£97K Equity in 6 Months: Our Latest HMO Investment Case Study

The Opportunity: A Neglected Student HMO in a Prime Location

The property in question is a mid-terrace 4-bedroom house situated just off Sharrow Vale Road. This location is a well-known hotspot in Sheffield, offering a lively mix of independent eateries, pubs, coffee shops, and green spaces such as Endcliffe Park. With its close proximity to both Ecclesall Road and the city centre, it’s a magnet for young professionals and students alike.

Previously, the property had operated as a student-let HMO, managed by a local letting agent. However, the out-of-town owner hadn’t visited the property in years, so it was bit neglected and he finally decided to sell in 2023 due to personal circumstances.

While the area had strong fundamentals, the house itself had seen better days. It had been on the market for some time following a previous failed sale. I reached out to the agent to learn more—and what followed was a classic case of being in the right place at the right time.

Pictures are from the original estate agent listing.

The property had previously been under offer, but the sale collapsed when the previous buyer encountered issues with financing. HMOs require specialist mortgage products, and not all lenders are comfortable with these types of investments, especially for inexperienced buyers.

The failed sale created an opening for us. In October 2024, the property was re-listed at £225,000, down from the original £250,000 asking price back in November 2023. I saw a clear opportunity to secure the property at a good price, add value through strategic refurbishment and help the seller to exit from the problem property along the way.

Negotiation & Purchase Process: Turning Insight into Leverage

We conducted thorough due diligence before making an offer. The most critical insight was that the property had operated continuously as an HMO since before Sheffield’s Article 4 Direction was introduced in 2011. This meant we could continue letting the property as an HMO without needing additional planning permission.

With that confidence, we submitted an initial offer of £190,000, reflecting the cost for required works to bring the property up to high lettable standard. The seller, hoping for a better price, was slow to respond. However, given the property’s track record as a student HMO and its location in a predominantly rented area, it was clear the owner-occupier market was limited.

After several rounds of negotiation, we agreed on a final purchase price of £199,000, securing a £51,000 discount from the original listing of £250,000. This outcome was made possible by the trust and rapport I established with both the estate agent and the seller—demonstrating not only our experience in the HMO market but also our ability to move swiftly and decisively, which gave the seller added confidence in our ability to complete the transaction efficiently.

The offer was accepted on 29th January 2025, but we were up against the clock—new stamp duty changes were coming into effect on 1st April, increasing the cost of buying investment properties. We had just two months to complete the transaction—and we made it, completing on 25th March and saving around £2,000 in SDLT in the process. This experience highlighted just how essential it is to have a reliable and proactive team—our mortgage advisor and our solicitors were instrumental in navigating the tight timeline, demonstrating professionalism and commitment to move at pace when it really mattered.

The Refurb: Fast, Focused, and on Budget

With keys in hand, we kicked off a targeted refurbishment programme. Our goal was to modernise the house, improve the tenant experience, and get it back on the market—fast.

Schedule of works:

• Full interior redecoration

• Upgrade lighting throughout

• Install a new boiler and smart thermostat

• Replace bathroom towel radiator

• Fit brand-new mattresses and furniture

We worked to a £7,000 budget and an ambitious 2-week turnaround.

Having a detailed schedule of works and a comprehensive furniture list gave us and our contractors the clarity we needed. Works began on 26th March, and by 6th April, we were done—ahead of schedule!

There were late nights and tight logistics, but strong planning, clear communication, and a trusted contractor team made it all possible. We were very pleased with the end result. 

The Letting: Demand Off the Charts

Even before the works were complete, I began marketing the rooms on several key rental platforms, targeting young working professionals. The response was overwhelming.

We booked over 10 viewings in the first week, and within just a few days of completion, we had tenants lined up. All four rooms were fully let by mid-April, with tenants aligned to our target profile.

The combination of location, great quality property finish and professional approach with tenants proved to be exactly what the market was looking for.

The Numbers That Matter

Here’s a snapshot of the key figures behind the deal:

And here’s the kicker…

According to Zoopla (July 2025), the estimated value of the property is now £296,000—representing a £97,000 uplift in equity. When we come to refinance in 18–24 months, there’s a strong likelihood we’ll be able to pull out all of our initial capital, resulting in an infinite return on investment going forward.

What This Deal Taught Us

This project was more than just numbers. It was a reminder of what makes successful HMO investing possible:

• Speed and clarity are critical—especially when regulations or tax rules change.

• A reliable team of brokers, solicitors, and contractors makes the impossible possible.

• Understanding the local market gives you the confidence to negotiate smartly and let quickly.

• Building genuine relationships with agents and sellers opens doors that numbers alone can’t.

Final Thoughts

This 4-bed HMO in Sheffield wasn’t just a property—it was an opportunity to create value for all parties involved. The seller exited cleanly, the tenants moved into a high-quality home, and we gained a strong cash-flowing asset with capital growth potential.

If you're exploring HMO investment, want to understand the Sheffield market, or simply want to connect with others in the property space—I’m always happy to share insights and lessons learned. Please reach out to me by submitting the below form or by booking 30-minute call with me via Calendly.