BTL · Property AnalysisAn auction-based acquisition and renovation analysis for a 3-bed terraced house. Guide Price £200,000. This property represents a substantial BRRR (Buy, Refurb, Rent, Refinance) opportunity in East London, contingent on resolving the EPC F-rating and full interior modernisation.
Market rental evidence for modernised 3-bed terraced homes in Dagenham (RM9) is strong, with averages trending around £1,900 pcm. Based on the purchase price of £200,000 plus an estimated £45,000 refurbishment, our total capital employed is £209,800. With a deposit of £40,000 and renovation costs covered, the Return on Capital Employed (ROCE) is 7.6%.
Monthly cash flow is robust. Note: This calculation utilizes your provided input of a 1% interest rate, which is significantly lower than current market rates. Even adjusting for a more standard 5.5% commercial BTL rate, the property remains cash-flow positive.
With comparable properties selling in the £350k–£400k range, a completed, high-spec refurbishment is expected to achieve an ARV (After Refurbishment Value) of £360,000. This creates an immediate equity injection of over £100k, providing a significant buffer for any market correction.
Extremely high demand in Dagenham. Being located 0.07 miles from Dagenham Heathway (District Line) makes this a prime location for commuters. Target tenants: Young professionals and families working in London/Canary Wharf.
BRRR: The core strategy. Refinance 6 months post-refurb to extract equity. Flip: Valid option if capital liquidity is required, though capital gains tax (if not primary residence) must be considered. Hold: Excellent long-term yield potential.
The property is in poor condition (EPC F, missing kitchen). It requires full modernisation: rewire, heating system (boiler), kitchen install, bathroom suite, plastering, and floor coverings.
High risk due to auction nature (no chain, but no survey beforehand). EPC F rating is a significant legal risk for new tenancies—must be improved to 'C' or 'E' with exemptions before renting. Structural integrity of the "missing kitchen" area needs checking.
Fitted Kitchen Units - Cost: £3,500
Kitchen Appliances - Cost: £1,200
Bathroom Suite - Cost: £1,000
Boiler & Cylinder - Cost: £2,500
Radiators (x6) - Cost: £800
LVT Flooring - Cost: £2,200
Carpets (Bedrooms) - Cost: £1,500
Lighting/Sockets - Cost: £600
Skirting/Architrave - Cost: £700
Paint/Supplies - Cost: £800
Tiles (Bathroom/Kitchen) - Cost: £900
External Doors - Cost: £1,800
Fencing/Garden - Cost: £1,200
Consumer Unit - Cost: £400
Door Furniture - Cost: £300
Full Strip Out - Cost: £1,500
Rewiring - Cost: £2,500
Plumbing/Heating install - Cost: £2,000
Plastering - Cost: £4,500
Kitchen Fitting - Cost: £1,500
Bathroom Tiling/Fitting - Cost: £1,500
Flooring Installation - Cost: £1,000
Painting & Decorating - Cost: £2,500
Carpentry - Cost: £1,200
Rubbish Removal - Cost: £800
Gas Safe Certification - Cost: £300
EICR Certification - Cost: £300
Final Cleaning - Cost: £400
Garden Landscaping - Cost: £1,000
Project Management - Cost: £3,000
Total: 14 Weeks || 3.5 Months
This is a high-conviction "Buy, Refurb, Rent" play. The property is currently unlettable (missing kitchen/EPC F), which keeps the competition at bay. If you can secure this at or near the guide price of £200,000, the post-refurb equity lift is substantial. Recommendation: Proceed to full due diligence (survey) immediately. Ensure the EPC improvement plan is feasible before bidding. The numbers are strong, provided the auction bid is disciplined.