidying) - Cost: 1500
- Skirting/architraves/joinery - Cost: 2000
- Waste removal (skips) - Cost: 1300
- Final snagging and clean - Cost: 500
Shopping List (Primary Items):
- 5x Beds and Mattresses - Cost: 2500
- Kitchen Units & Worktops - Cost: 2000
- Integrated Oven & Hob - Cost: 800
- 2x Fridge/Freezers - Cost: 1000
- Washing Machine & Tumble Dryer - Cost: 900
- 5x Desks and Chairs - Cost: 1000
- Shower enclosures x3 - Cost: 1500
- Toilets & Sinks x3 - Cost: 900
- Taps and mixers - Cost: 400
- Fire Door sets - Cost: 1200
- Smoke/Heat Alarms - Cost: 400
- Emergency Lighting - Cost: 300
- Curtains/Blinds - Cost: 500
- Lighting fixtures - Cost: 600
- Radiators - Cost: 700
Timeline:
Weeks: 12 || Months: 3
Phase 1: Strip-out & Structural - 3 weeks
Phase 2: First Fix (Elec/Plumb) - 3 weeks
Phase 3: Plastering/Second Fix - 3 weeks
Phase 4: Finishing/Carpets/Snagging - 3 weeks
Risk Assessment
Risk Level: 45 (Moderate). The property is fundamentally a good candidate, but the layout issue (B3 access) is a significant licensing barrier. The risk is manageable with professional construction oversight. Avoid if structural changes are deemed impossible due to joist direction/load-bearing walls.
Negotiation Points
- Layout Defect (Bed 3 Access): Potential cost to remediate is high. Negotiate a £10,000 reduction.
- Condition: Property requires full modernization. Suggest £5,000 reduction.
- EPC Rating: Old windows/heating likely yield poor efficiency. Negotiate £3,000 for energy upgrades.
Investment Case
Recommendation: Proceed with caution. This property is a viable HMO conversion if the structural layout is corrected to provide separate access to all bedrooms. The rental yield in Gillingham for professional en-suite rooms is robust. Ensure you have the budget for the structural reconfiguration before exchanging contracts.
HMO · Property Analysis