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Deal WizardHMO · Property Analysis
4 bedroom house for sale in Kohima Road, Colchester, CO2
Address: Kohima Road, ColchesterPrice: £300,0004 Bedroom(s)1 Bathroom(s)Analysis Date: Apr 26, 2026
ROCE: 24.6 %Tenure Type: FREEHOLDProperty Type: HouseCouncil Tax Band: CSize: 0 sq ft / 0 m²Risk: Low-ModerateProject Time: 8 weeks

HMO Investment Analysis: Kohima Road

This property offers a strong potential for a 4-bed professional HMO conversion. Given the purchase price of £300,000 and the requested parameters (FTB status, 40k down), this project relies heavily on a successful refurbishment and efficient management to maximize the rental yields in the Colchester market.

Executive Summary

The subject property is a 4-bedroom terraced residence in CO2. Structurally, it is well-suited for HMO conversion, though Bedroom 3 fails national size standards (3.78m²). The strategy is to convert the ground floor layout to optimize occupancy, focusing on a 4-bedroom configuration that maximizes rent while minimizing management complexity. The property is well-located for hospital/train station commuters, key demographics for local rentals.

Acquisition Overview

Purchase Price
£300,000
Down Payment
£40,000
Est. Refurb Cost
£30,000
Interest Rate
1%
Total Capital
£70,000

Projected Rental Income (Post-Refurb)

Rooms
4
Avg Rent/Room
£625
Monthly Gross Rent
£2,500

Projected Cashflow & Returns

Gross Yield
10.0%
Net Yield
6.8%
Monthly Cash Flow
£1,437
ROCE
24.6%

Licensing & Compliance

Current layout requires Bedroom 3 reconfiguration. It is too small as a bedroom. Suggest creating a high-end storage/home office or utility space.

Property & Layout Analysis

Ground Floor Bed
10.11m² • Pass
Bed 1
11.3m² • Pass
Bed 2
9.69m² • Pass
Bed 3
3.78m² • Fail (Too small)

Max Compliant Occupant Count: 4 occupants (3 upstairs, 1 downstairs). Recommendation: Use Bed 3 as a communal store or expand bathroom.

Refurbishment Plan

Scope: High-Standard Professional HMO

Refurb Breakdown:

Fire Safety (Interlinked alarms, FD30 doors)£4,000
Kitchen/Diner Upgrade£7,000
Bathroom Refurb£4,500
Decorating/Painting throughout£3,500
New Flooring (LVT)£3,000
Furniture Packages£4,000
General Contingency£4,000
Total Estimated Cost£30,000

Shopping List:

Fire Safety & General: 4x FD30 Doors - Cost: £1200 | Interlinked Smoke Alarm Kit - Cost: £300 | Fire Extinguishers/Blanket - Cost: £150 | LED Downlights - Cost: £200 | LVT Flooring (Kitchen/Hall) - Cost: £1200 | Paint/Decor Materials - Cost: £800 | 4x Bed Frames - Cost: £800 | 4x Mattresses - Cost: £1000 | 4x Wardrobes - Cost: £600 | 4x Desks - Cost: £400 | 4x Chairs - Cost: £300 | Kitchen Units - Cost: £2500 | Oven/Hob - Cost: £800 | Bathroom Suite - Cost: £1500 | Door Furniture - Cost: £300

Refurbishment Timeline:

Weeks: 8 || Months: 2

Phase 1: Strip out & First Fix (Plumbing/Electric) || 2 weeks
Phase 2: Plastering & Kitchen Install || 3 weeks
Phase 3: Decorating & Flooring || 2 weeks
Phase 4: Snagging & Furniture Assembly || 1 week

Risk & Negotiation

Risk Level: 20 (Low-Moderate). The main risk is the undersized Bedroom 3 and potential Article 4 planning constraints in Colchester.

Room Size Compliance: Point out Bedroom 3 is non-compliant as a sleeping room. (Prob: 95%)
Refurbishment Scope: Highlight need for comprehensive fire safety upgrades (FD30 doors) which are costly. (Prob: 70%)

Investment Case Summary

Short Recommendation

Buy for long-term hold. The 4-bed configuration is stable and profitable. Negotiation on the small bedroom is key to ensuring budget covers full compliance.

Detailed Recommendation

This property is a strong candidate for an HMO conversion. The layout is manageable, and local demand for professional house shares is high. The key is to avoid Sui Generis classification by keeping to 4-5 occupants and maintaining high-quality communal areas. The use of the ground floor bedroom is a major asset as it allows for an accessible living arrangement. Proceed, but ensure your surveyor verifies load-bearing walls if you intend to merge any spaces.