Tag Archives: property

How The Market Is Changing

From where I’m sitting, this is purely subjective of course. Having run HMOs for 7 years and I’d only planned to do it for 5 years, reckon I’m now a couple of years past retirement. The plan had been to squeeze as much yield out of them as possible, sell at a profit and do something else. As a plan it had strategy, goals and optimism but, in reality, it was nothing better than a property wealth creation course pie-in-the-sky unsubstantiated greedy wish.

Instead, thanks to the recession and divorce, I have a niche business, constant room demand, an appreciation of real life on minimum or no wage and a set of tenants whom I couldn’t bequeath to another landlord with a clear conscience (on both sides).

What do you mean The Market is changing?

From 2007-2011 every tenant which arrived on the doorstep came armed with a good sob story, housing benefit papers to sign, could be found on any benefit database under several addresses and, if I was really unlucky, on a few police databases as well. Apart from Paul and Andrew in recent times, everyone else has pretty much kept their nose clean (to my knowledge). I suspect a couple are up to some dodgy deals and workings but we need a few in society just to keep the police on their toes and prove we still have freedom of movement (Yes, I do believe Big Brother will be a reality in my lifetime).

Perhaps I’m getting better at filtering advertisement responses? Immediate “no”s are: Continue reading

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No Longer a Novice HMO Landlady

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!)

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HMO Tenants Really Are Greener – Here’s The Proof!

Following Ben Reeve-Lewis’s recent article on Hands on HMOs I’ve decided to add my penny’s worth about HMO energy usage.  Earlier this year my family took back one of our HMOs as it needed refurbishing and I wanted to cut down the number of rooms I was renting out from 20 to 15.  It’s a fabulous house and we bought it with the intention of living in it at some point.

With a huge gasp of shock I looked at the latest electricity bill.  Now, bearing in mind there were 5 individuals living here with 5 tellies, 5 phones and other electronic paraphernalia, endless cups of tea and no responsibility towards the utility bills I thought our little family of four would at least halve the bill.

Here’s a copy of the up to date usage summary – can you see when we moved in?  The grey column is 2010 and the blue column is 2011 split by months.   We moved into the house in May 2011 and almost immediately doubled the usage from the previous year.  I’m at a loss to explain the figures and can only put it down to the tumble dryer, my son’s night light, endless hours of ironing and hoovering (not!)  or my kids have set up a cannabis farm in the attic.

So, if you’re worried about your HMO tenants abusing the electricity usage- don’t.   Your kids/husband/wife will be far worse and you can’t argue with the proof!

Gas

P.S.  You may be wondering about the gas usage – as a family we use slightly less than the tenants did but that’s probably down to the fact we don’t shower as much as them.  This year we’ll be cuddling under blankets together due to the rate rise – probably a bit much to ask of my tenants.

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I Have A Dream………..To Turn Unwanted Tenants Into Wanted Tenants

This post is about a far from practical dream I’ve held since becoming an HMO landlady.  This dream has been unearthed from the depths of my brain after picking up a leaflet asking for volunteers to man a temporary winter night shelter for the homeless, a debate with one of the kindest, most Christian ladies I know as to it’s viability and the following article which landed in my email box http://www.insidehousing.co.uk/ihstory.aspx?storycode=6517904  With much trepidation that readers may laugh out loud and recommend me for a public stoning here goes:

Over the last 5 years I’ve given ASTs to around 10 homeless people recommended through the Salvation Army.  Not the normal route of advertising you’ll agree, but I naively believed that rescuing a poor soul from the cold, mean streets, providing warmth/hot water and hoping that the influence of positive, working tenants may just pay off.  Only one of those homeless people is with me today, the others cocked up the tenancy quicker than I could hand over the keys through bad behaviour, drug, alcohol or girlfriend abuse and the usual non payment of rent.  Each was given a chance, several warnings and finally, for the sake of the other excellent tenants in the house, eviction.  I’m no expert on homelessness and this is just my limited experience.

The Dream…

So, not to be beaten, I’ve come up with another idea:  Should funds come my way, I’m going to buy a big house for between 6 and 10 residents who are either homeless, ex-offenders or anyone else who can’t get a tenancy due to a bad reference.  They’ll practice being a good tenant by learning to share communal areas respectfully, mastering cooking skills and how to wash up, tending a garden to provide for the kitchen, learn how to use a washing machine between the hours of 8am and 10pm, how to hand over their LHA (local housing allowance) bang on time and how to budget the rest of their money.  On top of this they will be expected to undertake a set amount of hours voluntary work so they have something to get out of bed, washed and dressed for.  If they can prove themselves capable of becoming a decent tenant, they can then apply for a room in one of my shared houses and, when they’re ready to move on, will have a glowing tenant reference, a work ethic and essential life skills.

In my dream, it’ll all be happy and cosy and we’ll laugh round the piano singing old songs – but I know that if I make this a reality it’ll be a 40% success rate because, from my experience, having responsibility for one’s own life can sometimes be just too much.

This post is not to elicit abuse or promote a debate, however if you have a spare half a million quid or words of support for the idea – I’m all ears!

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Tenant Referencing – HMO Style

Every time I hear the words “reference checking” it implies mounds of boring paperwork which will never give you a true picture of your prospective tenant, only an overview if things aren’t quite right on paper.  I’ve been prompted to write about this subject after a friend of mine asked me to let out her 3 bedroom property for her (for a fee!).  The responsibility is huge and it forced me to look at my current tenant check process bearing in mind her tenants are hopefully going to be far more upmarket than mine.

My Tenant Check Process

I tend to reference check on the following basis:

1. Can the tenant complete the Tenant Information Particulars form legibly?  i.e. can write own name that I can read

2. Does the tenant have someone to call “Next of Kin”?  Surprisingly sad when there is absolutely nobody the tenant can name who would want to accept a body or bad news

3. Call employer to check the tenant turned up for work this week and hasn’t so far displayed signs of drug abuse or a violent disposition

4. Does the tenant have a bank account?  A fairly good sign if so.

5. Previous landlord – to be honest, tenant could give the mobile number of his mate and I wouldn’t be any the wiser but more believable if I don’t understand what the landlord is saying

6. Gut reaction – this is a well honed technique from my Bed and Breakfast days.  It hasn’t let me down and I’ve taken on people my gut told me I shouldn’t but they’ve provided me with the best stories!

7. Can they stand up to my version of the Spanish Inquisition?  If they can hold eye contact, answer questions without hopping from one foot to another and don’t snigger when I tell them the rules of the house I know that we can communicate at the very least.

A Tale of Two Tenant Checks

Here is a tale of what happens when the above process was applied a few months ago:

Two people, oddly enough both named Steve called me, desperate for accommodation.  Steve number 1 jumped through all my paperwork hoops, Spanish inquisition techniques and (I thought the impossible) a letter of rent guarantee.  He turned up, bang on time, with a deposit, completed paperwork and 4 weeks rent – he is my hero and may just have enabled me to pay the mortgages next week.  Later turned out to be my pain, see Steve Messes Up.  Gut told me “no” based on him telling me he was an ex-gambler but I wanted to help and his actions told me he really wanted this.

Half an hour later I went to meet Steve number 2.  His paperwork was incomplete and had only managed his name, his work reference was abysmal (didn’t turn up to work in a hotel and nicked money, but the manager very sweetly invited me for coffee) and there was something just not right.  He’d been referred to me by another tenant who met him through AA (Alcoholics Anonymous, not roadside assistance) but was scant on where he’d been for the last few months claiming the pub he lived and worked in had burnt down – presumably taking the forensic evidence with it.

Decided to take Tom (one of my larger lads who had nothing better to do that afternoon) as I had my young son with me and felt Steve may decide to hit me when he found out I wasn’t going to let him in.  I told him what I’d found out and, before you could say “you ain’t going in that front door, you scoundrel” he ran off down the road as fast as his legs would carry him!!!!  That really is a first.

Reminder

I have a constant reminder of that day as I ruined my wheel trim (the silver disc that covers the nuts?) as I hit the pavement at speed because I didn’t want to be late for the appointment.  Every time I look at that wheel I remember him and the importance of reference checking.  Happy times.

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That’s It! I’m Going to Rent!

I’ve just about reached the end of my tether and have decided that renting has just got to be an easier option.  This week the following problems have jumped to the top of my maintenance schedule pushing all the others that have been patiently waiting right to the bottom until I have the money:

1. Three bed terraced house deserted by tenant who was offered council accommodation – besides dog poo in the garden, changed locks, doors hanging off, carpets ripped and evidence that she mistook the house as the local Tip – estimated bill to put right £2,500

2. Broken gutters and new damp course in another family home – tenant has been very patient whilst I’ve saved up the money to get the work done before the winter – £1,500 bill

3. Just received an email from a tenant asking which fence boundary we own.  Guess what?  We own all three sides!!  Without needing a phone call, I’m guessing a fence has blown down in this week’s wind – estimate £100 – £500

4. Roof leaking on an HMO – £1500 to include scaffolding and repair damage

That’s nearly £7,000 in one week and could have been an awful lot of shoes.  This is ongoing proof that most Landlords DON’T MAKE MONEY if they’ve got a mortgage and a conscience.  Wouldn’t it just be fantastic if, the next time my boiler failed or I found a damp patch in my own home, I could just pick up the phone to the landlord?  No idea how to pay as none of these can be put on a credit card – (sensible) suggestions?!

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Back To School – Yay!!!

I’ve made it through another summer holiday!  Through prioritising, ranking tenant’s calls between “urgent” and “they’re so pissed they don’t know who they’re dialling” I managed to beg, bribe and stall tenants and kids to get the job done.  So, it’s with great relief to us all that school has thrown open their doors ready to impart academic excellence on my children.  Thank you!

Tenant Changes

Only one room abandonment, one case of unacceptable behaviour  and two washing machine leaks in 8 weeks – I must be getting better.  However, it cost me two playmobil toys, several cakes and magazines and a promise that “It’ll just take a minute” – and that’s just to the kids.

Despite my sixth sense telling me that Barnaby was about to do a runner, advising him on claiming housing benefit and listening to why his life had fallen apart, not 24 hours later and…………………..he’d done a runner!  He kindly left me several topless posters, countless filled condoms and a filthy mattress – it was a wonder I didn’t get pregnant taking it to the tip.  By the time Housing Benefit had processed his claim, put the money into his account, then it was left to me to inform them that he’d gone AWOL (Absent Without Leave for non military types).  A clean, a paint and a new mattress and the room was rented out again.

Unacceptable Behaviour

Treated the kids to a trip to London and a show to come back to a call from one of my bigger tenants “There are 2 incoherent blokes in the kitchen and if you don’t get rid of them you’re going to need to wipe blood off the hallway”.  So 12.30am I’m off to confront two scruffy but swaying strangers attempting to intimidate my tenants with slurred threats.  Luckily, no one understood them and they were gracious enough to leave when I asked.  Turns out their “mate” was comatose upstairs oblivious to the fracas they caused.  Pissed? Stoned?  Who could tell, but they were not nice.  Spoke to said tenant in the morning about “being responsible for visitors” and, this not being the first time, suggested he find himself somewhere else to live where he wasn’t going to upset other people who had to get up for work the next day.

These two incidences are typical events in the life of an HMO landlady/landlord.  I’ll be writing more about the Housing Benefit claim flaws and ways to deal with antisocial behaviour (legally) in future blogs.

New Year, New Me!

As the academic year gets underway I have vowed to work harder, smarter and stay two steps ahead of the houses.  I’m helping out a commercial landlord who lets multiple units in two business centres (it’s much the same as HMO just less swearing), been invited into a business deal involving one of my tenants (just checking the legalities) and have a brilliant idea about office sharing.  Stay with me, it could be a fun ride!

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