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£25k Reduction – 7 Bed HMO in Derbyshire

Fully tenanted generating £2,578 pcm and a gross yield of 12.4%.
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Key Features

  • 7 bed HMO
  • All en-suite rooms
  • Excellent condition
  • 31.1% net ROCI
  • 12.4% gross yield
  • Excellent location, road/rail links

The Property


Sourced are pleased to offer this 7-bed HMO, each room with en-suite, located in Ilkeston, Derbyshire.

The property is freehold on a single title originally being converted from two adjacent Victorian properties.

It is in good condition, gas central heated and is on a single meter with all bills included in the rent of £85.00 per room per month (not increased for the past 5 years).

Fully tenanted the property was returning £2,578 pcm, producing a gross yield of 12.4% based on a purchase price of £250,000 inclusive of sourcing fee.

If purchased on a mortgage, with a 25% deposit, you could achieve 31.1% ROCI.

The HMO licence was effective from 18th May 2020 and was for 5 years, issued by Erewash Borough Council.

The property comprises of:

Ground floor
Entrance hall (3.63 m2) leading to:
Kitchen (12.69 m2)
Bedroom 1 (8.58 m2) with en-suite (2.02 m2)
Bedroom 2 (10.09 m2) with en-suite (3.85 m2)
Bedroom 3 (9.53) with en-suite (2.15 m2)
Stairs to:

First Floor:
Landing (8.15 m2)
Bedroom 4 (8.54 m2) with en-suite (2.01 m2)
Bedroom 5 (9.19 m2) with en-suite (3.19 m2)
Bedroom 6 (10.68 m2) with en-suite (3.14 m2)
Bedroom 7 (10.99 m2) with en-suite (1.82 m2)

All measurements approximate.

The property is located in Ilkeston Derbyshire and is half-way between Nottingham & Derby.

There is parking outside of the property and on adjacent streets. There is a bus stop nearby and a Tesco supermarket in close proximity.

It is a very short walk into the town centre where there is also a Morrisons and Asda plus many local amenities including cafes and restaurants.

Ilkeston has excellent access with main trunk roads to Derby and Nottingham (A52) and many inner suburban routes providing access to many of the adjacent towns in the vicinity.

Having had the benefit of infrastructure investment over recent years, Ilkeston boasts a wealth of opportunities for the discerning investor. The recent re-opening of Ilkeston railway station provides great opportunities to travel directly into Nottingham and northbound to Sheffield.

There are also to services to Liverpool and East Anglia along with a short journey to the proposed HS2 hub at Toton, Sandiacre.

Ilkeston has easy access to a plethora of local industries, short commutes to both Nottingham and Derby including: two major universities, two internationally renowned hospitals, Rolls-Royce, Bombardier, IT centres of excellence plus much more.

Sourcing fee = 2%
Stamp Duty Estimate prior to 31st March 2021 – £7,500 (3% for additional property if applicable)

Any interested parties should conduct their own due diligence.

Yield and ROCI illustration is based on the following:

Working on a purchase price of £250,000:

Gross yield figure of 12.4% equates to £30,936 annual rent divided by purchase price of £250,000.

ROCI illustration is based on:
Purchase price of £250,000 @ 25% deposit = £62,500 + £7,500 (SDLT) + £5,000 (Sourcing Fee) = £75,000
Annual rent - £30,936 pa
Utilities/Insurance - £ 4,601 pa
Mortgage 2 year discount @ 1.59% (Mortgage Works) £2,976 pa
£30,936 - £4,601 - £2,976 = £23,359
£23,359 divided by £75,000 (deposit and fees) = 31.1%

Planning Information

HMO license granted, effective 18th May 2020 for 5 years.

The Plan


7-bed HMO available to purchase.

The Financials:

Reduced price: £250,000
Was: £275,000
Sourcing fee: £5,000
Rental income: £30,936 pa
ROCI: 31.1%
Gross yield: 12.4%

The Location

Ilkeston is a town within the Borough of Erewash in Derbyshire. It is situated adjacent to the River Erewash and has a population in excess of 39,000.

Ilkeston is located between Derby and Nottingham and is very close to the M1 motorway and the Notts border.

With easy road links to both Derby and Nottingham, Ilkeston boasts a recently re-instated rail link to Nottingham and Sheffield which also provides direct service to East Anglia and Liverpool.

Average estimated value for a house in DE7 5AB