We’re living in unprecedented times, aren’t we?
Since I started penning this piece, the second instalment of my HMO journey with Platinum, it’s fair to say the world has changed dramatically.
It almost feels strange even writing this, given everything that’s happened over the past few weeks with the outbreak of COVID-19 across the globe.
It’s something that will affect all our lives and, at the time of writing this and having deleted the first draft from seven days ago, we still don’t truly know the real impact the virus will have.
In terms of our journey with Platinum, it’s business as usual as much as it can be for my husband John, my auntie Sue and I.
Since I ended my first update with us losing the property we’d offered on that was set to become our first Platinum HMO, we’ve dusted ourselves down and jumped back on the horse.
Our buying mentor Mike was on the phone right away asking us what our plan was and the very next weekend we were out viewing another batch of potential properties.
During our weekend of viewings one property, in a superb location in Poole, really stood out.
We were so confident, based on everything we’d learned from our buyer mentoring sessions, that the house would work as an HMO, we put in an offer that day.
Mike and the Platinum planning team went through the property’s details with a fine-toothed comb and we were all confident it would make a great HMO in a prime area.
Forty-eight hours after our offer went in on Saturday, February 8, it was accepted.
I should probably point out at this juncture that not all Platinum Franchise Partners move this quickly when purchasing their properties.
But our situation is quite unique because the property we’re buying is owned by an equity release company.
It’s fair to say they like to move quickly.
They purchased the property from the previous owners on January 31 and sold it to us on February 10.
Looking for a Plan B
Seven days later we went to view the property again with Mike – but in true Platinum fashion, we also viewed another six properties on the same day.
We still weren’t 100% sure the house we’d offered on was going to work and there were still a few things to clear up and be certain about, so the way Platinum works is you carry on almost as if you haven’t yet found a house.
That means viewing more properties with an aim of finding a Plan B which you can look to progress with if property A doesn’t work out for whatever reason.
Throughout the pre-mentoring and buying mentoring with Mike, there were a number of things that we came across that we wouldn’t have considered on our own – things like drainage, soil pipes and where we could put en-suite bathrooms.
There were a lot of different nuances with the property that we didn’t pick up on, but Mike did.
Another was how close the property is to the neighbouring house and whether we can put in a window for an additional bedroom on that side, as well as where the fire exits are going to be.
We then worked out what we thought the floor plan would look like as a six-bedroom HMO ahead of our refurbishment mentoring day.
We completed on March 12 – slightly over a month since making an offer, which is incredibly quick. Normally purchases take around three months for most Franchise Partners.
Our solicitors are Abenson’s from the Platinum power team and they’re so used to working with our Franchise Partners and undertaking HMO conveyancing, it really does make a massive difference to the timescales.
We work with them day in, day out and that really counts for a lot – anyone who has ever purchased a property will know how frustrating conveyancing can be, so having a firm like that on board is amazing.
The Budget and stamp duty reform
We held fire for as long as we could on completion due to rumours of Stamp Duty reform in Chancellor Rishi Sunak’s first Budget earlier this month.
While it wasn’t clear whether a rumoured rise in the Stamp Duty threshold to £500,000 would apply to landlords or owners of second homes, we wanted to wait and see how the land was lying before completing the purchase.
As it turned out, the rapid development of the Coronavirus meant the Budget was largely uneventful for property investors, save for the additional 2% surcharge set to be levied on foreign investors from 2021.
Prior to Mr Sunak’s speech, though, the Bank of England’s decision to cut interest rates back to their historic low of 0.25% in the wake of the Coronavirus spread did mean we got access to some more attractive mortgage rates before we completed.
Because the sale moved so quickly, I was also keen to get the refurb mentoring day pencilled in before we completed. My refurb mentor only had one date in her diary which was February 25, so that’s what we did.
We were at the property from 8.30am until 7pm and it was a huge, huge deep dive into the house.
We looked at everything, including parking and whether to remove a garage that’s on the side of the house. There are issues with asbestos and two party walls, so we had to consider whether we were going to try to use the garage as additional space.
We appointed an architect to do the drawings, we interviewed three builders, we looked at the water system and what would be required, fire safety regulations, where en-suites need to go and how we can maximise the space.
The key with HMOs charging premium rents as Platinum’s do is to provide plenty of space in rooms, because these days people often want to watch Netflix or work on their laptops in their rooms rather than use a communal living space.
The more space you can create, the better.
The refurb mentor is there right from that first mentoring day until you start getting your property tenanted, on the end of the phone or available to check out things you not sure about.
There’s also the Platinum community to fall back on, so I’ve been using the network’s online forum to ask questions about things like what fire alarm system to use.
These are independent reviews on items like that from people I know and trust and that’s invaluable and really shows how Franchise Partners help each other out.
Those little nuggets of knowledge will save us money, too, which makes a huge difference with any kind of rental property.
Onwards and upwards
I’m enjoying it so much and I really do feel like a sponge at the moment, despite everything that’s going on.
There’s a checklist for everything, so I really feel in control of what I’m doing. We’ve been hand-held and spoon fed every bit of information we need from the mentors and the experts at Platinum’s head office.
Our mentors have also engaged with the council from day one, letting them know what we’re planning and asking them what their thoughts are.
Building that relationship early is worth so much because the local authority is taking us seriously and can see that what we’re planning is a really good quality house for professional people.
I almost feel guilty for saying this given everything that’s happening around the world, but we’re extremely determined to remain as close to normality as we can with this first project.
We’re lucky in that the building trades should be able to carry on and we hope to have broken ground in the next few weeks.
Beyond that, the security of property provides real peace of mind and doing it with Platinum even more so.
The business model we work to is massively robust and there will always be a demand from tenants for good quality, reasonably priced homes.
Coronavirus won’t change that in the same way the financial crisis of 2008 didn’t.
I’ll update you again in April, when we hope to have the builders on site and will be moving another step closer to our first completed HMO.
In the meantime, if you’re keen to find out how Platinum could work for you, register your interest in a Discovery Day.
We’re in the process of completing a digital version of these events we run for potential Franchise Partners in light of the Coronavirus situation and more details will be available on the Platinum website soon.
I wish you all well during these uncertain times – look after yourselves and others.