FLIP · Property AnalysisThis report analyzes the flip potential of the 2-bedroom apartment at Delta Point, Salford. Purchased at £160,000, a pragmatic refurbishment costing an estimated £12,000 is proposed to enhance market appeal. With an estimated After Refurbishment Value (ARV) of £230,000, and factoring in all acquisition and refurbishment costs, the projected Return on Investment (ROI) stands at approximately 29.2%. This presents a solid opportunity, leveraging the property's location and current undervaluation against recent sales. Key risks include achieving the ARV and managing potential cost overruns.
The property is a 2-bedroom, 2-bathroom apartment located in Delta Point, Salford (M3 5JT), a prime urban area with excellent connectivity to Manchester city centre. The property is in good condition with a stylish bathroom and en-suite, suggesting a need for cosmetic refresh rather than structural renovation. The size is 710 sq ft.
The subject property at Delta Point, Salford, is a 2-bedroom, 2-bathroom apartment (710 sq ft) listed at £160,000. Recent sales data for similar 2-bed, 2-bath apartments in the M3 5JT postcode show figures ranging from £208,000 to £226,000. The property's current "good standard" condition suggests minimal structural work is needed, allowing for a focused cosmetic refurbishment. An investment of £12,000 is allocated for painting, refreshing flooring, updating kitchen hardware, minor bathroom enhancements, and professional cleaning/staging. This aims to align the property with contemporary buyer expectations and target the upper quartile of comparable sales. Leveraging nearby properties with guide prices reaching up to £290,000, and considering the recent sales performance, a realistic After Refurbishment Value (ARV) of £230,000 is estimated. This reflects a potential uplift of £70,000 from the purchase price, driven by cosmetic improvements and the property's desirable location and amenities.
| Metric | Value |
|---|---|
| Purchase Price | £160,000 |
| Estimated Refurbishment Cost | £12,000 |
| Estimated Resale Value (ARV) | £230,000 |
| Potential Uplift | £70,000 |
| Confidence Level for ARV | Medium-High |
ROI Calculation:
Gross Profit: £46,691
Total Project Cost (Purchase + Refurbishment): £160,000 + £12,000 = £172,000
ROI: (£46,691 / £172,000) × 100 = 27.1%
Manchester and Salford continue to see strong demand for well-located apartments, particularly those offering modern amenities and convenient city access. While the market can be competitive, properties in good condition with clear value-add potential, like this one, are likely to perform well. Short-term price appreciation for apartments in this area is typically stable, around 3-5% annually, assuming no major economic shocks. The key to profit here lies in the initial purchase price being below market value and efficient execution of the refurbishment and sale.
The seller's motivation appears to be moderate to high, indicating a potential opportunity for negotiation.
The primary risks associated with this flip opportunity are manageable. The property is not unusual, and the refurbishment is cosmetic, minimizing construction risks. The key challenges lie in accurately achieving the ARV and managing costs.
The current layout of this 2-bedroom apartment does not easily accommodate the addition of a third bedroom without significant structural alterations, such as reconfiguring the open-plan living area or kitchen. Such extensive changes are generally not cost-effective for a flip strategy in an apartment setting and would require substantial investment and potentially leaseholder consent.
Recommendation: Due to the low certainty, high cost, and significant risk involved, adding a bedroom is not recommended for this property's flip strategy.
Leverage the following points to negotiate the purchase price down:
Probability of Successful Negotiation: 75% to secure a purchase price in the range of £140,000 - £150,000, which would significantly boost ROI.
The refurbishment will focus on a pragmatic, cosmetic refresh to enhance appeal and command the target ARV. This involves updating finishes and ensuring the property is presented to a high standard for sale. The approach is mid-range, focusing on visual impact and buyer perception.
Note: Labour costs are integrated into the above estimates for each item.
Recommended for a flip. The property presents a strong opportunity due to its purchase price being below recent comparable sales, combined with a clear, low-cost refurbishment plan. The projected ROI of 27.1% offers attractive returns. Proceed with caution, targeting the higher ARV.
The apartment at Delta Point, Salford, offers a compelling flip investment. Purchased at £160,000, it appears undervalued compared to recent sales in the M3 5JT postcode (£208k - £226k for similar 2-bed, 2-bath units). A strategic cosmetic refurbishment of £12,000 is proposed, focusing on painting, flooring refresh, kitchen/bathroom hardware updates, and professional staging to maximise appeal. This would achieve an estimated ARV of £230,000.
Factoring in all associated costs – including Stamp Duty (£0), solicitors (£3,000), surveyor (£600), refurbishment (£12,000), holding costs (approx. £4,259 over 4 months), and selling costs (£4,950) – the total investment is estimated at £183,309. This results in a projected gross profit of £46,691 and a robust ROI of 27.1%.
The seller's motivation signals ("No Onward Chain," "Price Reduction") suggest a willingness to negotiate, potentially allowing for an even more favourable purchase price. The risks, primarily achieving the ARV and managing costs, are moderate and can be mitigated through diligent project management and market monitoring. The potential for adding a bedroom is negligible and not advised. This flip is recommended for investors seeking a good return in a strong urban market, provided diligent execution and cost control are maintained.