This document seeks to set out the Particulars of Sale of Three Sharp Arrows Ltd which trades under the franchise brand ROOMS®.
The business has been operating for fifteen years, and is the founding business of a growing Franchise Network, now with nine operators. Tunbridge Wells ROOMS® is an established business operator in the town and has had a High Street office for thirteen years, building a good reputation among renters, their employers, local landlords and other property professionals in the town.
Three Sharp Arrows Ltd, trading as ROOMS® operates a franchise business managing high yield, residential house shares, or HMO’s (house in multiple occupation) in Tunbridge Wells.
The ROOMS® business model is defined by leveraging expertise in the investment, development and management of HMO’s to enable landlord investors to enjoy a completely hands free, premium rental yield, secured by way of a commercial lease, and net of almost all costs.
Landlords can relax, safe in the knowledge that their properties are well maintained and compliantly managed, with an attractive yield which is unaffected by the day to day trading risks inherent in the market place. While many agents and landlords dabble in HMO management, ROOMS® are specialists, offering renters a compelling offering of well presented and professionally managed accommodation at an attractive price point.
The ROOMS® brand supports setting and maintaining high standards in HMO delivery and management which aligns well with the Political tide of change, demanding the professionalisation of the Private Rental Sector; a change required in the HMO sector more than any. As the compliance obligations become more onerous for the small scale landlord, ROOMS® is well positioned to take advantage of opportunities and provide Landlords with the expert help they need to meet their legal obligations. HMO management is very different from other parts of the Buy to Let market; the operational risks are known and tried and tested mitigation strategies which enable ROOMS® operators to secure themselves a heathy margin while offering an attractive value proposition to Landlords.
The business operates day to day by paying rent to its Landlords, secured on a commercial lease and renting out each room in the property, as fully furnished accommodation with all bills included in the rent.
In addition to rent paid to landlords, the business covers the operating costs of the HMO’s which include: Gas & electricity, council tax, broadband & TV licence, regular cleaning of communal areas, gardening, and maintenance costs up to an annual budget of £500.00 per property. Internal painting and decorating is maintained in addition to this budget.
Profit is generated by the margin between the rents collected and rent paid along with other operational costs. In some instances a property may already be set up as an HMO, while in other cases, it will be converted from a single let into an HMO.
Compliance requirements which are met by the business fall into two categories and are as follows:
Property:
General health & safety and amenity standards as set out by Environmental Health and HMO licence conditions; fire safety, electrical safety and gas safety.
Tenancies:
Right to rent checks, serving of correct documentation at point of granting tenancies, protection of deposits and serving certificates & prescribed information.
A fully prepared set of sale particulars including financial information is available for consideration however as this is a confidential sale we will require an NDA which we can provide upon request.
The valuation of the business is based upon the five times profit calculation based on the trading figures for 31/03/2024 accounts, reflecting the proven, low risk track record of the business, which benefits from the following:
Low time input requirement from the owner
Long term relationships and contracts with it’s landlords
Established good will within the business
A strong and well defined brand
There is a Franchise Fee of £12,000 which is payable in addition to the asking price.
