Property Description: 

This property presents an exciting investment opportunity for savvy investors. Located in Port Talbot, this three-bedroom home stands out as the “worst house on a great street.” With a purchase price significantly lower than the market average in the area, this home offers substantial potential for renovation and value appreciation.

Area Overview

Port Talbot is an emerging area with a vibrant community and strong rental demand. The property is conveniently located within walking distance of local schools, making it appealing for families. It is also a short drive from major transport links, including the M4 motorway, facilitating easy commutes to Swansea and Cardiff. This accessibility is ideal for professionals seeking a suburban lifestyle with urban convenience.

Investment Potential

The local market shows promising trends. Comparable sales in the area hover around £230,000, which justifies the end value of this property post-renovation. With the right improvements, this house could easily reach that sales figure, offering a healthy return on investment. The demand for rental properties in Port Talbot remains strong, driven by a mix of professionals and families looking for affordable housing options.

Exit Strategies

Exit Strategy 1: Renovation and Profit

• Renovation Costs: £57,650

• Projected Sale Price: £230,000

• Expected Profit: £36,000

This strategy involves renovating the property for £57,650, enhancing its appeal and market value. Upon completion, the property can be sold for approximately £230,000, yielding a profit of £36,000. This straightforward approach allows for a quicker return on investment, making it ideal for those looking to flip the property.

Exit Strategy 2: Conversion to HMO

• Renovation Costs: £75,000 (including upgrades for HMO compliance)

• Monthly Cash Flow: £700 per room for a 5-bedroom HMO

The second strategy involves a more extensive renovation costing £75,000, converting the property into a 5-bedroom House in Multiple Occupation (HMO). This setup can generate a monthly cash flow of £700 (£4500 per room), providing stable, ongoing income. This strategy is particularly attractive for long-term investors looking for consistent cash flow rather than a quick sale.

Local Regeneration Schemes

Port Talbot is currently undergoing various regeneration schemes aimed at enhancing local infrastructure and amenities. These improvements will boost property values and attract more residents to the area, further solidifying your investment.

Conclusion

In summary, this is not just a property; it’s a strategic investment opportunity. With the right vision and effort, this house can transform into a lucrative asset in a thriving community. Don’t miss the chance to invest in a property that promises both immediate and long-term returns.

Number of Bedrooms (current): 3

Is there potential to add a bedroom?: Yes, can be converted into a 5 bedroom HMO

Reception Rooms: 2

Bathrooms/shower-rooms: 1

Property Asking Price: £130000

Agreed Sale Price: £120,000

Fair Market Value (DUV): £230,000

Comparable 1: Sold £230,000: https://www.rightmove.co.uk/house-prices/details/england-133447709-19744996?s=9086679fc99b1a4c1bd041d0cb7003998a19ff6c398baae8882cec7591c71984

Comparable 2: Sold £198,000: https://www.rightmove.co.uk/house-prices/details/england-144195851-21505639?s=436e7f1d9cc0c352155b3847fecab49076e25438f069dfa2d254bbfa921ab41c

Comparable 3: Sold £241,000: https://www.rightmove.co.uk/house-prices/details/england-139612775-20705614?s=5d8764712c91ef71482ac1430d1b6e4c26a687a9d040aec3a29f688ee711db59

Comparable 4: Sold £267,000: https://www.rightmove.co.uk/house-prices/details/england-55828641-20966566?s=35a067d7fd960287d909049c5011ab2d4d70be89c59c427c13bccbc01dcc577e

Comparable 5: Sold £217,000: https://www.rightmove.co.uk/house-prices/details/england-19744990?s=e9a15c7342cc3f35598132bd149718b4cd161d5be21c92444c023e563de56836

Comparable 5: Sold £186,000 (Same street and needed renovation!): https://www.rightmove.co.uk/house-prices/details/england-18867343-19086226?s=2859dd8f49905b95d7bfce35b9f5243a10416592294e928b0b5dceed03121fba

Market Status: on the market

Why is the property being sold?: Distressed Seller

Is the property in a lettable condition: No

Is the sale price negotiable?: No

Property Type: House

Freehold or Leasehold: Freehold

Is the property part of portfolio?: Unknown

Exit Strategy 1: Cash Purchase Flip (or bridge)

Exit Strategy 2: BTL

Exit Strategy 3: Multi-let / HMO

If HMO strategy please select: Property is NOT in any article 4 area and does not currently have an HMO licence from local authority.  Investor needs to apply.

Potential Target Demographic: Families for flip and professionals for HMO

Refurbishments Required for a flip deal. 12-Week Renovation Schedule

Week 1: Initial Setup and Demolition
Obtain necessary permits.
Conduct a thorough inspection and finalise renovation plans.
Begin rip-out process: remove old fixtures and fittings.
Waste removal of debris from the site.

Week 2: Structural Works
Roof works: repair or replace as needed.
Begin damp proofing to prevent moisture issues.

Week 3: Windows and Doors
Install new windows and doors for improved insulation and security.

Week 4: Electrical Work
Electrical re-wiring: update the electrical system for safety and efficiency.

Week 5: Plumbing and Heating
Install plumbing and heating systems, including radiators.

Week 6: Interior Preparation
Boarding and plaster preparation for walls and ceilings.
Start plastering the main areas.

Week 7: Kitchen Installation
Supply and fit kitchen units and appliances.

Week 8: Bathroom Renovation
Supply and fit the main bathroom fixtures.
Install downstairs WC as planned.

Week 9: Woodwork and Carpentry
Complete woodwork, including doors, skirting boards, and any additional carpentry.

Week 10: Painting and Decorating
Paint and decorate all renovated areas.

Week 11: Flooring Installation
Install carpet and flooring throughout the property.

Week 12: Final Touches and Curb Appeal
Complete garden budget: landscaping and garden improvements.
Work on curb appeal enhancements (front yard, façade).
Conduct final inspections and address any outstanding issues.

Estimated Refurbishment Costs: £57,650 (This includes 10% fees for renovation management by our dedicated project manager)

(For this property to be converted into a 5 bedroom professional let quality HMO we estimate a renovation schedule costing £75,000. This is based on adding ensuite bathrooms and meeting the quality HMO regulations.)

Flip Figures

Purchase Price: £120,000

Refurb Costs: £57,650

Entry Legal Costs: £1800

Exit Legal Costs: £1000

Stamp Duty: £6000

Survey Costs: £450

Tiger Burrows Consultation Fee: £3497

Estimated 6 months bills costs: £750

Estate Agent Selling Fees: £2500 (+ VAT)

Total Costs for investor: £193,647

Re-sale price (DUV): £230,000

Estimated Flip Profit: £36,353

HMO Figures

Purchase Price: £120,000

Refurb Costs: £75000 (to be a 5 bedroom HMO)

Legal Costs: £2600 (which includes £800 for planning and professional fees)

Stamp Duty: £6000

Survey: £450

Tiger Burrows Consultation Fee's: £3497

Estimated Rental Income: £2250 (£450 per room)

New Mortgage: £718.75

Stress Test Mortgage: £862.50

Estate Agent Rates: £323 (at 17% rates for a HMO management)

MOE: £450 (to include utilities and broadband)

Cash Flow Most Likely: £698 (5% mortgage rates)

Cash Flow Stress Test: £555 (6% Mortgage Rates)