Category Archives: Management of an HMO

This Student Needs Help

As you may know I’m not much of a fan of students, having witnessed first hand their inability to change a lightbulb or ensure their guarantor completes the correct forms BEFORE collecting the keys.  But today a very nice young lady called Aliya contacted me through the blog asking for help from HMO Landlords.  She’s finishing her dissertation on energy providers for HMOs which needs to be completed by Friday 14th August and she has had little response to the numerous emails she’s sent out.  Hey, could it be the subject matter that has failed to arouse the email recipients?!

She’s not selling anything, just trying to get some answers so please back her and lets get her the data she needs to put together something factual and convincing to pass.  The survey will take no more than a minute, if you’re quick, and can be found here: https://www.surveymonkey.com/r/MQL6RCR

Your responses will hopefully absolve me of all the disparaging comments I’ve ever made about students especially in this post I wrote last year and, on behalf of Aliya, I thank you.

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Subletting – A Perfect Storm

Experienced landlords among you may have discovered a tenant subletting all or part of the property (with or without your permission), but as this blog seems to be attracting more first time landlords and investors I want to draw reader’s attention to this increasingly common practice.

In the nine years I’ve been investing it’s not something I’ve had to deal with in any great depth till now.  There was the chap who handed his room keys over to “a bloke in the pub” a couple of years ago but he only managed a couple of nights before I changed the front door lock due to a breach of security.  He never did contact me to retrieve his holdall and grubby Y fronts.

But when you hear that six Somalians, with false names, were discovered in a two bed flat in a small, sedate seaside town like Eastbourne, you know that it’s common practice everywhere else.  In the last 3 weeks I’ve received no less than 4 requests from tenants to move in their boyfriend and, in some cases, for their entire families to join them from abroad.  All requests have been refused based on the maximum comfortable number of people and facilities ratio.  This didn’t stop Bruno, however, who has moved his sister into his room and no amount of Google Translate can make him see that it contravenes his tenancy agreement. Her very sweet smile clearly indicated that she doesn’t give a s**t either.

Landlords and particularly HMO landlords: I urge you to make regular checks on your properties.  Some tenants will see a room in a shared house as their home and castle, others will view it merely as a cheap convenience to invite their mates over and have them all bunk down on the floor, particularly if they see this as normal practice.  Waldemar was forced into asking me if his friend, just arrived from Poland, could stay after Tom found him one day in the kitchen.  Tom likes to know who is coming in and out of the front door particularly if he’s had a skin-full and doesn’t want to assault a legitimate tenant.

And that’s the point – Tom’s drinking habits are a pain to all and sundry: the police, the tenants and me when the fire alarm call point gets mistaken for the light switch.  But we put up with him because, without him, the house would be mayhem.  Having one bossy, house proud, person per HMO means they are your eyes and ears, particularly if they’re home all day.  It doesn’t take long for a house to earn a reputation for taking in all and sundry. You start to understand why those fabled landladies of the Seventies wouldn’t allow overnight visitors.

I treat each comment made by these “house wardens” seriously, and work with them to resolve concerns.  This gives them the confidence to protect their home and not be afraid to stick up for themselves and the other paying tenants knowing they have my full backing.  It’s in their interests to know who they’re going to meet on the way to the bathroom and they value being able to sleep soundly knowing the house is secure and quiet.

What do you do if you discover an unknown person in the house?  You can’t serve notice if the tenant has abandoned the property and I don’t believe you can claim they’re squatting if the subletting tenant has keys.  Therefore, I suppose the simplest resolution is to assume the tenant has abandoned the property, follow procedure and change the locks leaving a clear message detailing the landlord or agent contact details for re-entry.  If the tenant is still in residence, it’s a Section 21 notice or a quiet word in their ear to get their guest out immediately.

If one of my tenant’s requests a guest to stay over, I impose a £25 per week charge, a maximum of two weeks’ time frame with a specific end date and expect them to introduce their guest to the other housemates.  I will also let everyone in the house know there is an extra person temporarily.

I’ve just written an article on the subject of subletting for the RICS (there’s no link as it’s a subscription only site for RICS members) and delivered a speech on the rise of Rogue Landlords for a local Toastmasters Club.  My research on the subject led me to watch Panorama’s The Great Housing Benefit Scandal; what with Ben Reeve-Lewis’ appearance on BBC2’s Rooms, Rogues and Renters earlier in the year and Housing Enforcers presented by Matt Allwright subletting is providing a food mountain for the media and a shed load of cash for the scumbag landlords.

Click on the links above, watch the programmes and it will either inspire you with ideas to adapt your business plan and capitalise on the misery of desperate people or you may hang your head in despair knowing we share the same job title of Landlord.

£600 crappy caravan yielding 1400% anyone? (Watch the Panorama programme and you’ll understand)

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All That Glitters Is Not Gold!

As yet another marketing email drops into my Inbox extolling the virtual virtues of HMO ownership,  I’ve decided I can no longer stop myself from passing comment on the increased hype of HMOs.

The email came from an estate agent I sacked last year for being useless and, eight years ago, actually told me they wouldn’t touch HMOs with a barge pole.  Why then, did they send me and possibly a thousand other property investors on their target list, promises of glittering HMO yields?

The reason, I believe, must be this:  with the rise of online and high street letting agents all scrabbling to secure properties to let, margins are thinner as they compete to offer the cheapest headline service.  However, the fees to cover their operational costs (cars, staff, rates,) HAVE to come from somewhere so they divide and spread their costs.  Here are some examples of fees levied to the tenant and landlord before a let has begun: Continue reading

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Leaking Roofs and A Drunken Call Out

Heed my warning all you new or wannabe property portfolio owners!  You may remember in this post I mentioned that, as the majority of Eastbourne (Sunniest Town in Britain apparently) was built around the latter half of the 19th century, some of the building materials are beginning to fail such as mortar and felt.  Now, on the Sunshine Coast our weather is mild compared to the rest of the country but this year the roofs have really taken a hammering in the wind and rain.  Four, yes FOUR, of my properties can no longer be patched and now require new roofs.

Perhaps more experienced, long in the tooth landlords investigate the roof condition of a potential BTL before considering anything else but from my research of Property Millionaire Courses run by gurus the focus is on the bottom line numbers/profit at no point have I seen anyone flag up what will happen or how it will affect the bottom line when a major repair needs doing which hasn’t been budgeted for.

Which roof do I pick first when looking at £10-15k apiece?  Well, obviously the one that shows the most!  So on top of delving under the stairs to look at RCD, open kitchen cupboards to locate boiler, my advice is make sure you have a good look at how well the tiles are likely to keep the rain off.

I don’t mind the investment as I’m young enough to feel the benefit for the next few decades and I don’t use the profit to live on, but if you don’t have the cash in reserve and cashflow is tight, a major expense such as this will really, really hurt if you haven’t budgeted for it.  After all, there are only so many times you can fob a tenant off with the words Continue reading

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Smokin’ Sounds The Alarms

Today’s post focuses on our foreign and immigration-approved (I think) tenants – we may share a commonality as EU citizens but the last few weeks have shown that we’re definitely still worlds, continents and nations apart.

It started off with a faulty fire alarm.  The two storey maisonette was classed as an HMO by the council as it was part of a three storey building even though we don’t own the flat below which has its own entrance.  Under the HMO regulations we were required to install a Grade D alarm system providing every room with their own hard wired smoke alarm and linking it to the flat below.

There’s been quite a bit of room changeover recently and this HMO has one very grumpy English man, a Czech lady, two Portuguese men and a Spaniard.

The smoke alarms started to go off at seemingly random times but mainly throughout the night so we asked everyone to check their own alarm to see which was flashing red to show which one was faulty.  Everyone denied seeing any red lights – I’ll clarify – anyone who read and understood my texts denied either hearing the alarm or bothered to report it sounding.  It was only the frequent calls from the Englishman and the lady in the flat below which gave us an idea of what was going on.

After seeking advice from the manufacturer and various alarm system engineers we went into the rooms to remove one alarm at a time to find the fault.  What we found: Continue reading

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Winter of Discontent?

As the relentless rain continues to pour on a daily basis, I’m suddenly finding that the small stain in a room can no longer be treated with Muffycid and is starting to become a threatening, full-on damp patch.  It’s not just happening in my home (where I’ve successfully managed to ignore the growing discolourations) but I’ve been called out to three houses all showing similar symptoms.

It turns out, according to the builder, that most of the Eastbourne town centre housing stock was built between 1880 and 1910.  Bearing in mind a roof has a lifespan of about 50 years this means that all the roofs in the town are starting to fail for the second time since they were built.  And it’s not just roofs – the mortar between the bricks has around a 100 year lifespan.  At first I thought he was joking to get away from the boring explanation of roof felt, but as I look around the town it’s certainly gold rush time for roofers and scaffolders.

And here’s the problem of having all your eggs in one basket – Continue reading

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Implementing the Immigration Bill by HMO Landlords/ladies

I’ve been reading with great interest details of the Immigration Act which was announced on 14th May 2014 as, once implemented, this will affect all landlords but primarily HMO Landlords.  One of the highlights of the Act is:

“Requiring private landlords to check immigration status of tenants, preventing those with no right to live in the UK from accessing private housing”

Immigration minister, Mark Harper, diplomatically goes on to say “There is no doubt that immigrants have helped make Britain a richer and stronger society, but we must take firm action to address illegal immigration. Continue reading

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