Case Studies
Transforming Spaces to
Maximise Returns
At Walnut Tree Investments, we specialize in transforming properties to meet diverse housing needs, ranging from premium social housing to luxury HMOs for professionals. Our commitment to delivering exceptional returns is evident in our focus on key performance metrics such as Return on Investment (ROI) and Return on Capital Employed (ROCE).
By prioritizing these metrics, we ensure that each project not only meets but exceeds financial expectations, reflecting our dedication to maximizing value for our clients and stakeholders.
Luxury Co-living HMO
Case study
Portsmouth
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With strong demand for high quality accommodation in the local area, the plan for Telephone Road is to convert the property from a 5 bedroom, 1 ½ bathroom HMO to a 7 bedroom all en-suite luxury co-living HMO.
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Using a local experienced architect has allowed the space in the property to be increased and optimised whilst meeting HMO regulations, and for a smooth planning application which has been granted.
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Large rooms, considered design, and a welcoming communal area will attract professional tenants who will stay longer and look after the property, reducing voids and maintenance costs.
Key Figures
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Purchase price: £332,769
Conversion costs: £259,826
Total costings: £592,595
Post-Development Valuation
Commercial valuation: £661,500
Resale value: £600,000
Financial breakdown
Commercial Mortgage: £511,008
Money left in: £81,587
Equity in property: £88,992
Annual Income
Gross income: £63000
Expected Net income: £12.7k - £17.8k
Expected ROCE
15.6% - 21.8%
Social Housing
Case study
Portsmouth
This property was an existing 5-bedroom HMO in the popular area of Southsea, Portsmouth. Due to article 4 directions restricting new HMO’s, the existing HMO permission meant this property was highly sought after and would continue to hold its value into the future. Purchased with a view to converting to a luxury sui generis HMO with 7 on-suite bedrooms, the property was able to be rented immediately which avoided holding costs during the planning process. The property required light refurbishment upon purchase and was tenanted by the social housing provider within 4 weeks of completion. This strategy allowed for minimal void periods and provided multiple holding and exit options in a dynamic market whilst generating passive cashflow of over £1300 per month and ROCE of 14.7% in addition to capital growth.
Key Figures
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Purchase price: £290,000
Buying ,refurb, other costs: £42,769
Total costings: £332,769
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Financial breakdown
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Mortgage: £225,109*
Money left in: £107,656
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Annual Income
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Gross income: £28,500
Net income: £15,784
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ROCE
14.7%
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*NOTE: product fee £7612 added to mortgage