Any landlords here ?

[HawkEye244]

Hi all,
I'm selling my rental after 7+ years of keeping it going. It's 4+ hours away from where I live myself, so managing it has never been easy. It's not just a quick pop in to fix a washer or sort out a bit of carpet.

In my time I've done the letting agent route and managed myself. To be brutally honest either option has been just as stressful, perhaps in slightly different ways.

I'm curious to hear from any long distance landlords how you manage to keep it going ? I've found letting agents to not be worth their salt most of the time. Poor communication. Not actually helping very much when problems crop up. Overhiking quotes for work, the usual really.

Poor letting agent performance is not the only reason I'm selling. I just realise that self-management is the only way to give a proper level of care to the tenant and nobody else is going to go that extra mile except me. It's fine when things are working out but when even the slightest problems arise I've felt completely on my own.

The way the market has gone has made me feel totally powerless and alienated. Fortunately I've never experienced any arrears but the most recent tenant has been difficult in terms of hygiene and coronavirus regs has made a bad situations worse. The property is being trashed.

Any insights to share ?
Let's not make this a political discussion if possible?
Many thanks

 

[durhamplumber]

Hard to generalise...But...Usually...A Nightmare!...I tried it..If one is lucky with a good tenant...Happy Days...They are increasingly rare..As you say it is generally very stressful.I do gas checks for various landlords and letting agents and horror stories are ten a penny..And yes some letting agents are just as bad as nightmare tenants.Houses were so cheap here at one point, landlords from down South came up in their camper vans and parked up outside to sort properties out.

 

[Mottie]

I rented out our commercial premises between 1995 and 2014 to two different tenants - an electrical contractor and a builder. Never had any problems and they always paid promptly. I basically told them that any repairs or problems were down to them and not me. The builder even replaced the whole roof during his time there. No formal leases as such but the terms were understood by both of them. When the first tenant had to leave, he completely cleared it out before leaving and he wasn’t held to any specific length - I think he was gone within a month of telling me. When I needed the premises back for myself after the second tenant had been in for about 5 years, I gave the builder a couple of months notice and he was out before then. Maybe I was lucky? On the other hand my Aunt and Uncle bought a pub so they moved out of their house and into the pub and rented their house out. They got no money for about 18 months, it cost a fortune to get the tenants out and another fortune to put right the damage and mess they made. That put me off of ever buying a residential property to rent out.

 

[HawkEye244]

Thanks for your thoughts guys keep them coming.

Sorry to hear about some of those negative stories. It's definitely not an easy game to be involved in. Not a quick buck by any means.

 

[Ihavenojob]

Will you be selling as a going concern with the tenant in, or getting them out and just selling as a house/flat ? I worked for many years in a lot of rental properties, I do feel sorry for landlords.

 

[Diver Fred]

Yes, been a LandLord for 40 years this year. Waiting on Green Homes Grant results before I make a decision on what to do next.

Self managed for the first 22 years (Registered Tenancy so made little profit). The had an agent for 8 years until I questioned one of their actions - the opening sentence in their reply was "You've caused me work" 2 rent periods later they were sacked! Self managed since then.

With the changes to building standards imposed on Landlords and all the extra items to test I've decided I'm either selling up or converting the 2 cottages into one and moving in. Either way I'm out of the business before 2023! The next level of EPC changes will cost me the last 10 years profits just to complete - that is how narrow my margins have been.

I'd not recommend anyone becomes a LandLord nowadays.

 

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[Vinty]

Too many regulations around letting a residential property.
A builder i knew was sued by one of his tenants who broke his leg after allegedly tripping over a crack in the garden path.

Despite the next door neighbour telling the builder that the tenant had broke his leg after falling down the stairs while drunk, the builders insurance company still paid 5 grand to the tenant on the grounds that although the claim was probably fraudulent it would cost more to take the tenant to court.
I was surprised to find out that if your tenant injures themselves on your property they can sue you for compensation.

 

[transam]

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[diy_fun_uk]

I'm a landlord. Started with one property and went down the letting agent managed route. After a couple of years I realised, for the % they were taking, it wasn't really worth it. And as you say, with quite a few things my involvement was still required anyway. And yes, when they suggested using their own tradespeople the prices seemed on the high side. So on balance I decided self management was the best option for me. I'm fortunate in that my properties are local to me. If I had gone down the route of buying properties that were e.g. 1.5+ hours away, I'd probably have factored letting agent management costs into the model, simply due to the distance. However a major factor in me not buying properties miles away is due to the aforementioned.

There is a misconception that all landlords are loaded. My understanding is the high majority of landlords have 3 or less properties and most are mortgaged. Sure there are landlords that do make a pretty penny, however that's not the case for most. So many variables as to how profitable it will be. For example in my area and for the type of properties I rent out, monthly rental income has only increased by 8-10% since 2007. Deduct outgoing expenses, tax etc and the 'profit' isn't as significant as some would believe. And it's getting more expensive to be a landlord, less tax breaks, more regs to comply with etc.

Oh and let's not mention how any profit can be wiped out in a given year or years if a landlord has a tenant who doesn't pay and/or leaves the property in a negative state.

I still use letting agents to source my tenants (let only service) as this gives me a small degree of comfort that at least some checks have been completed as oppose to the proverbial sticking a card up in a shop window with 'flat to rent' scribbled on it. Although it's still a bit of a lucky bag (finding good tenants) I have little sympathy with landlords that cut corners with sourcing tenants and then moan afterwards.

It also frustrates me that quite a few 'landlords' out there still fly under the radar when it comes to reg compliance, being registered with local council etc. Generally, they make more profit. I've always done my best to be a decent landlord and to comply with regs. Less profit? Perhaps, however I prefer doing my best for my tenants. You end up being a bit of everything sometimes. Handyman, peace negotiator, the lot!

And as for those who don't agree with anyone being landlords, I'll say this. My properties are in good condition. They're safe and reg compliant. My tenants are charged a fair rent that has increased by under 1% a year. There still aren't sufficient social houses for everyone so where do people go that either can't afford to buy or don't want to e.g. moving about due to work? Landlords plug this gap. It can also be argued that ever increasing regs are leading to many getting out of the game. The end result? Less rental properties. The landlords association warned the government this would happen. Even now, in my local area, there are many more people looking to rent than there are available properties. Of course properties should be safe, clean, warm etc, however the increasing number of hoops landlords need to jump through is becoming ridiculous. And as I say, there are still landlords that manage to fly under the radar, so as usual it's the honest landlords that end up with less profit. Oh, and I'm not embarrassed to use the word profit btw, after all it is a business, not a charitable endeavour.

It does seem to be the case that tenants have more and more protection, landlords less so in some aspects at least. e.g. I think they're considering a national register of landlords that tenants can check to determine if the landlord has any complaints against them, not meeting reg compliance etc. I would argue there should also therefore be a national register of tenants for landlords to check, however oh no, this would be against GDPR etc. And I recall the Labour party floating an idea a few years back that tenants should be able to apply to purchase the rental property they're in, at a fixed market rate ... whether the landlord actually wants to sell it or not! So, for someone like me who's ploughed a lot of my hard-earned into my properties, and for which they form a part of my retirement planning, you can imagine what I thought of that idea!

Landlords will always divide opinion. Would I get into the game if starting out now? Probably not, I'd direct the money I used for deposits into something like S&S ISAs.

 

[HawkEye244]

Very interesting insight. I was worried when posting this that there may be a risk of running into a confirmation bias scenario. And I don't want everyone to agree with me. But I'm clearly not not alone in how I feel about the market.

Ihavenojob - I'm doing my best to sell while making the life of the tenant as stress free as possible. The best scenario is the one that works for everyone. Besides destroying the property the tenant does at least pay and apparently he's working up a deposit for a home of his home which is good. Just taking his sweet time about it. Him being in the property is massively putting buyers off. I've lost count of the bad feedback from potential buyers. Impressions do matter.

What has been incredibly insightful is that in my attempts to gain a better understanding of my tenant I constantly run up against GDPR issues with the letting agent; and this is me trying to help the situation not use information maliciously. What I've learnt is that a letting agent can put anyone in there and you have no right to know anything; or its limited to what you're given from the agent. It's probably the most alienating experience I've ever been through as it feels like the home I've worked to buy has been taken hostage by both tenant and letting agent.

I've settled on the fact that I would consider selling and buying something more local to me if it means I can attend to the tenant to a high standard as I know I can. I've had so many tenants over the years and received praise about my efforts in sorting problems and reacting to them quickly. I suppose the reality is that no landlords have it easy and the ones that manage a property long distance are probably lying about how easy it is.

 

[Doug99]

My son rented out a property a few years ago, but despite his best efforts to ensure long term tenants were vetted, he was stung badly by bad payers so decided to change focus.
He now owns (mortgaged) 3 HMO properties which he rents out to students. Fortunately he lives in a university city so there is no shortage of tenants. The advantage being that students get grants/loans for accommodation and they pack up and leave at the end of each academic year.
During the summer break the properties are let out as short breaks via AirBnb.

 

[conny]

We rent our home and I have to admit we have a great landlord. We are his first tenants in this property since he bought it almost 6 years ago.
The interior needed sprucing up, (paint & paper), and the garden was overgrown but we asked if we could see to these things and if he wasn't happy he could then send his guys in. He was amazed at what we have done to the property and now pretty much gives us carte blanche to do what we want. However, we always insist on asking permission and giving him written details about any of our projects. We also ask if he will come round to discuss them with us before giving the go ahead just so there can be no mis-understanding at a later date. He's a good landlord and we try to be good tenants in return. I think we both achieve that happy status but agree that there are bad on both sides of the fence and it must be difficult to be a good landlord if you have carp tenants.

 

[Mottie]

@conny. What happens when you are no longer working - will your pension cover your rent and living expenses or will you have to downsize?

 

[conny]

Hopefully my pension will cover the standard expenses but I intend to carry on working as long as I am able and enjoy it and when my FIL passes on we will be taking over his bungalow.
Hopefully that won't be for a good few years though.