HMO is one of UK highest demand areas Newport

sold out

HMO is one of UK highest demand areas Newport


Reserve this investment opportunity for £499

Figures in Brief:
Sale Agreed at: £ 91,000
Estimated Done Up Value: £155,000
1st exit: Flip Profit: £11,408
2nd exit: Cash Flow (BTL): £752.94

Property Information:  This is a 2 bed mid terrace based about a mile from the city centre and 1.8 miles from the train station. Also on a bus route.
However, the property's main strength is that it is located less than a mile from the Royal Gwent Hospital (5 mins in car, 15 mins on foot) and it has the potential to be converted from a 2 bed mid terrace into a 4 bed HMO.

Subject to licence and planning, building regs. The council offer a pre-licensing service for £200:
More info here:

Licensing standards are listed here:
New Licensing rules in Newport as of 1st July 2019:
It's not easy to see from the photos as the house was tenanted when I first viewed it - but the last 4 photos show the empty property as it is now since the tenants moved out. I also have a floor plan.

The property is of generous proportions and benefits from a large double storey extension at the rear. Walk through the front door into hallway and turn left into the lounge where there is a large window and fire place. Stairs run through the middle of the property. Walk straight on into the dining room where there is a large window, fire place and large walk in cupboard (under the stairs). From there the kitchen is accessed through the double storey extension. The kitchen is of a good size.
The back door to the garden is in the ktichen. The garden is also a good size and has recently been cleared out by the current owner.

From the stairs, go up to the landing and access bed 1, which has two windows overlooking the front of the house, then from the landing there is access to bed 2 which has a large airing cupboard. Then from the landing there is a corridor which runs to the bathroom which is housed in the double storey extension. The bathroom is very large.

How to add value to this house:

Move the stairs - put them up against the right hand wall with access from hallway.
The benefit of doing this means there will be extra room in the dining room. There will also be a lot more space upstairs.
Move the bathroom out of the double storey extension and make this into bedroom 3, then the bathroom moves into half of bedroom 2, add new stud wall, then split the remaining space plus two windows into beds 1 and 2. This will provide 3 double bedrooms.
Then turn the lounge into bed 4.

The property can then become a 4 bed HMO targeting professionals workers in the area. Also ideally placed for workers at the Royal Gwent Hospital.

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Property Information

Property Address: Baldwin Street, Newport

Number of Bedrooms (current): 2

Is there potential to add a bedroom?: Yes - add 2 bedrooms to make into HMO!

Reception Rooms: 2

Bathrooms/shower-rooms: 1

Property Asking Price: £100,000 - £110,000

Agreed Sale Price: £91,000

Fair Market Value (DUV): £155,000

Comparable 1: SOLD £155k

Comparable 2: FOR SALE: 4 bed HMO £150k (below average condition) takes £20kpa rent

Comparable 3: SOLD £153.5k

If no comparables, please state why there are no direct comparables: HMO: SOLD £190k 6 bed HMO, £25,200pa potential income (average standard) SOLD £175k (5 bed HMO) for sale, potential 4 bed HMO £197,000 for sale, 5 bed HMO, over £20k pa income

House: SOLD £153k SOLD £159k (with attic room) SOLD £160k SOLD £150k

3 beds@ £94.5k:
2 beds @ £90k:
3 beds @ £120k:
2 beds@ £119k:
3 beds @ £125k:

FOR SALE: 3 beds £165,000 3 beds £150,000 3 beds £150,000 2 beds £155,000 3 beds £155,000 3 beds £158,950 3 beds plus attic room £159,950 3 beds £159,950

Market Status: Sale Secured by Sourcing Agent

Why is the property being sold?: Sale identified by sourcer (pen market)

Is the property in a lettable condition: Yes

Is the sale price negotiable?: No

Property Type: House

Freehold or Leasehold: Freehold

Is the property part of portfolio?: No

Exit Strategy 1: Multi-let / HMO

Exit Strategy 2: Cash Purchase Flip (or bridge)

Exit Strategy 3: Capital Growth

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: Professionals

Refurbishments Required

Refurbishment Costs: Estimated £37,000

Roof Repairs (budget £3k)
Need new Front door, new back door
Paint house on outside
x7 new fencing panels needed
x9 double glazing units needed
Rip out existing
Move the stairs, make good on skim in dining room
Skim downstairs hall and landing area upstairs (where stairs have been moved)
Make good on skirting board
Move the bathroom
Make bedroom 3 - x2 stud walls, skirting, plasterboard and skim
Need new bathroom
Need new kitchen
Skim kitchen
Need new boiler and central heating
Tidy up electrics
Work to HMO standard - fire doors, extinguishers, wired smoke alarm
Paint/Decorate throughout
New flooring

SMP can project manage the renovation for 10% of the build cost

Newport City Council offer a £25,000 interest free loan for up to 3 years on a houses to homes scheme to bring houses back into use.
This property has been empty for 3 months. Properties qualify after 6 months:

Flip Figures (Buy, Renovate, Sell)

Purchase Price: £91,000
Refurb costs: £  37,000
Entry legal costs: £1200
Exit legal costs: £1000
Stamp Duty: £2730

Survey: £450
Broker Fee: £400

SMP Consultation Fee: £ 4997

Estate agent selling fees: £2120

RESALE PRICE: £ 155,000

Profit: £11,408

HMO Figures

Purchase Price: £91,000
Refurb costs: £37,000
Legal costs: £1200
Stamp Duty: £2730

Survey: £ 450
Broker Fee: £400
SMP Consultation Fee: £4997
Rental Income: £1560
New Mortgage (3.5%): £339.06

EA Rate (15%): £234
MOE rate (10%): £234

CASH FLOW: £752.94

Money left in deal £24,221

Money out in 2.7 years  

Disclaimer : Perform your own Due Diligence. The ROI above is not a guaranteed return and is an indication of the potential based on achieving the relevant figures in all aspect of the purchase, refurbishment and refinance/resale. All figures will be subject to the buyers status and market fluctuations.

Area Description:  Newport is a thriving city in South Wales. It covers an area of just over 73.5 square miles and stands at the gateway between England and Wales.
Newport is a vibrant, multi-cultural city steeped in a rich industrial heritage, where traditional industries sit alongside new electronics and financial service sectors
As of the 2011 census, Newport is the third largest city in Wales.
Newport’s history dates back to a Celtic settlement some 2000 years ago.
The city's location at the mouth of the River Usk has attracted visitors for centuries.
Caerleon, just a few miles from Newport, was the site of a fortress of the 2nd (Augustan) Roman legion from the first century AD. The remains of the barracks, bath house and amphitheatre in Caerleon are among the best preserved Roman military sites in Britain.

Wales will benefit from around £1.8bn European Union funding investment between 2014–2020.
In Newport, funding has been gained from the European Social Fund for the Inspire to Work and Inspire to Achieve projects.

Newport is just 90 minutes from London by rail with direct coach services from Heathrow and Gatwick airports and other major centres.
Cardiff and Bristol international airports are within an hour’s drive.
Newport is situated along the M4 corridor just 12 miles from Cardiff and is served by six junctions:
• M4 junction 24 = Coldra
• M4 junction 25 = Caerleon Road
• M4 junction 25A = Grove Park
• M4 junction 26 = Malpas Road
• M4 junction 27 = High Cross
• M4 junction 28 = Tredegar Park

Situated on the main line between Cardiff and London, Newport has direct rail services to Cardiff, Swansea, Manchester, Birmingham, Holyhead, Nottingham, Birmingham, Bristol and London.

Nearby Cwmbran is where the new super hospital is currently being built and opens in spring 2021. The super hospital will create 600 new jobs when it opens so there will be high demand for housing in the area and house prices will inevitably increase in the next 2 years.

It’s currently an investor’s market in this area, so a great chance to grab distressed property and add value whilst the prices are at this level.

Here’s a link to the latest update.

Newport is surrounded by beautiful landscapes including the Wye Valley, an Area of Outstanding Natural Beauty, the undulating Vale of Usk, famous for its salmon fishing, the Brecon Beacons National Park and Forest of Dean – both less than an hour’s drive from Newport.
Newport benefits from holding many festivals over the year attracting much tourism into the area, like the Caerleon festival, Maindee festival and the Newport food festival.

Places to visit
• Newport Medieval Ship
• Public art trail
• St Woolos Cathedral
• Fourteen Locks Canal Centre
• Walk the Newport Explorer trail
• Newport’s theatre and arts centre hosts community events and classes, and has meeting and conference facilities available, as well as drama, dance, comedy and more.
The Dolman Theatre
The Dolman Theatre is owned and run by Newport Playgoers Society. Rooms for meetings, conferences, lectures and rehearsals are also available.
The Newport Centre
The Centre has excellent sporting and leisure facilities and hosts sporting events, live music and theatre. It can also be hired for dinner events, business meetings or children’s parties.

Top ten tourist attractions in Newport:
1. Tredegar House
2. Newport Transporter Bridge
3. Newport Wetlands
4. Caerleon Roman fortress and baths
5. Belle Vue Park
6. Tiny Rebel
7. Newport City Museum and Art Gallery
8. Tredegar House Caravan Park
9. Walnut Tree Farm Park
10. Friars Walk Shopping Centre

There is a wide selection of hotels in and around the city area including:
• Celtic Manor Resort
• Travel Lodge
• Holiday Inn
• Premier Inn
• Lots of independent hotels

Schools within the area:
Newport has two nursery schools, 42 primary schools, nine secondary schools, two special schools and one pupil referral unit.
Within these there are three Welsh-medium primary schools, one Welsh-medium secondary school, six Roman Catholic primary schools, one Roman Catholic secondary school and two Church in Wales primary schools.
A new community-maintained primary school is due to open on the Glan Llyn development from September 2019.
Newport is also home to the University of South Wales, Newport City Campus.
Right at the heart of the city, overlooking the River Usk, is one of the University’s most iconic buildings and it couldn’t be in a better location to embrace city life in Newport. Plus, the Halls of Residence are just a few minutes’ walk away.
Newport Campus is home to a wide range of subject areas. There’s a cafe with Starbucks coffee, students’ Union facilities and study space, with more developments to come.

Newport - 1.8 miles (7 mins in car)

key journey times: Only 2 miles into Newport city centre
less than 1 mile on to the M4. Newport has 6 junctions on the M4
30 miles to Bristol
16 miles to Cardiff
Newport train station - 2.2 miles (7 mins in the car)

Nearest Train Station: Newport - 1.8 miles (7 mins in car)

Any key journey times: Key journey times:
Only 1 mile into Newport city centre (5 mins in car)
less than 3 miles on to the M4 (9 mins in car)
Newport has 6 junctions on the M4
30 miles to Bristol
16 miles to Cardiff
Newport - 1.8 miles (7 mins in car)


The fine Print
SMP operates in trust with its potential investors. SMP is registered with the Property Ombudsman Group. SMP prides itself on delivering BMV deals with accuracy and confidence. The sourcing fee for this deal is £4997(inc VAT) which is paid on completion of the sale. A £499 deposit is required to secure the deal which is refundable if the investor decides not to proceed to an agreed sale with the vendor, ie after viewing. The deposit is not refundable if the investor pulls out of the purchase after sale agreed. 

SMP takes no responsibility if deals “fall through” for matters out of our control. It is always highlighted that property investment carries an element of risk and ultimately a deal may not be successful. There for deal owners are advised to carry out their own due diligence to confirm for themselves the findings SMP present. SMP has no control of the UK property market prices and investments can be lost or profit margins shortened with the fluctuating market