Photo by Dragon Property
After more than 15 years of experience in HMO investment, one of the most valuable aspects of my investment journey has been learning from others’ experiences.
That’s the beauty of case studies as they can help us see how fellow HMO investors have transformed properties, made deals work and overcome challenges.
As the founder of The HMO Roadmap, host of The HMO Podcast and having established The HMO Community, I’ve come across tons of incredible case studies including some of the very best HMOs across the UK.
Through that, I’ve learned so much that I’ve been able to apply into my own HMO portfolio, and here I’ll share three of my favourite community case studies that I think you’ll find as inspiring as I did.
Derelict house transformed into impressive six-bed HMO
Magdalena, CEO and founder of Urban Island Property, specialises in converting tired properties into modern co-living homes that enhance wellbeing, promote sustainability and incorporate technology.
Last year she transformed a derelict three-bedroom, one-bathroom property into a design-led six-bedroom HMO with five bathrooms for young professionals in Greater Manchester. The design incorporated natural colours, textures and arches with the conversion taking six months.
This project stood out because it didn’t involve extensions or loft conversions, but Magdalena still managed to completely reimagine the space. The extensive structural work included removing chimney breasts and reconfiguring the layout to create an open-plan living room and rooms of sufficient size.
The house was brought back to brick and structurally strengthened with all electrical, plumbing and heating systems re-created. The walls were insulated, boarded and plastered, and all windows and doors were replaced, helping raise the EPC rating from D to C.
She completed the project just before Christmas, which is usually the most difficult period to find tenants, but she managed to fill five out of the six rooms in record time at top market rents before the holiday – an impressive achievement!
Purchasing the property for £155k and spending nearly £141k on the refurbishment, Magdalena has added about £55k in equity. At the back end, she earned an impressive 28% return on capital employed and £11,500 in net cash flow per year. This case study really shows what’s possible when you focus on quality and sustainability.
Disused office block converted into modern 12-bed HMO
Adam, Tara and Gareth of Dragon Property specialise in larger-scale HMOs, and this project caught my attention because of its scale and transformation. They undertook the metamorphosis of an old office block in Eastbourne into a modern professional HMO of nine studios and three en-suite rooms.
I love seeing projects where commercial spaces get a new lease of life. With this one, planning approval went smoothly, and the conversion took eight months.
Dragon Property fully stripped the building back to brick with only the floor joists, floorboards, external walls, some internal walls and the roof kept. Everything else was upgraded or replaced including rewiring, replumbing, insulating, soundproofing, installing plasterboards and re-skimming throughout the property.
Impressive new woodwork and ironmongery were also installed, and a fresh coat of paint brightened up the spaces. The bathrooms and kitchens were kitted out with modern fittings, and new flooring was laid down.
They encountered a few unforeseen challenges, including having to replace all the windows and fix a leaky roof, but they handled it without blowing their budget or timeline.
Dragon Property purchased the property for £590k with the refurbishment costing over £290k. The conversion added nearly £295k in equity, and they secured a whopping 302% return on capital employed, bringing in around £95k in net cash flow annually as well. This is a great example of what’s possible when you think big.
A tired four-bed HMO redesigned into unique rental
Jolly Property, specialising in smaller student HMOs in Sheffield, recently undertook a modern refurbishment to a tired HMO. What I love about this project is that it didn’t require major structural changes, but the impact was still significant, showing small projects can deliver big results when done right.
Purchasing in areas with strict Article 4 directions, husband-and-wife team Jolly and Rebecca buy existing HMOs rather than creating new ones, so they look for properties that’d benefit from being redesigned and reconfigured.
This four-bedroom HMO was a standard refurbishment for them. It wasn’t possible to get a fifth bedroom in, so they focused on adding a new kitchen, bathroom, heating system, flooring and decoration.
The project went smoothly with no unexpected surprises. Jolly Property aimed to get the HMO into the student cycle, but as it completed in March, they had to show students around an unfinished house in February.
However, they were able to secure four students who moved in on 1st July. Additionally, they even managed to fill the property with professionals from 1st April to 30th June.
Buying the property for £220k and spending only £30k on the refurbishment, they added £15k in equity. Jolly Property earned 18% return on capital employed and nearly £11k in net annual cash flow. It’s a great example of how even a modest investment can pay off with the right strategy.
For more insights and inspiration, sign up to the The HMO Roadmap and gain access to 60 detailed case studies. Premium members can also access a library of downloadable resources. Visit thehmoroadmap.co.uk/elearning for more information.
About the Author:
Andy Graham is the founder and the lead trainer at The HMO Roadmap! He is also the co-founder of The HMO Mastermind, writes as a regular columnist in different magazines about a variety of HMO topics and is the host of The HMO Podcast! Follow Andy on Instagram!