Category Archives: being a landlord

Landlord Tax Changes – I have a plan!

I’ve been silent for a while.  The main reason is that I’m really not sure which way to turn following recent government tax changes. Having digested lots of industry news via the excellent Property Tribes, Property 118Landlord Law  and The Property Hub (there are others but I only have so many hours in a day).  Mulling over the articles, comments and interviews it appears that, as mortgaged landlords, we’re about to become rather royally screwed. So why are they not screwing the landlords who don’t have mortgages??

Of course, this isn’t a recent announcement and I’ve been looking at our position carefully, examining the options, looking at the bright side as well as for that silver lining that I understand all clouds have.  The upshot is: the removal of the “wear and tear allowance” has increased our tax bill by £3000 this year. It will be increased again by a further £9,000 or more by 2020 (that’s £1000 a month!!) with the restriction on mortgage tax relief. It isn’t cost effective to become a limited company…. and the flat we’re about to buy is costing £3,000 more than if we bought it a year ago.  On top of that, the town is being swamped with rooms which look something akin to boutique hotels (complete with matching cushions and artfully placed books on a desk) and new landlords are charging as much monthly rent as a 2 bed flat commands, whilst their designer folly grips the market. They will hit reality soon enough though when someone throws up on the pale grey carpet.

So, what’s changed in the last few months?

  1. As letting agents, our business is steady and growing. Landlords haven’t rushed to sell their portfolios and our business model isn’t reliant on tenant fees – so all good there.
  2. As landlords, we have record low turnover in the HMOs as our rooms are now cheap compared to the new ones coming onto the market. Ok, so the curtains don’t match the bedspreads, and the furniture was chosen for durability rather than style, but really, what IS it with beautifully designed rooms?!?  I don’t get it. I must be turning into a dinosaur.
  3. We have now taken the decision to cease letting to any benefit tenants which is a great sadness to me. The last three evictions of state sponsored tenants have resulted in court costs, council interrogations and anti-social behaviour which caused misery to the remaining tenants.  When I started, I had a link into the council, we worked together as we both had the same goal in mind – to house someone who needed it.  I’m now met by a firewall of an email system, no named person to help get the claim underway and no way out if the tenant fails to behave or fails to pay.
  4. The flat we are about to buy is a no-brainer as we already hold the freehold and the maisonette above, and will then own the whole building. We were raising £100,000 using part mortgage and part further advance from another property, as we’re still recovering from January’s tax bill.  Despite having excellent credit ratings, a healthy income, a portfolio in good health and having never missed a payment, we are being refused on the basis that the mortgage company believe we want to use the money to sustain our letting agency!  This is incredulous, unless my husband is planning on buying a new, younger administrator and a Maserati in which to drive her around.
  5. On top of this purchase, we now need to pay 3% of the purchase price to the Government even though the flat isn’t in the Stamp Duty bracket.

Is it enough to throw in the towel?  Almost, but not yet.  Although I do have a plan B: from May 2017 the Government are opening up apprenticeships to ALL ages, not just 16-19 year olds so you may find me working my way up the corporate ladder with sickness benefits, a company car, paid annual leave, and a share option scheme, where I may just replace the extra £1,000 a month tax payment I need to pay by the time my pension kicks in. Only to discover the government have taken that too!

 

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Stupid Conversations

Any job dealing with the general public puts you in the firing line of negative communication – unfortunately, 90% of it is beyond daft and probably 10% has any validity which you can work with.

Here are some recent gems:

1. Prospective Tenant

Me:  Why do you want to live in a room?

Tenant: I’m working for Easyjet and buying them 80 planes this month and the Government owes me £1m when I invoice them.  I’m also going to buy 1000 Continue reading

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Filed under being a landlord, Management of an HMO

Thank You HMCTS!!

Now, I’m not all that great with technology – my website needs updating, my social media presence is non existent and Facebook flabbergasts me.  However, I have just discovered a fantastic link to complete eviction forms which I believe must have been developed just for me.

Ten years’ ago I unknowingly evicted a tenant illegally which brought forth the wrath of the council, their solicitors, Citizens Advice and some bloke working for a homeless charity who threatened in no uncertain terms to “sort me out”.  It wasn’t a great experience especially as the tenant was found half dead and naked, I’d had to give him the kiss of life which turned out to be more of a peck of derision, AND visited him in hospital with grapes.

From then on, Continue reading

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You Have To Be Tough To Be A Landlord

Ok, so being a landlord is hardly a profession which requires a degree or other formal qualifications.  We’re not going to save lives with our medical expertise or improve the world with great engineering feats.  However, every day, in our small world, we deal with good tenants, clever tenants, unbelievably daft tenants and downright manipulative, difficult tenants.

Being a landlord and letting agent is a 24/7 profession – you can turn the phone off or not look at your email, but your customers are human and your product can fail or leak outside of the 9-5, Monday to Friday.   This blog was set up as a form of personal therapy to let off steam and encourage would be HMO landlords to think twice.  Faithful to its origin, here’s a rant of the week so far: Continue reading

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So You Want To Run An HMO?

This post has been borne out of the numerous emails I receive from people wanting to leave the day job and invest in property – focussing on HMOs due to their higher yield.  I answer every email honestly and, I hope, encouragingly but my enquirers disappear back into the virtual world and I never hear whether or not they’ve pursued their dreams.

If you’re considering writing to me for advice on ditching the 9-5 and earning enough money through HMOs to keep your family, go travelling and leave a decent nest egg for the kids, below is a typical response: Continue reading

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Implementing the Immigration Bill

The phone rings late one night last week.  It’s Erica, sobbing hysterically down the phone in broken English that her new husband, Harry, had been taken into custody and she didn’t know what to do.

Harry and Erica married last month; she’s Polish in her late thirties and he’s Indian in his mid twenties.  She swears to me it’s mad, impulsive, passionate love and he just smiles and nods in agreement.  They’re hard working, quiet, pleasant and an asset to the house and, quite frankly, anyone who can put up with binge drinking Tom and not moan to me about it, becomes a star tenant.

The story goes that Harry and two friends had been walking down the street that night. On spotting a police car, they pulled their hoodies over their heads and dashed into Ladbrokes.  The police watched as the men wandered Continue reading

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Free To A Good Home: One (Almost) House Trained Tenant

Arrgh!  I first began this blog as a form of therapy to offload some of the ridiculousness of human nature which us landlords come across on a daily basis.  Thankfully over the last couple of years I’ve either become a better judge of character or God threw me some decent, independent, rent paying tenants just to give me a break.

Throughout the blog posts, Tom has appeared on a regular basis as either the cause of some unacceptable behaviour or as an inspiration with his unique quotes.  On average, every 6 months he goes off the rails, gets blind drunk and throws his not inconsiderable weight around the house and is completely oblivious the next day of anything which occurred 12 hours earlier.  I have a rant at him, produce the evidence and issue yet another Section 21.

He’s been a tenant for 8 years and I’m now convinced he suffers from a learning difficulty and is unable to interpret people, emotions or social situations.  He’s nearly 50 and conditions such as dyspraxia, autism, ADHD, etc. weren’t acknowledged or diagnosed when he was young to the extent they are today.  I’m also convinced that is why he drinks – it’s never at home, always in a pub and he’s always the first to buy someone else a drink.  He has a “friend” who can mend a phone, operate a lawnmower, do a deal on a laptop  or window cleaning but these “friends” never visit, never have a name and are nowhere to be seen on Christmas Day.  When he has only loose change in his pocket, he always makes sure there’s food in the fridge and his sheets and clothes are pressed, the house is spotless and he loves to help out other housemates. This can go on for weeks on end and he has never, ever once been late with his rent top up.

Then, he obtains some cash from somewhere, goes to the pub, comes home with or without a police escort and without provocation becomes so angry the other housemates are scared as he bashes his way round the hall and upstairs to bed.  They’re lucky if he doesn’t p**s himself along the way.  They all say the same thing – what a wonderful, kind man sober, but an incontrollable nightmare when drunk.

According to Tom, he’s been in the Army, worked in the scaffolding and security businesses and run warehouses but I’ve glimpsed his CV and he’s been unable to hold down a job for more than a few months since school.  As someone once said “Run a warehouse?  He can hardly run a bath”.

At the beginning of the year I was at the end of my tether as to what to do with him after he set off the fire alarm thinking it was the light switch.  I contacted social services for advice as I deem him on the verge of vulnerable if evicted as he was previously homeless before he came to me.  I didn’t get a response.  I know the council are under far too much pressure finding housing for those people for whom they have a legal responsibility and as a single man with no dependants, he won’t be entitled to any sheltered housing.

I have no idea what will happen to him or how this particular situation will end but I do know that I’m sorely tempted to wrap Tom up in a blanket one night, place him in a moses basket with a bottle of whisky and a note with his name and NI number and leave him on the doorstep of the council’s housing department to be discovered the next morning.

Have you booked your place on Easy Law Training’s courses yet?  We’re running an Essential Legal Points for Landlords workshop on Thursday 24th September 2015 in Winchester, Hampshire and HMO Law and Practice workshop on Thursday 8th October 2015 in Maidstone, Kent.  Click the links to book.

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