In 2007, Platinum Property Partners (PPP) had just launched, initially as a mentoring programme for people who wanted to successfully build a portfolio of high-yielding Houses in Multiple Occupation (HMOs).

It was then that Kim and Steve Thorogood saw an opportunity. Having left their careers in financial services 18-months prior, they were now looking for a way to invest in property to boost their retirement income.

They were most interested in overseas property, but after hearing about PPP at a property exhibition, it made sense to pursue something in the UK.

In the coming months, they joined PPP on its journey to becoming an official franchise and consequently became one of the first five Franchise Partners.

Fast forward 15 years, and they are the longest-standing franchisees in the network and the first to become Patrons – for anyone who has been with the franchise for more than 10 years.

They have a portfolio of six houses and 39 tenants across Cardiff and Bristol achieving a return on investment of 43%.

Although the model has evolved rapidly over the last 15 years in response to the highs and lows of the property market, increased legislation in the private rented sector, an ever-changing tax landscape and changing tenant demands, Kim and Steve are proof that the PPP model is built to last.

All boom and no bust

In 2007, the property market was booming, mortgages were structured completely differently to how they are now and the planning and licensing requirements for HMOs were limited.

PPP was in its infancy, with few of the structured support and Head Office resources that are offered today and HMOs weren’t as mainstream, but the model still worked.

“We bought at the top of the market and then the financial crisis hit,” said Kim. “The property didn’t quite go into negative equity, but that didn’t matter anyway, because our aim was to hold it for the long term and generate an income. The model had proven that could be done and there was never a doubt about moving forward.”

Investing in Cardiff, Kim and Steve had bought a property and with a light refurbishment created a high end eight-bedroom HMO. Kim completed the Sui required Generis planning application herself and the Change of Use (to her and Steve’s relief) was successfully achieved – something Franchise Partners get a lot of support for today.

Despite most PPP properties now providing some en-suite bedrooms, this one had just two bathrooms between the eight tenants. And it remains one of the most successful properties in their portfolio.

“Over the last 15 years, our portfolio occupancy rate averages 99.02%,” added Kim. “In this particular property we’ve had tenants stay for six years in some cases, and nearly all have lived in the property for over a year. We’ve even had tenants leave the property to pastures new and then come back again because they love living here so much! Although we charge slightly lower rents than we do for our en-suite rooms, there is still an appetite for this type of shared house.”

Of course, the properties have needed some TLC over the years, and Kim and Steve have successfully navigated damp proofing works, repaints, window, shower room and kitchen replacements, whilst the properties were fully occupied. All achieved by good communication with their tenants.

Moving with the times – or not?

When Kim and Steve joined PPP, the ‘high-end’ model was different to what it is now and the constantly changing tax and political landscape has meant newer Franchise Partners have had to structure their property businesses differently to make it work for them.

However, Kim and Steve have stayed on the same path they set out on, creating good quality properties, but keeping refurbishment costs down. Having also purchased some existing HMO’s, but using their experience to not make many modifications to these has also worked extremely well for them, having increased average rents on these between 20 – 38.5%. This ironically, is credit to the flexibility and versatility of the model.

“Our strategy was always about boosting our pension, maximising income and benefiting from long-term capital growth on eventual sale of the portfolio,” added Kim. “Although the model has changed extensively, we haven’t had to adapt too much in the way we set up our HMOs, manage them or structure our business.”

Kim and Steve have continued to develop their HMO portfolio, with the latest property being purchased in 2018.

Kim said: “Whilst we do have properties that have ensuites, those that don’t mainly offer larger bedrooms and also a different kind of living environment which encourages social interaction. This has clearly worked as our rooms are always full and we have had some of our tenants stay with us for over 9.5 years!”

“It’s not that shared bathrooms or en-suites are better or worse,” said Kim. “It’s that you sell them in a different way, highlight the benefits like larger bedrooms, and ensure you get a good group in the houses who will spend more time together and get on. And it’s worked well for us so there was no reason to reinvent the wheel.”

The couple never shied away from a challenge or big project though, and were one of the first Franchise Partners to tackle a back to brick refurbishment of a Victorian terrace with a loft conversion. This also meant that the property required an HMO licence, which was also a rarity within the network at the time.

Another big change to the model that Kim and Steve did not pursue was the ownership structure. With the introduction of Section 24 of in 2015, which reduced the amount of tax relief landlords could claim on mortgage interest, many people started to buy properties in a Limited Business.

Kim commented: “We have no children so we always planned to sell the properties in the long-term. Whilst there may be some benefits to moving our portfolio into a limited business structure, as we have been actively keeping our mortgage debt down, it didn’t make sense for us. Of course, our net income reduced, but the model was absolutely still viable. If it wasn’t, we would review our strategy.”

Moulding the model

Thanks to Kim’s early entry to the franchise and her ‘learning on the job’, she became an official part of the extensive Power Team that is now in place at PPP as a refurbishment mentor in 2010.

To date, she has mentored 51% of her fellow Franchise Partners, spending several days with them on the refurbishment and conversion of their first property, and continuing to provide advice and host educational workshops regularly on anything from project management and budgeting to managing an upgrade with tenants in situ.

Despite being one of the most experienced Franchise Partners and a mentor, Kim still places a high value on being part of PPP.

“Every day is a learning curve and I don’t think I’ve ever missed a workshop or the opportunity to be motivated by the network,” added Kim. “There is always someone that knows something you don’t and the benefit of the social side goes without saying. Yes, the franchise was great then, but it’s even more fantastic now.”