We’ve long believed at Platinum Property Partners that one of the keys to success in building a profitable portfolio of Houses in Multiple Occupation (HMOs) is always to understand what tenants want and need.
Quality and affordability is high on the list, as is a decent landlord who provides a good service, but not every tenant is the same, and it’s not a ‘one size fits all business.
When Ben Gould, from Gillingham, joined Platinum Property Partners in January 2017, he had a strategy for ensuring he built a diverse portfolio that would attract a variety of tenants.
His first two properties in Bridgewater are both finished to a high standard and feature similar premium and modern interiors and appliances, but that’s where the likeness ends. By buying different types of properties in different locations and changing how he used and maximised the space, Ben has effectively created one house and one home.
Property 1 – The house
Located in the town centre of Bridgewater in Somerset, Ben’s first property was a 4-bedroom semi-detached Victorian house. Having carried out extensive research with his mentor on tenant demand, Ben found that there were a lot of contractors in the area who needed a nice and comfortable place to live for the short-term, with easy access to local amenities.
“The location of this property was perfect,” said Ben. “It had a pub just over the road, the High Street was only a few minutes’ walk away and the bedrooms were very big. I very quickly got excited about how I could create an amazing space for people who were perhaps working away from home Monday to Friday, or on contracts.”
Understanding that such tenants would be less concerned with the social aspect of house-sharing, Ben, with the help of Platinum, decided to maximise the number of bedrooms instead of the communal space. This meant there was no need to build extensions; only reconfiguration and modernisation of the internal space.
Ben added: “As the rooms were so big, we were able to create seven en-suite bedrooms, most of which also accommodated a small sofa area, making the rooms pleasant to spend time in. As such, we didn’t feel the need for a communal living room, and instead created a really nice kitchen with a breakfast bar.”
Unlike typical town centre properties, this was fortunate enough to have ample parking too, meaning those who were travelling down for work from all over the country would have somewhere safe to leave their car. There’s also a small courtyard out the back.
Of course, Ben wasn’t sure if his approach would pay off. He wasn’t keen on focussing on one particular type of tenant, especially for his first HMO, but had also discovered that contractors had the greatest and most urgent need. With this in mind, he approached one of the big employers in the area as part of his advertising strategy and found that they had a relocation department. As a result of forming this relationship and marketing the rooms on SpareRoom, the property was full within two weeks.
Property 2 – The home
With his second property, Ben was determined not to focus on the niche market of contractors and target tenants who were looking for a place they could call home. He needed space, and lots of it, so he cast his net wider and looked to the outskirts of town for a property that might work.
What he found was large 4-bedroom detached property two miles from the centre.
“Built in 1967, this property had been lived in by one family for many years,” said Ben. “It was in a quiet residential area and had a fantastic garden. Upstairs, there were four bedrooms and downstairs there was a detached garage, kitchen, large dining room, lounge and conservatory. There was a lot of space to play with.”
This time round, it was still important for Ben to create large bedrooms, all with en-suite bathrooms, but to also create a big communal area where tenants could become housemates and ultimately, friends. By knocking through one of the upstairs bedrooms, he was able to create three large bedrooms. And downstairs, he reconfigured the space; extended to the rear; replaced the conservatory roof with a permanent tiled roof; and knocked down the garage, rebuilt it twice the length and made it part of the main house.
Ben commented: “This project was much bigger from a build point of view, but also internally to ensure I would be giving tenants what they wanted and needed from a home. A lot of thought was put in to the décor and communal furniture as well as features such as bike storage, a landscaped garden and flat screen TVs. Ensuring privacy was also key, because with a larger HMO, tenants still need their own space, so we created lots of access points directly to bedrooms so that people could come and go without being disturbed.”
Before the property was even finished, four tenants had moved in and they are already cycling together and making each other meals.
Ben concluded: “What I have found is that there are lots of different types of people looking to live in affordable and shared accommodation out there. Their needs and long-term goals are different and so, as well as looking at different types and sizes of properties, I want to be able to cater to a large tenant base. This will give me a balanced portfolio. Fortunately, this strategy has worked really well so far!”