Ever heard the term ‘fail to plan, plan to fail’?! I’m beginning to know what this means!
One of my HMO’s that I’ve blogged about in the past (it’s a corker!) has not exactly gone to plan recently. I thought it worth telling you about though as there’s a lesson in there for all of us when investing in property…
The property is a very big 5 bed house on the Wirral that we converted into a 7 bed HMO. If you were just converting to a 6 bed then you would just need to get an HMO licence but, with a 7 bed, you also need planning permission. We applied right from the start of the project for the planning as, for those of you that have ever dealt with the council, you’ll know that it’s not a quick a simple process – far from it! About 5 months later (yes, 5 months!) we got notification from the council that the application had failed and the reason cited was that it would have a ‘detrimental effect on the local neighbourhood’! Even though no-one from the council came to see it! If they had, they would have seen that it is a very high end HMO, all en suite, let only to professional tenants. In my opinion it is now by far the best house on the street and will bring the neighbourhood up rather than down!
So, we appealed and whilst the appeal was going through we started marketing and letting the other rooms. About 2 months later we found out that our appeal had also failed…aaargh! One of the neighbours had written a long letter to the council putting forward their objections saying that we had created a ‘doss house’ and it would have a huge impact on their quality of life living so close to it. Unbelievable. Despite offering to show the neighbours around the property to let them see the quality of the accommodation we had provided, nothing worked and we now have to face the fact that we can’t let out the 7th room.
I did know that the planning wasn’t guaranteed though and so I knew the numbers still worked on a 6 bed. We have now let out the 6th room to a tenant who wants to use the 7th room as a lounge area (they are right next to each other in the attic) and so have been able to charge an extra £150 a month for it. Room 7 would have let at about £430 a month so we’re only now down by about £280 a month instead of the full £430. AND we can reapply for planning in 12 months’ time but this time we’ll be applying to convert a 6 bed into a 7 bed HMO rather than applying for a residential property into a 7 bed HMO. Much simpler and likely to be accepted as we will have a successful track record.
So, all is not lost because we had a back-up plan. Really really important in the world of property. I’m happy as I have a cracking property and my investor is happy as we are able to get practically all of his money back out of the property (on refinance) AND we will both get great income from the property for many years to come.
If you’re interested in having a chat about anything property, then please do get in touch. It’s my true passion and if I can help you get a better return on your money and create passive income for life then I would love to.