FLIP · Property AnalysisThis report provides a comprehensive analysis of the property at City Road, Sheffield, South Yorkshire, S2, focusing on its flip potential. The analysis includes market valuation, refurbishment strategies, risk assessment, and financial projections, aiming to guide potential investors towards a profitable outcome.
This 3-bedroom terraced house requires a full renovation, offering significant value-add potential. The estimated refurbishment cost is £37,500, leading to an After Refurbishment Value (ARV) of £185,000. With a total investment of approximately £126,575, the projected Net Profit is £58,425, resulting in an impressive ROI of 46.2%. Key risks include accurate ARV assessment and managing renovation costs, particularly due to identified damp issues. The seller's motivation and chain-free status present a good opportunity for negotiation. This property represents a strong flip candidate if managed diligently.
The property is a 3-bedroom terraced house located in Sheffield S2, an area with consistent demand for affordable housing and rental properties. Currently in need of full renovation, its potential lies in transforming it into a modern, desirable home. Based on comparable sales of similarly sized properties in the S2 area that have undergone full refurbishment, we estimate the After Refurbishment Value (ARV) to be £185,000. Recent sales of 3-bedroom terraced houses in the vicinity range from £130,000 to £205,000 for well-renovated properties. Our ARV estimate of £185,000 is achievable with a high-quality, pragmatic renovation focusing on kitchen, bathroom, electrics, plumbing, and cosmetic finishes, addressing the current 'unmodernised' state. The identified damp issues will require professional remediation, which, while adding cost, is essential for achieving the target ARV and ensuring long-term property integrity. The 1000 sq ft internal area with three bedrooms and a single bathroom provides a solid foundation for this value uplift.
Note: Total Project Cost includes Purchase Price, Renovation, Buying & Selling Fees, and Holding Costs. ROI calculated as Gross Profit / Total Project Cost.
Sheffield's property market, particularly in S2, generally shows steady demand. While rapid price appreciation is not always typical, well-renovated properties in desirable locations tend to hold their value and appreciate modestly. The key for a flip is creating a desirable product that sells efficiently at the target ARV rather than relying heavily on market appreciation during the holding period. Our projected ARV assumes current market conditions with an allowance for typical transaction timeframes.
The listing strategy ("Offers in Excess of £80,000", "Chain Free!") strongly indicates a motivated seller. This suggests they are likely seeking a quick and straightforward sale. The property's "full renovation" requirement further supports this, as it may appeal more to investors or cash buyers who can act swiftly. This situation presents a prime opportunity to negotiate the purchase price down, potentially securing the property below the initial asking price.
This investment is categorised as Medium-High Risk. While the potential ROI is attractive, the property requires significant renovation, introducing risks related to cost overruns, project delays, and the accurate achievement of the ARV. Identified damp issues necessitate careful assessment and remediation, which could increase costs. The market for renovated properties at the target ARV is competitive, requiring efficient marketing and sales execution.
Adding a fourth bedroom to this 3-storey terraced property is considered **highly impractical and not recommended** for a flip strategy. The existing layout, particularly the bathroom on the first floor and the room configuration on the second floor, does not lend itself easily to creating a new, functional bedroom without substantial and costly structural alterations, such as reconfiguring the existing layout significantly or potentially extending. Such works would far exceed the scope of a typical flip renovation, adding significant cost and risk without a guaranteed uplift commensurate with the expenditure. The current 3-bedroom configuration is standard for this type of property.
The primary negotiation lever is the property's condition requiring a full renovation, coupled with the identified damp issues which will undoubtedly increase the buyer's refurbishment costs. The asking price strategy also suggests room for manoeuvre. Aim to acquire the property for £70,000 - £75,000 to optimise the profit margin and ROI.
The refurbishment will focus on transforming the property into a modern, saleable 3-bedroom home, addressing all essential areas. The approach is pragmatic mid-range, prioritising quality finishes that maximise appeal without overspending. Key focus areas include:
Recommended for flip. This 3-bed terraced house requires full renovation but offers strong potential. With a projected ROI of 54.8%, an ARV of £185,000, and an estimated gross profit of £65,500, this is a viable project if managed efficiently, especially considering the motivated seller and negotiation potential.
The property at City Road, Sheffield S2, presents a compelling flip opportunity. Its purchase price of £80,000, combined with a comprehensive renovation plan costing an estimated £37,500, positions it for an After Refurbishment Value (ARV) of £185,000. The total project cost, including acquisition, renovation, buying, selling, and holding costs, amounts to approximately £119,500, yielding a projected gross profit of £65,500 and an ROI of 54.8%. The property's current state of full renovation, evident damp issues (particularly in the kitchen), and the need for electrical and plumbing upgrades are significant factors that have been incorporated into the refurbishment budget and risk assessment. The identified damp provides leverage for price negotiation, with a target purchase price between £70,000 and £75,000 recommended. The "Chain Free" status and "Offers in Excess" pricing suggest seller motivation, further strengthening the negotiation position. While the risk level is assessed as Medium-High (75/100) due to the renovation scope and potential for unforeseen issues, the robust projected returns, coupled with diligent project management and cost control, make this a potentially lucrative investment. The property is not suitable for adding an additional bedroom due to layout constraints and cost implications. The 1000 sq ft internal area is adequate for a 3-bedroom, 1-bathroom configuration after renovation. Careful management of the refurbishment process and a swift exit strategy are crucial for realising the full profit potential.