Every property brings different opportunities and challenges. We would like to share the insight of the development with you.
Project
This is the second property we secured in the summer 2021, when the market was still buoyant. Our offer was accepted at a discounted price. The purchase was completed in January 2022. It is an end of terraced house with 3 good size bedrooms and two reception rooms. The property is located in Article 4 area and the full planning permission to change the use from C3 to C4 was submitted and granted. The house is now fully rented.
Strategy
The property is rented as a whole house to a maximum of 4 sharers. It is a slight change in our strategy, as we usually rent separate rooms to individual tenants. The main reasons are the rising energy costs and higher turnover of tenants when renting individual rooms. This house is rented as a whole unit, under one contract without bills included.
Scope of refurbishment
The property was in need of full refurbishment. The electrical installation was in a very poor state and needed to be fully rewired. The property now benefits from a new kitchen, bathoom and carpets. All walls were plastered and painted. A bike and a bin storage was also provided.
Challenges
1. The purchase process took way over 6 months
2. The first lender has rejected our application, due to the amount of work needed in the property
3. The second lender issued the offer valid only for 3 months with a lower LTV and a retention of couple of thousands pounds towards the electrical installation upgrade
4. The purchase was completed on the last day of the mortgage offer validation period - that was very stressful, as otherwise we would have to apply for the offer extension, which would cause further delays
5. The planning application took quite a long time, so we had to take the risk to complete, without knowing if we would be able to rent it as an HMO.
Click below to see the next project
