Tag Archives: rents

Keeping Track of Rents and a Hot Tip from HMO Landlady

How do YOU track your rent payments?  If you have a few properties, the due dates and tenant names are probably buried in your subconscious to be flagged up on or around the day the payment is due.  However, if you’ve grown your portfolio – be it single lets or multi lets – your poor brain can only cope with so much data as daily To Do lists vie for your attention.

With 34 rooms on the go I don’t need a rent alert – I have an inbuilt one when I enter a room and the rent isn’t there. I have two rent collecting days: Saturday and Monday and for eight years most tenants have become institutionalised enough to know where to leave their rent on which day.  I pick it up, leave a receipt, a copy of which stays in the rent book.  Hardly cutting edge, but the philosophy of “if it ain’t there, you ain’t paid” has served me pretty well and I can make a chase up call within a few seconds.

With the popularity of internet banking, this means more enlightened tenants can set up a standing order to pay weekly, four weekly or monthly and I just spend a few minutes checking them off – but into what?  There’s no point writing a receipt as the proof of payment is on the bank statement so I use an Excel spreadsheet to record payments ready for calculation at the end of the tax year.

Again, this works to a point.  The danger is when a tenant decides to combine the two and pay the rent in cash over the bank counter and, in this instance, my bank won’t allow a reference from the payee.  Anyone unable to set up a standing order or declines the cash collection option, normally has a sporadic approach to paying their rent i.e. they do it when they’ve got enough money and happen to be passing my bank on the way to the pub.  It’s easy to track one or two over the counter cash transactions but any more than that and, to be honest anyone could’ve paid, and I spend time tracking down the tenant and the date the rent was really due – it’s easy to sneak in a free week or two with this method.

The Future?

My partner recently won a contract to let and manage twelve student lets which converts to 64 tenants in addition to all his other single lets.  After a summer of madly getting all the buildings fit for purpose, it became clear that an Excel spreadsheet and monitoring online payments just wasn’t going to cut it – mainly due to the students referencing their payments as “RENT” – no source name and no property reference.  We’ve had evenings of tearing our hair out with frustration, especially as the students were in no hurry to complete any paperwork or make payments until 5 minutes before Fresher’s Week started.

I’d been playing around with the idea of building a database for a while as I’m sure I’d been on an Access course about 25 years ago which is probably when it was first invented.  After f**ting around at the design stage, we conceded to Rent Pro who seemed to have done most of the work that I was trying to achieve already.  It’s not particularly sophisticated in it’s overall look and design but it does the job at £78 a month which is cheaper than getting someone to build a database or dealing with my stress levels.

It’ll throw up overdue rents, rent review dates, AST end dates, landlord reports, property reports and so much more!  However, like anything in life, the information it chucks out is only as good as the data you’ve chucked carefully entered in.  I’m still playing around with its capabilities but each day enlightens me a little more and I can see that I will eventually be able to press a button and it will spew out a property’s latest rent report, making me look fabulously efficient.

Hot Tip

Lastly, I would like to thank The Property Podcast for featuring HMO Landlady on their first Property Investment tips and advice podcast which was broadcast on 2nd October http://thepropertyhub.net/tpp080-property-investment-tips-advice/.  I love podcasts and have been a listener of the Property Podcast since they launched eighteen months ago. I’ve picked up some interesting property nuggets whilst walking the dog or watching the kids at swimming.  These types of podcasts prove that routine tasks can be turned into important information gathering sessions and I like the way Rob Dix and Rob Bence bounce off each other, don’t try to sell unrealistic dreams and sift through all the geeky stuff on the internet to recommend tried and tested resources to their listeners.  Rob Dix is a self confessed geek, is a journalist and landlord by trade – all professions he can do whilst appreciating the beach from any global destination.  Rob Bence, by comparison, is voluntarily tied to the desk of his successful UK based RMP Property and together they are bringing sensible property investment to the ears of the masses such as you and me.

The Property Podcast lasts around 30 minutes and is released on a Thursday

Property Investment Tips  lasts around 15 minutes and is released on a Friday. http://thepropertyhub.net/?powerpress_embed=4814-podcast&powerpress_player=default

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Another Gambling Addict

With half term finally over (which school managed to stretch to a 10 day break) and the children back to learning how to be decent, upstanding citizens, I’ve turned my attention back to HMOs.  My tenants aren’t so well behaved that they stopped locking themselves out of rooms or remembered to pay on time and I’d let my passable organisational skills slip over the holiday, but I’ve bounced back with a whip in one hand and a To Do list in the other.

Andrew

First to screw up his new tenancy is Andrew.  He was the tenant that I predicted to bite me on the bum after being recommended by his work colleague as a suitable tenant for my emotionally rejected but testosterone fuelled lads’ (actually middle aged men) house.  Youngest of them all he soon played the foster child card as an excuse for not knowing how to wash up, flush the loo or realising that revealing your boxer shorts whilst your trousers are tied precariously under your bottom cheeks isn’t a great look when going for a job interview.

Last week he said he’d left his rent for me to collect but my son decided to have a massive tantrum during the rent collection round which meant I was distracted and was so busy dragging him out of the house that I forgot to go into Andrew’s room.  By the time I went back a couple of days’ later it had been spent.  Taking some blame for my folly,  I agreed for him to leave 2 weeks the following Saturday (£180).  Then I forgot again that I was away (took the Sleeper train to Scotland – great trip) and collected all rents a couple of days later by which time there was, of course, no money.  To his credit, he called me into his room, looked up at me with his big, brown eyes, quivering lip and a little tear to add to the effect and confessed to having  gambled away £400 on fruit machines the previous week.

Where To Go From Here?

Now, this isn’t the first time I’ve come across this addiction so was able to restrain myself from “Do you know how many shoes/supermarket shops/meals for starving children that money could have bought?” and sternly reminded him that his future was in his hands – go into arrears and get legally evicted or pull yourself together, stop thinking I’m a soft touch and be grateful you actually have a job (albeit a somewhat dodgy one).  Followed by a therapy session, which normally makes grown men cry, he promised to contact Gamblers Anonymous and pay £250 this Saturday.  In the meantime, there is little I can do but have a little faith in him as he’s still in his fixed term period and give him a good talking to which he takes with dignity.  He then went off to pawn his iPad after telling me he didn’t want to end up like his two brothers who’d spent most of their young lives in and out of prison.

Now, I’m not being unsympathetic about the boy/man’s plight (he’s 22 but looks 17) but just because I’m a woman tenants who have developed chaotic lifestyles following their disruptive upbringings always seem to play the “woe is me, nobody has ever loved me” card.  It’s probably true which is how they’ve learnt to say what they think I want to hear in the hope that I’ll feel sorry for them.  I used to cave in but now remind them and myself it’s a tough world out there and with a bit of support it’s possible to survive.

To Conclude

Talking of survival, I have serious doubts over this tenant’s chance in the natural world:

Marco (Polish sommelier for a 5* hotel) “Can you look at my light.  It come, it go, I think it very dangerous”.   Dispatched the builder who made the mistake of hanging around for too long while I took the call and he reported back “It’s the bl**dy bulb!  Couldn’t you have done it?”.  Nope, I’m too busy unlocking rooms and providing free therapy sessions.

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2012 Looking Positive for Tenants!

For the last 5 years January has tended to be a month of tenant depression and apathy.  Casual work is near existent or thin on the ground, most were paid before Christmas so have had to survive an extra 1 or 2 weeks or, as in most cases, it was all spent during Christmas and New Year.  Typically, I’ll have at least 3 tenants starting the month with “Err, can’t pay the rent because [delete as appropriate] I needed to get my girlfriend a very expensive present/I wanted a top of the range mobile/dunno, just don’t have any”.  It’s OK, I budget for this and they usually catch up by the end of the February [if they want to stay!].

But not this year!  Maybe it’s the winter sunshine, maybe it’s because no one can sink any lower in terms of job prospects or maybe they realise the Government training schemes won’t give them a job and they’ll have to do it all by themselves.  The recession in 2008 seemed to hit my tenants first – no longer able to pass themselves off as builders, kitchen fitters or painters as they did in the boom years due to plenty of work and a shortage of decent, qualified people to do it.   Four years of moaning about “this bl**dy country” and no jobs for the unskilled, yet not a peep about the rising cost of beer, they’ve had to learn to be more creative with their job search.

David has finally got himself a retail job in a health food shop (a complete antithesis of all he believes in!), Nadine has become involved in setting up a drug rehabilitation project to further her volunteering skills, Justin’s doing well at his new charity job selling subscriptions on the street and Zitomir (the mad Czech) has been working hard doing “security” and been very quiet after inviting my children to meet his non-English speaking children and “perhaps we could turn it into a date?” idea.  Even Tom is fired up with a new project: having realised he’s not very employable but has some creative skills he’s going to renovate unwanted furniture and sell it on.  I’ve given him a couple of pieces to start with and told him to research the local vintage shops (which are springing up all over) and Ebay.  In fact, Ebay is a bit difficult due his lack of computer skills and, er, computer.  I suggested he gave a house mate 10% of the profits to list any pieces for him.

Alas, the same cannot be said for my Romanian Border Guard.  His command of English is outstanding, his work ethic beyond reproach and he’s always well presented.  He’s desperate to get a card that allows him to work legitimately in the UK, rather than the 4 hours cleaning a day he does at the moment, his paperwork is in order, but the powers-that-be have refused to grant him the necessary permit.  He says that, according to his compatriots in London, it’s because he’s Romanian and the UK Government have issued an order, just before Christmas, not to give any Romanian nationals the right to work here.

On another note: according to the tenants, CSCS cards (permits that allow one to work in the building trade) can be bought from a bloke in the pub for £110.  Alternatively, you can be conventional by studying  the Health and Safety manual and take it up to 3 times free of charge!

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Caroline, The Wicked Witch of my HMO

Last year Caroline, a lady of mature years, joined the HMO having appeared out of nowhere – been living abroad, no visible means of income and no next of kin or family. I thought she’d be a good influence in my house of testosterone fuelled “boys” and might calm them down a bit (or at least show them the importance of putting the loo seat down).

Almost as soon as she moved in her interrogation of each tenant and interfering opinions raised the boys’ hackles and they took to phoning me surrepticiously from outside the house to complain about her.  The main accusation being that she was a “plant” from the Social as she wanted to know what each of them did for a living and, god forbid, their surnames and ages!  I assured them that, having watched a recent programme about benefit fraud, that the Social were more likely to be sitting in unmarked cars outside the house decked in sunglasses, cheap jackets and holding a camera.  I was pretty sure that the Council budget didn’t stretch to actually putting their staff into shared housing (although not a bad idea?).  Did the boys have something to hide that I needed to know about?  After that they went quiet.

Suffice to say that, although she stayed for a year, she spent just about every rent collection appointment complaining about the other tenants’ activities from stomping around at 5am to rampant all night sex sessions.  I pointed out that, as she chose to live in a house of 20-40 year old single blokes -what did she expect?  We got on fine until the day she accused the others of being “cockbuddies” and ganging up against her.  I’m not sure what that term means but it points towards a certain comaraderie which is only on display  when one of them is being threatened by an outsider.

When she left in the summer this year she sent Tom a letter pointing out his shortcomings, accusing him of being a psychotic alcoholic and suggesting that he needed professional help.  He agreed with most of the points she made, we had a chuckle over the fact she was clearly mad and I would’ve left it until she wrote “and you’re taking advantage of a simple woman [me]”.

All was forgotten until we cleaned out Steve’s room over Christmas and found the following letters:

“Hi Steve

I don’t know what you said to Serena on Wednesday but thanks a million.  I have to say that Tom’s behaviour last Friday was pretty mild compared to some of the stuff I’ve had to listen to from him.  What really winds me up, though, is that he always accuses me of tweeting or texting Hmolandlady [not my real name!] which is something I never do – I try to avoid her.  He’s the one who is constantly contacting her to complain about other people in the household (usually me) and the silly woman believes him.

Cheers, Caroline”

There was another far more long winded letter following the incident of Tom attacking Steve and it finished:

“She said no one had told her that you were smoking pot, she’d walked in that morning and smelled it for herself.

She complained about the way you’d behaved the morning that she gave you notice.  I said it was because she’d woken you from a deep sleep.  She said that she’d be quite happy for you to stay in the house if you only phone her, said you wouldn’t do it again, etc.  She’s still paranoid about people who do pot but she’s even more paranoid about people smoking in the house and I suppose she’s got a point there.

So….there you are.  Please don’t leave this lying around where a certain person can find it”

Caroline”

I’d given her the benefit of the doubt, put the clashes down to age difference and told the lads to stop being neurotic.  I now realise she was pure poison to that house and upset more people than any unhinged drug dealer has ever managed to do.  Think I might just send the letter on to show her that I DID find it!

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Am I Really Guilty of Breaking the Law?

Landlord Law Blog posted an article about rent books this week which I read with a mixture of interest and guilt.  Since falling into running HMOs I’ve been vaguely aware that it’s a legal requirement for landlords to provide rent books to tenants who pay on a weekly basis.

About once a year I think “I must provide rent books so I don’t get thrown into jail” but the following questions always nag me:

  1. How often will my tenant remember where their rent book is?
  2. Will they remember to leave it out with their rent each week?  I’ve spent years training them to leave their rent in a conspicuous place and don’t enjoy rifling through their underwear drawers or bedside tables to look for it (with their permission!)
  3. How often will I have to replace their rent books when they’ve lost them thereby losing their record of payments from the beginning of their tenancy?
  4. Who’s going to tell me off for not providing them?

I’m not being glib about the need for a record of payments, just about the method.  Maybe the tenants have total trust in me or maybe it’s ignorance but all they care about is that the cash is handed over to me and I provide the accommodation.  I issue a receipt for each payment received, a date for when the next rent is due and, if they’re short or overpay, it’s all recorded in duplicate so we both know where we stand.  Then, I don’t care if they wipe their noses on the receipt, use it instead of a Rizla or file it for safekeeping because my master book has all the payment records for all tenants dating back to the beginning of my landlord career (in case the Inland Revenue want a fascinating read!).

If a tenant is struggling to keep up to date with their rent, I’ll issue a rent statement showing their payment record which also goes onto their file so I can keep track of bad debt for accounting purposes.  Now, if all this sounds like I enjoy being organised – I don’t and have to force myself to stick a book keeping head on for an hour a week.  One tenant’s rent arrears statement runs into three pages when he got into trouble a couple of years ago.  I’m desperate for him to catch up just to save on ink!

The solution, of course, is to get everyone to pay monthly by standing order (excuse me whilst I pick myself up off the floor!) but then we’d miss doing what we do best – having a weekly gossip and catch up.  P.S.  I shall concede defeat and provide proper rent books in case any readers are planning to report me to………………….?

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How Far Do You Let a Tenant Run Up Rent Arrears?

In the normal world of landlording and legally speaking it’s recommended to allow two months worth of arrears to build up before issuing any notices.  However, this isn’t normal landlording otherwise everyone would be doing it!

Every Saturday, my tenants hear my bailiff style knock on the door between 9.30am and 11am. I’m not so archaic that I don’t offer for them to pay by standing order but only one tenant does this – I’m presuming the rest choose collection so the boys can show off their pants to me every week. If I’ve trained them well, they’ll be clutching the cash as they open their door or, if they don’t want to be disturbed, leave it in an envelope poking under the door.

So, what happens when they aren’t proffering the week’s rent?  Again, if they remember their training they’ll have called me a day or so beforehand with a suitable excuse to which I’ll sound suitably empathetic whilst I wait for them to tell me how they’ll sort the situation out and by what date.  If they’re too scared to talk to me or have conveniently forgotten they rent a room at the address, they’ll go AWOL but that’s a different subject which demands an alternative procedure which I made up but is fairly effective.  Another time….!  The great thing about HMOs is that if one room doesn’t pay up the other rooms should be still covering the mortgage and bills so you can attend to the non payer without worrying about repossession or delving into your own bank account.

Liam – An Erratic Payer

Liam rents my bedsit in a licensable HMO.   It’s an attic room with it’s own cooking facilities and he shares the bathroom with everyone else.  He arrived on the doorstep two years ago – muscular, vertically challenged, bursting with testosterone, cheeky smile and looks rather attractive in his underpants (which I found out three weeks into the tenancy, it wasn’t part of the referencing process!).  Liam was a window fitter until the recession when events seemed to conspire against him.  He’s picked up a variety of jobs on building sites, shop work and anyone who’ll have him but it’s been fraught with contracts suddenly coming to an end, broken promises and his inability to manage money.  He received a tax rebate earlier this year when he was £350 in arrears;  I called him to discover he was on the bus to meet some friends “but don’t worry it’ll be there on Monday”.  Was it heck.  He said his mates got him so drunk that he’d blown the lot at the casino – “I felt such a twat” he said.  Yep, he said it not me.

How far do you let someone go and how far do you believe the stories, show compassion, remember what it was like when you were young and rubbish with money?  I’m now short on goodwill after he phoned me on Sunday about the “stupid ****ing council won’t give me housing benefit!  What do they expect me to do?  I’d wring their ****ing necks if I could get past the bullet proof glass!”  It was my day off enjoying a bit of retail therapy and I so wasn’t interested in another set of excuses …. and told him.  “In that case” he said “I’ve got no other option but to do what my mates are doing and sell drugs but don’t worry, I won’t do it while I’m at your house”  Gee, thanks. However, I’m not worried for the existing street dealers just yet as he has as much ability to blend  into dark alleyways to do a deal with a junkie as a market trader advertising the catch of day.

I’ve given him a flexible payment schedule, bunged him a fiver when he had nothing to eat and no parents to call on (I’m such a sucker for orphans), a shoulder to cry on and offered cheaper rooms.  I’ve made him sound like an arrogant idiot but he’s lovely and I’m just annoyed that he hasn’t sorted himself out and is trying to rile me with the drug threat.

It IS possible to make money AND be compassionate when dealing with HMO tenants – the two are not mutually exclusive.  I make my entry level costs to a room affordable i.e. £150 deposit plus one week’s rent in advance, unlike other landlords who demand one month’s rent and one month’s deposit in advance – now that’s alot of money.

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Steve Messes Up

Here we go again – another tenant decides that his accommodation isn’t that important and decided not to leave his rent for me.  Steve came to me as a friend of another tenant a year ago.  He’d had two failed marriages, various children and was desperate for accommodation and, to be fair to him, admitted upfront that he was a gambling addict.  We agreed that he’d ask Housing Benefit to pay his rent direct to me and he’d provide a guarantor as a back up.  The first hurdle was to actually get the Housing Benefit team to give the money direct to me, so when he couldn’t provide proof that he was an addict (note from Gambler’s Anonymous, that kind of thing), he told them to give him a fiver and he’d show them what he’d do with it.  That seemed enough evidence to the Housing Benefit agent and I received his Local Housing Allowance minus money he owed for a previous claim leaving a shortfall of £76 a month which I was concerned was too much for him to deal with.

First Offence

Steve had become increasingly difficult to talk to .  When he started his tenancy he was quietly spoken (I’m as deaf as an old post) but smiled and was charming.  One morning I opened the front door of the house to be blown away by the stench of marijuana.  I absolutely hate the smell as it gets into everything and affects my ability to concentrate!  I adopted my best Nancy Drew tactics (1970s teenage fictional detective), sniffed each door and realised it was coming from Steve’s room.  Answering the door, he opened it and just said “Yeah?”.  “Please meet me in the kitchen” I said – I never go into a tenant’s room and close the door especially if they’re male.  He was so stoned I thought he was going to pass out on the vinyl so I explained the zero tolerance drug rule to empty eyes and followed up with a Section 21 notice.

Justice?

A couple of day’s later I got a call from Tom (one of my bigger tenants).  “Look, I only shoved ‘im a little bit, but he was calling me a grass and was bein’ rude about you”.

“OK, so no damage done?  He’s not going to like me because I’ve asked him to leave” I replied.

“Yeah, but he finks I grassed ‘im up to you, but I didn’t.  That smells been around for ages and we all ‘ate it, but I didn’t ‘urt ‘im, ‘onest”

“OK, but you shouldn’t have got involved as my girly brain managed to work out where the smell came from all by myself so you can tell him no one grassed him up” (For big boys they can be a bit wet sometimes)

Two weeks later I got a call from another tenant “Why haven’t you done something about that animal Tom?  He beat Steve and broke the sink and they looked like they were going to murder each each other!”  So, back I go – “Did anyone actually hit anyone?  If so, did anyone call the police?”  Silence so I let it go.

Moving Room

Six weeks later, Steve had gone back to being his charming self and there’d been no drug odours so we had a chat and he asked to stay.  My lovely, big front room became available and he begged to be able to move in.  I knew that the back room he was in was darker and, being home all day, probably quite depressing also he seemed to want to make a go of his tenancy.  However, it was substantially more expensive and it meant he’d have to pay £112 a month top up but he assured me it was fine as he’d be working at the car boot fairs.

Second Offence

His top ups have been sporadic to say the least – never there on time, bit of cash here – bit there.  He asked me if he could pay me the following week as he was going clubbing in London and needed the money but absolutely promised it would be there the following week.  It was his friends who last week caused me to be called out at 12.30am so, with no rent there AGAIN this week and £112 plus £57 carried over from last month still owing in rent top ups, I’ve got no choice but to ask him to leave again.  I also heard he’d been saving hard to go clubbing in Spain……..

Helping Others

We’re taught as children by grown ups and the Bible that we should help our fellow man wherever possible, but it’s people like Steve that feed the cynic in me and make me vow never to help anyone again.  I’m not quite ready to offer him the other cheek to slap though.

Matthew
5:39
But I tell you, Do not resist an evil person. If someone strikes  you on the right cheek, turn to him the other also.

Matthew 5:40 And if someone wants to sue you and take your tunic, let him have your cloak as well.

Luke 6:30 Give to everyone who asks you, and if anyone takes what belongs to you, do not demand it back

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