A rare chance to acquire or joint-venture on a fully operational 5-bedroom HMO in Greater Manchester's tightly regulated Article 4 area. Three remodelling options deliver returns from 29.92% to infinite ROI, with clear exit strategies backed by comparable market evidence.
Current Asset Overview
This Article 4 designated property presents a strategic advantage in a restricted licensing area. The existing 5-bedroom configuration is fully tenanted, providing immediate cash flow whilst you evaluate development options.
- 5 double bedrooms (no ensuites)
- Kitchen-diner configuration
- 2 shared bathrooms
- 100% occupancy at acquisition
- Article 4 licensing secured
Professional assessment
All doubles
Each option transforms the property into a premium all-ensuite HMO, dramatically increasing both capital value and rental yield. The progressively larger configurations unlock exponentially better returns through intelligent space optimisation.
6-bed all-ensuite remodel
7-bed all-ensuite better returns
9-bed all-ensuite maximising the properties potential
This remodelling approach adds one bedroom whilst converting all other rooms to ensuite specification. This delivers a near-30% return on investment with no planning risk and is straightforward.
The £359,100 gross development value represents a 52.8% uplift on current valuation, supported by comparable sales evidence in the immediate area.
£95,850 construction budget
£61,525 net invested capital
£18,041 net PA income
This approach adds two more ensuit bedrooms, delivering a substantial 53.56% ROI. This configuration optimises the existing footprint, but increases build costs to £115,850.
£415,800
76.9% increase on current value
£39,000
After refinancing
£20,889
After costs
Nearly double Option A's returns
This configuration unlocks the property's maximum potential, delivering infinite returns. By adding 4 ensuite bedrooms, the £541,013 GDV enables complete capital extraction through refinancing—leaving no cash invested whilst generating £27,179 annual net income.
This exceptional outcome results from maximising legitimate room density, creating premium accommodation that commands higher rents whilst spreading operational costs across more units.
Zero cash left in deal
Capital uplift secured
Gross Development Value
130% increase on purchase price
Gross Annual Income
Premium rental rates achieved
Net Annual Income
After full operational expenses
A directly comparable 6-bedroom, 6-bathroom HMO in the same Greater Manchester area is currently listed at £360,000 on Rightmove, validating our £359,100 GDV for Option A.
This active market listing demonstrates strong buyer appetite for premium HMO stock in Article 4 areas, providing confidence in achieving projected valuations across all three options.
The progression from Option A to Option C demonstrates how intelligent density optimisation within regulatory frameworks unlocks exponential returns. Whilst Option A delivers solid performance, Option C's ability to extract all invested capital whilst maintaining strong annual income represents exceptional value creation.
Note: Option C ROI shown as 100% for chart scaling purposes; actual ROI is infinite due to full capital extraction.
Review detailed specifications, planning considerations, and structure joint-venture terms or outright sale
Inspect property, verify tenancies, confirm Article 4 licensing status, and validate development feasibility
Agree preferred option, finalise build budget, secure development finance, and establish profit-share arrangements
Complete acquisition, commence works and achieve target GDV through refinancing or sale
This Article 4 HMO represents a rare opportunity in a supply-constrained market. Whether pursuing joint-venture partnership or outright acquisition, all three options deliver compelling returns backed by robust market evidence and proven development methodologies.
Ready to explore this premium HMO investment opportunity further? We're here to answer your questions and discuss how we can partner to achieve exceptional returns.
0333 822 0011
info@thehmogodfather.com
www.thehmogodfather.com