BTL · Property AnalysisA comprehensive Buy-to-Let (BTL) evaluation for a 3-bedroom semi-detached/terraced property priced at £120,000 scheduled for online auction with a tenant currently in situ generating immediate income.
The post-refurbishment gross yield of 11.00% is exceptionally strong, driven by a low purchase entry point of £120,000 and strong rental comps in the L10 postcode (average weekly rents around £313). Return on Capital Employed (ROCE) is calculated based on total initial capital outlay of approximately £45,300 (including 25% deposit, stamp duty, legal fees, and light refurbishment), yielding robust annual net returns.
Operating cash flow is highly positive from day one due to the existing tenant paying £700 pcm, scaling up to £450 positive monthly cash flow post-refurbishment after accounting for a 75% LTV interest-only mortgage (£413), 10% agent management fees, insurance, and maintenance voids.
Local sold comparables (e.g., 67 Harrismith Road sold at £142,500 and surrounding streets achieving up to £180,000 for modernised semi-detached homes) validate an ARV of £165,000. Combined with regional regeneration initiatives across North Liverpool, capital growth potential is rated a solid 7 out of 10.
Lender Stress Test: PASS
At a stressed interest rate of 7.5%, the required rent to achieve 125% coverage is £515.63. The projected post-refurb rent of £1,100 comfortably exceeds this requirement, easily satisfying lender criteria.
Tenant demand in the L10 Liverpool area remains extremely resilient, supported by proximity to local schools, parks, and direct transport links into Liverpool city centre.
Multiple flexible exit routes are available for this asset:
The property is structurally sound with modern elements already installed (such as a recent Glow-worm boiler and modern RCD consumer unit), but requires cosmetic updating across kitchens, bathrooms, flooring, and garden landscaping.
Add Bedroom Potential: Not recommended. The existing 3-bedroom layout is well-proportioned for the target rental demographic; structural expansion would fail to deliver a positive ROCE.
Low-Medium Risk. The presence of an existing tenant, freehold tenure, and modern boiler/electrics significantly de-risks the acquisition. Main considerations are auction completion deadlines (28 days) and ensuring smooth transition or renegotiation with the current tenant.
Neutral Emulsion Paint (5L) - Cost: £120
Satinwood Paint for Woodwork - Cost: £60
LVT Flooring (Boxes) - Cost: £600
Carpet & Underlay Rolls - Cost: £800
Kitchen Cabinet Replacement Doors - Cost: £800
New Laminate Worktop - Cost: £300
Kitchen Sink & Mixer Tap - Cost: £180
Bathroom Basin & WC Suite - Cost: £350
Bath Panel & Shower Screen - Cost: £150
Wall Tiles & Adhesive - Cost: £300
Modern Light Fixtures (x8) - Cost: £240
Internal Door Handles & Latches - Cost: £150
Garden Fencing Panels (x4) - Cost: £200
Smoke & CO Detectors - Cost: £90
Skip Hire (Builders Skip) - Cost: £350
Initial Property Clear-out - Cost: £400
Wall Prep & Minor Plaster Patching - Cost: £800
Ceiling & Wall Painting (Full Interior) - Cost: £1,200
Woodwork & Door Painting - Cost: £450
Kitchen Unit Refurbishment & Fitting - Cost: £750
Worktop & Sink Installation - Cost: £350
Bathroom Suite Installation - Cost: £600
Bathroom Tiling - Cost: £450
Laminate Flooring Installation - Cost: £350
Carpet Fitting Upstairs - Cost: £300
Internal Door Hanging - Cost: £250
Boiler Service & Electrical Check - Cost: £250
Garden Clearance & Landscaping - Cost: £600
Snagging & Finishing Touches - Cost: £300
Final Professional Clean - Cost: £200
Total Estimated Duration: 6 Weeks || 1.5 Months
Strong Buy / Proceed. This auction property offers an exceptional combination of high gross yield (11%), an existing tenant providing immediate cash flow, and a low entry price of £120,000. With a light £10k refurbishment, the asset can achieve an ARV of £165,000 and strong monthly cash flow. Ensure legal pack due diligence prior to the 28-day auction completion.
The 3-bedroom property on Harrismith Road represents an ideal high-yielding BTL and potential BRRR opportunity for astute investors. Priced competitively at £120,000 with a tenant already generating £8,400 per annum, the deal eliminates initial void periods and provides immediate revenue. Furthermore, the presence of a modern Glow-worm boiler and up-to-date consumer unit significantly lowers unforeseen capital expenditure risks during the renovation phase.
By executing a targeted £10,000 cosmetic refurbishment—focusing on kitchen and bathroom facelifts, fresh neutral decor, new flooring, and garden tidying—the property's rental income can be elevated to £1,100 pcm (£13,200 p/a), driving the gross yield to an impressive 11.00% and generating robust monthly positive cash flow of £450. Capital growth is equally compelling, supported by local sold comparables pointing to an After Repair Value (ARV) of £165,000.
The investment successfully passes lender stress tests at 75% LTV, and the freehold tenure eliminates leasehold complications. The main operational constraint is the 28-day completion requirement typical of unconditional auction purchases. Therefore, pre-auction engagement or swift financing preparation is advised. Overall, this opportunity combines high cash flow, strong ROCE, and forced appreciation potential, making it a high-conviction addition to any property portfolio.