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Deal WizardHMO · Property Analysis
3 bedroom end of terrace house
Address: Rugeley Avenue, Willenhall, West Midlands, WV12Price: £160,0003 Bedroom(s)1 Bathroom(s)Analysis Date: Jul 21, 2026
ROCE: 38.2 %Tenure Type: FREEHOLDProperty Type: Semi DetachedSize: 900 sq ft / 83.6 m²Risk: MediumProject Time: 8 weeks

HMO Investment Analysis: WV12 5LB

Strategy: 5-Bed HMO Conversion. Projecting high demand due to location proximity to Willenhall/Walsall employment hubs.

Executive Summary

This 3-bedroom semi-detached property offers significant potential for a high-yielding 5-bedroom HMO conversion. The existing floor plan is underutilized, with a large utility and living room that can be reconfigured to add two additional bedrooms. The location in Willenhall (WV12) is supported by solid rental comparables, with demand driven by proximity to Wolverhampton and Walsall transport links. While the property requires a comprehensive refurb (fire safety, layout reconfiguration, en-suite installations), the projected yield is strong for this price point.

Acquisition Overview

Purchase Price
£160,000
Est. Refurb
£50,000
Total Investment
£210,000
Target Yield
11.8%

Projected Rental Income (Post-Refurb)

Avg Room Rent
£550
Rooms
5
Monthly Gross
£2,750

Rent estimated based on comparable ensuite rooms in the WV12/WS area averaging £500-£650pcm.

Projected Cashflow & Returns

ROCE
38.2%
Gross Yield
20.6%
Net Yield
11.8%
Monthly Cashflow
£1,462.50
Interpretation: These KPIs demonstrate a highly viable HMO strategy. The high gross yield is sustained by the addition of two extra rooms.

Licensing & Compliance

Assumption: 5 occupants sharing will trigger Mandatory Licensing. Budget £1,000-£1,500 for licensing costs.

Amenity Standards Check (5-Bed HMO):

Property & Layout Analysis

Bedroom 1 (FF)
12.2m²
Pass
Bedroom 2 (FF)
11.0m²
Pass
Bedroom 3 (FF)
5.5m²
Fail - Reconfigure
Bedroom 4 (GF)
9.0m² (from Living)
Pass
Bedroom 5 (GF)
12.6m² (from Utility)
Pass

Max Compliant Occupant Count: 5. Recommended Layout: 5 En-suite rooms.

Refurbishment Plan

Refurb Breakdown:

Full Fire Safety (Doors, Alarms)£8,000
Kitchen/Utility Reconfig£12,000
En-suite Installation (x3)£15,000
Flooring & Decoration£7,000
Electrical & Heating Upgrades£5,000
Furniture & Staging£3,000
Total Estimated Cost£50,000

Timeline:

Weeks: 8 || Months: 2

Phase 1: Planning & Strip Out (2 weeks)
Phase 2: First Fix Plumbing/Electrics & Partitioning (2 weeks)
Phase 3: Fire Safety & Bathroom Installs (2 weeks)
Phase 4: Finishings & Furnishing (2 weeks)

Negotiation Points

Condition & Refurbishment Needs
Water stains visible on the living room ceiling (indicative of potential leak).
Probability: 80
Bedroom Size
Bedroom 3 is below national minimums. Negotiate based on cost to rectify space.
Probability: 60
Coal Mining Proximity
The agent mentioned 20m proximity. Use this as a major price reduction lever.
Probability: 75

Investment Case Summary

Short Recommendation

Strong HMO project. The property layout is perfect for conversion. Use the coal mining proximity and bedroom 3 size constraints to negotiate the purchase price below £150k to boost ROCE significantly.

Detailed Recommendation

The Rugeley Avenue property is an ideal candidate for a 5-bedroom HMO project. By sacrificing the large ground floor living space and utility room, we can create two additional bedrooms while maintaining 3 existing rooms. The property is currently undervalued given its footprint. The key risk is the "Coal Mine" proximity, which warrants a thorough survey. However, the financial fundamentals—specifically the ability to achieve a 20%+ gross yield—outweigh the moderate structural risks. The conversion should focus on high-quality en-suite rooms, which command the highest rents in the WV12 market. If you can secure this property at a discount, it is a high-conviction buy.

ROCE38.2%
Gross Yield20.6%
Net Yield11.8%
Monthly Cashflow£1,462.50
Annual Net Cashflow£17,550.00