Olaf Fetter and Jacqueline Standen live in Nottingham and joined Platinum Property Partners in 2011. In August 2015, they purchased their fourth HMO (House in Multiple Occupation) which is set to become their biggest yet.
In the second instalment of their project diary, they tell us how the refurbishment is going.
Olaf: "The refurbishment of the ground floor apartment is now a couple of days away from being completed and funnily enough, we didn't hear back from Lidl on our final offer so that was good. There are just a couple of finishing touches to be made but then it will be a ready-to-rent six-bedroom HMO."
Jacqueline: "Yes, the builders are pretty much out, but are thankfully putting the furniture up for us - having people on your payroll makes you lazy sometimes! The housing officer has also been to the property and is very happy with everything, so that's all good."
Olaf: "This part of the refurbishment actually went very smoothly. We did have a delay of a couple of weeks, but that was to be expected because of a contract our building company won with the council. However, we did have a bit of a problem with the business rates."
Jacqueline: "Before when we've bought a commercial property, we just rang up the valuation office and told them that we had planning approved and would be converting the property into residential and they've taken us off business rates. Then there was nothing to pay until the residential property was ready to be tenanted.
"But it seems as if the local valuation office has since gone to town on gathering business rates and I read somewhere that they have something like 3,000 appeals pending because of it."
Olaf:"It is a bit of a warning sign to other investors. These rates will stop this week because we've notified the council tax officer and will start paying council tax, but we are appealing against the charges to date. If it doesn't go in our favour, then that's an unexpected £5,000 that we have to pay."
Jacqueline: "Apart from that, everything is going great. We now have planning to convert the basement and the builders will need to use the facilities on the ground floor while the work takes place, so that's the next step. That's why we aren't in a rush to get tenants in the ground floor."
Olaf: "We were originally considering putting a two or three-bedroom apartment or HMO in the basement space, but we've decided to go for a very spacious one-bedroom flat. We discovered that putting in extra windows to create more bedrooms would have been very expensive so it's more cost-effective this way. It will be a fantastic space though and we expect to complete it within 10 weeks."
Jacqueline: "It is then our intention to ask the tenants currently living in the first floor HMO to move into the newly refurbished ground floor apartment. We haven't approached them yet but will do so in the next month and give them an incentive that's suitable for them all."
Olaf: "This is so we can start building the third storey, which we have now received planning permission for. The plan is to create another six-bedroom HMO up there. So we now have the go ahead to go up and down, which gives us lots of options.
"I'm now in the process of getting serious quotes for this work. We need to know exactly how much it is going to cost, because it's a business decision at the end of the day, not an adventure! If the work costs more than buying another HMO then we won't do it but we have planning approval, so nothing stops us going back in a few years and doing it."
Jacqueline: "The property is still great though and works as it is. We always knew that from the start. The additional storey would be a bonus."
