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Deal WizardHMO · Property Analysis
4 bedroom detached house, Waun Draw, Caerphilly
Address: Waun Draw, CaerphillyPrice: £380,0004 Bedroom(s)3 Bathroom(s)Analysis Date: Jul 11, 2026
ROCE: 8.4 %Tenure Type: FREEHOLDProperty Type: DetachedCouncil Tax Band: ESize: 1221 sq ft / 113.4 m²Risk: MediumProject Time: 10 weeks

HMO Investment Analysis: CF83 3SL

Analysis for Buyer: First-time buyer. Strategy: HMO Conversion in Caerphilly.

Executive Summary

This 4-bedroom detached house in Caerphilly presents a high-potential HMO conversion opportunity. The property offers 1,221 sq.ft of space. Structurally, the house is a strong candidate for a 5-bedroom configuration. The primary challenge is the under-sized nature of existing bedrooms 3 and 4, which currently fail national space standards, requiring reconfiguration. The proximity to Caerphilly town center and local transport links (Energlyn & Churchill Park Station) makes this highly attractive for working professionals.

Acquisition Overview

Purchase Price
£380k
Down Payment
£40k
Est. Refurb
£40k
Total Investment
£80k

Projected Rental Income (Post-Refurb)

5 Rooms
£2,500
PCM
Est. Gross Yield
7.9%
Occupancy
95%

Rental estimates are based on the comparables provided, showing demand for high-quality, professional-grade HMO rooms in the Treforest/Caerphilly hub. 5 rooms @ £500 PCM is conservative for a modernized 5-bed HMO with high-speed broadband and utilities included.

Licensing & Compliance

Planning: The property is currently C3. Conversion to 5+ person HMO requires Planning Permission for C4 use class in Article 4 zones. Ensure planning risk is managed.

Property & Layout Analysis

Bed 1 (Master)
13.6m² - Pass
Bed 2
12.9m² - Pass
Bed 3
6.4m² - FAIL (National Min 6.51m²)
Bed 4
6.2m² - FAIL (National Min 6.51m²)

Capacity & Layout Options:

Option 1: 3-Bed
Safe/Low
Option 2: 4-Bed
Recommended
Option 3: 5-Bed
Max Profit

Max Compliant Occupant Count: 5 (Requires structural changes to Bedroom 3/4 and Living Room conversion).

Refurbishment Plan

Standard: Medium (Professional/Student Grade). Focus on fire safety (FD30s) and soundproofing floors.

Kitchen/Diner/Lounge Upgrade£8,000
Partition Walls & Bed 3/4 Resize£6,000
Fire Safety (Interlinked Alarms/FD30s)£4,000
En-suite/Bathrooms (2x)£12,000
Total Refurb Cost£40,000

Timeline:

Weeks: 10 || Months: 2.5

Phase 1 (Structural)
4 wks
Phase 2 (1st Fix)
2 wks
Phase 3 (Finish)
4 wks

Negotiation Points

Undersized Bedrooms: Bedroom 3 & 4 fall below the 6.51m² threshold, rendering them legally unusable as single bedrooms without structural work. Price down potential: High (Probability: 85).
EPC Band: EPC is likely E or low D, requiring potential insulation upgrades for HMO compliance. Price down potential: Medium (Probability: 60).
Garage Condition: Garage is currently uninsulated storage; useful footprint. Price down potential: Low (Probability: 40).

Investment Case Summary

Short Recommendation

Proceed, provided structural resizing of bedrooms 3 and 4 is factored into the budget. The yield uplift from a 5-bed HMO justifies the initial capital outlay.

Detailed Recommendation

This property is a classic "HMO conversion play." By optimizing the floorplan and converting the massive living room into a master bedroom, you maximize yield. You must address the legal space requirements for Bed 3 & 4 immediately. Do not attempt to rent as-is; it fails national standards. With proper fire safety compliance and a professional finish, this will command the top end of the Caerphilly rental market.

Financial Metrics

ROCE8.4%
Gross Yield7.9%
Net Yield5.1%
Monthly Cash Flow£562.50
Annual Cash Flow£6,750.00