Last night Channel 4’s Britain’s Benefit Tenants had my partner and I screaming into the sofa cushions at the naivety of the characters: one of whom was the optimistic landlord who invested his hard earned pension pot of £40k into a Hartlepool terraced house he’d never seen before. Looking forlornly at his due diligence homework courtesy of Google, he realised he’d cocked up. Fighting his corner was the lettings agent from NGU Homelettings, David, chasing rent arrears from a lady who refused to answer his efforts to contact her so he could “prevent her eviction”. One of his other cases were two drugged up brothers who were finally being evicted after a year and were oblivious to their dog peeing against a cupboard fondly labelled as a family heirloom.
After the programme, I dismounted from my high horse and remembered the following:
- My ex husband and myself also bought property (pre 2008 ) – unseen and unresearched – based on NGU Homelettings advice and investment potential for which they levied a hefty armchair and refurb fees. My excuse? I thought my ex husband knew something I didn’t. His excuse? The same as the landlord who bought the property in Hartlepool in a street where no one wanted to live – on paper it was a strong investment.
- As I was screaming into the pillow “You’ve waiting HOW long to evict the tenant?!?” the unswerving, magnanimous David excused the delay by saying something along the lines of “It’s better to keep someone in the property and have a chance of them receiving Housing Benefit to pass onto the landlord”. To be fair, he worked hard at trying to get that something or anything out of the tenant and I admired his patience. After all, he doesn’t have the luxury of quiet, clean, risk free tenants waiting in the wings to snap up one crappy, trashed house after another in a street where even the trades fear to tread.
On the subject of crap, did you see HOW much the tenants left behind? Again, David shrugged his shoulders and decided it could have been worse – at least they didn’t nick the copper.
Three Lucky Benefit Tenants
A few weeks ago an opportunity came up for Nadine, Anthony and a friend to move into a proper house after accepting that they would be 150 years old before any kind of social housing would be available. I’ve said before in a previous post that perhaps living in a room long term as you grow old could have a negative effect on one’s mental health. But with no job (or likely to ever have one) and relying solely on welfare, they knew most agents would balk at allowing them to rent any of their landlord’s precious abodes, despite the fact that they’d managed to save for a deposit and the first month’s rent. Their prayers were answered when a client of ours bought a lovely 3 bed house, handed it to us to manage and declared that Nadine et al sounded fabulous (although we did have to encourage Anthony into a clean T shirt before he met her). The landlord is now in possession of long term, reliable tenants and the tenants are ecstatic to have room to swing the proverbial cat.
But the crap they left behind! I love these people and would stand up in a court of law to defend their honour. However, after the fifth trip to the tip with their unwanted possessions I was ready to kill them. I have come to realise, when you’re on benefits anything free/gratis makes your heart leap with joy even if you don’t need it. I know Nadine would trawl the charity shops far and wide looking for something to bring home – clothes, pictures, lava lamps and a very weird set of elephants. None of them have a car so there was never going to be a hope in hell that they could get rid of their hoard. I spent a very wet and windy day sitting in the car listening to Tom confess his latest sexual exploits as he helped me take the detritus to the tip. And it wasn’t the smelly mattress which made me gag.
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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
I’ve been reviewing the blog recently and decided that, after seven years, I am no longer a Novice Landlady. Having said that, I’m not an expert in HMO legislation either – I’ll leave the ever changing rules to solicitors such as David Smith of Anthony Gold solicitors and local authorities who are paid far more than I to translate all the finer points. Thank you to everyone on Twitter who consider me to be more well versed in this area and I’m just grateful we have a great HMO council department who trust me to do the right thing within the boundaries of the aforesaid legislation.
So, do I carry on with the blog as a journal, bringing you my tenant stories interspersed hopefully with a few nuggets of useful tips and information or do I make it more of an educational “How to run an HMO”? Readers are very kind with their comments and often ask questions such as where they should invest, what yields I achieve and the finer details of how to make their venture into HMOs a profitable one. I’m only one of many thousands of landlords (many of whom are making far more profit than me) and enjoy bringing the realities of the coalface to any new investor who thinks it’s all about yield. Having said that, for a hefty fee, I’ll happily come out and show you how to set one up and interview tenants!!
If you’re looking to chew the fat and debate the pros and cons of property investment, I heartily recommend Property Tribes, The Property Hub and Property 118 where you can connect with property people nationwide. They are all online to give you their opinion and benefit of their experience but it’s no substitute for getting down and dirty and throwing yourself into the practicalities of BTL. These sites weren’t around when I started and desktop research had little to offer. As with Channel 4’s Undercover Boss, there’s no better way to understand your business’ strengths and weaknesses than experiencing all aspects of the work for yourself. Once you know what makes your property profitable, then you can hand it over to a letting agent if you like.
With the acquisition of a new computer, I’ve decided to better systemise my business by creating tenant records and scanning in all their documentation then storing it somewhere between earth and Heaven. At present, I often begin conversations with tenants “Remind me, when we last spoke….” or scrolling through texts to find out exactly the terminology one tenant used to slag off another. In the same way that Miranda Hart promised herself to become a “new me” by power walking wherever she goes, drink fresh juice and eat homemade muffins, I aim to stop carrying around my tenant’s emotional baggage and rifling through Tenant Information Forms for email addresses that the cat’s been sleeping on.
However, it won’t be complete detachment. Saturday morning rent collections (so few want them now) allow me to
- Be shouted at by a Morroccan Rastafarian who couldn’t wash his dreadlocks properly because the shower was underperforming and he thought I was limiting the water output to save money,
- Witness Tom’s attempt to drink himself to death after borrowing money for “rent” from a family member
- Be given 70% proof orange liquid by some the Portuguese sisters/lesbians at 10am and
- Try to assist a pedantic long term tenant who says he’s living with damp, when all I can find is a small brown stain on the ceiling 20 feet away and he won’t give me permission to send in a decorator. He wants fifty quid “for materials” to do the work himself.
If you’re new to investing and have already bought and read my book, I can now recommend Property Geeks new book Beyond The Bricks which is available to preorder. It’s hot on the heels of his immensely successful first book “Property Investment For Beginners”. With all the above knowledge available at your fingertips, now is the time for you to jump feet first into Buy To Let. (Just don’t ask me to point you in the direction of the next hot investment location!)