How to create a high yielding HMO assets

126 Grosvenor Street, Allenton, Derby, DE24 8AS, UK

The property was originally a three-bedrooms terraced house located very close to two major factories in Derby, Bombardier and Rolls Royce.  We procured the property with an eye on the rental market for workers in these factories.

How the numbers stack up


Property purchased through auction

£ 89,917

Sourcing fee & other costs

£ 17,043

Cost of refurbishment to convert this into a 6 bed HMO 

£ 114,290


£ 221,250


£ 112,780


£ 108,470

Revenue from the property

Rental income for 6 beds per annum

£ 29,640

Less: Costs


£ 4,511

Management charges

£ 3,705

Monthly Operating Expenses

£ 5,928


£ 15,496

Calculation of the Return on Investment (ROI)

ROI = Net Profit ÷ Own Capital  15,496 ÷ 108,470 x 100%


Option to refinance at 70% current valuation £ 161,000 assuming market value of £230,000

Money left in the deal - £60,250 (£221250 - £160000)

Revised ROI = 15,496 ÷ 60,250 x 100%÷


Some of the challenges we faced:

In completing this project, we were faced with a multitude of challenges.  The purchase process itself was a long drawn affair due to the existence of a tenant who wouldn’t vacate and a law firm that was so inefficient that a snail would seem fast in comparison.

Furthermore, the lockdown due to the pandemic not only impacted the time of the completion of the project but also sent the cost of material soaring, due to shortages. Kudos to my business partner and project manager, James Egan, British Living Group, he walked a tight thread between managing costs and ensuring that there was no inadvertent delay.  In circumstances such as these, James is the man you need to have on your side.

All’s well that ends well:

The property now has a great communal area, back garden, well equipped kitchen and en-suite bedrooms, tastefully decorated.

We got encouraging news from a few engineers working in the factories and two of the six bedrooms were rented out in the first few weeks of completion.

We take pride in our ability to identify such properties and turn them into cash flow generating assets for ourselves and our investors.


Property is a proven solid tangible investment. 
While everyone is now investing in the UK, is it GOOD, really?  
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How to create a high yielding HMO assets
Bricks n Mortar Global Properties Ltd. 18 January 2021
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