Archive | October, 2011

Assess Tenant Demand Before You Buy Rental Property

26 Oct

Today I couldn’t resist – I had seen a 65k building going to auction with a predicted annual rental income of 22k. Yes – a whopping yield of 34%. So I knew the area – and I knew it wasn’t particularly salubrious – but at that sort of yield it’s got to be worth a look…

So what do you get for 65k…well you get 6 x 1 bedroom flats – with a market rent of c£300 per month per unit.

It’s a HUGE building…which goes on and on…and on and on!!


Let’s just take a look from the rear:

Admittedly it lacks any kerb appeal and it’s neglected and in need of some TLC…but just think of that yield!

So I checked the market rents and I saw we had let 1 bed flats previously in the area for £350pcm, so £300 seemed pretty realistic.

BUT…then I decided to check how long the previous flats had taken to rent – and it had taken approx 8 weeks – this is against an area average of 1-2 weeks.

I then checked the number of enquiries we had had on the previous flats we had let – and it was single digits. Again, our area average is at least 20 enquiries per property.

These two additional facts are key – and made my mind up – the demand isn’t high enough for this type of property in this area.  If this property had been situated in a different part of town I  knew these type of units would fly (even with the lack of kerb appeal) but in this part of town people are looking for 2 bed houses and not 1 bed apartments.

So my takeout is – don’t just look at the figures – because they may stack up on the surface. You need to drill down and look at wider factors. Work out if the type of property you are planning to buy will let to the sort of person you are planning to let to. There is no point having a huge building with the potential to earn a great yield if it remains empty for most of the time.

A Day In The Life Of A Landlord

14 Oct

Today I planned to get some paperwork sorted…or so I thought…this is the typical unknown quantities which you enter into when you decide to become a landlord:

9:30am: I get a call from my solicitor to tell me that given the tenant has not left the property we are evicting him from we now need to apply to get the bailiffs in. I agree and say I will wait for the paperwork and date for the bailiffs.

10am: I get a call from a tenant who has just moved into a flat to tell me that the glass in the entry door has been broken. It’s an old stained glass door. I’m not best pleased and I suspect the culprit is the guy I’m evicting from the other flat (see 9.30am call).

10.15am: The contractor cannot repair or mend the glass, it will cost over £150 per piece to replace – we’re talking thousands of pounds in total. We decide that he is to perspex over and make it safe.

11am: Contractor calls me to tell me the cellar door has been bashed in and is now hanging off it’s hinges. Again, I suspect it’s the tenant I am trying to evict, but with no proof I cannot do anything except repair it.

11.30am: Another tenant calls me very unhappy that the electrician who went to fix the immersion heater did not turn up to check why still not working  after repair job done the previous night. Spend the next hour trying to get hold of electrician. His phone is playing up and we have to do everything by text. The result – he tells me I need a plumber.

12:30: I call my friendly plumber to get him to attend and fix the immersion heater. Every time I call it just hangs up. I can’t work out if it’s my iphone or a fault on the line. I try several more times and then assume maybe he’s away.

12.35pm: I call round people I know locally (flat is 150 miles away) to get a recommendation for a plumber. None are forthcoming so I call a local letting agency who give me a telephone number.

12.45pm: New plumber is called, he can’t attend after 7pm tonight when the tenant will be home, but he can go tomorrow morning.

12.55pm: Tenant unhappy he can’t do the weekend and he wants it done tonight.

1.00pm: I use up credit with friends of mine who I know locally and ask them if they can allow the plumber into the tenants flat and babysit while work done if the tenant agrees

1.05pm: Tenant agrees. Plumber called back and it is organised for him to attend. Tenant then calls me to tell me he will also be there and will go in his lunch hour.

1.15pm: Plumber calls to say it is the element which has gone in the immersion tank and will cost £150 to replace. I agree the price and give go ahead.

1.45pm: Plumber calls again to say that they cannot get the immersion heater out and if they bang it any more it may explode. Immersion tank is too corroded for them to work on. I need a new one which will cost £350 +VAT and they can’t do it till next week. I’m a bit gutted but I console myself, that the tenant has an electric shower and so think to myself it will be a pain but he will have to wash his hands in cold water for a bit longer.

1.55pm: Tenant calls me. He is at the flat and he is furious. There is no water in the bathroom so he cannot use the taps, toilet or bath plus he still has no hot water.

2pm: Plumber tells me there is probably an airlock and that he will get somebody back there to sort.

2.05pm: Call another friendly plumber I know (in a different area) to do a price check to see if price quoted sounds OK for the new immersion tank. He agrees it’s a fair price.

2.10pm: Call tenant and inform him the plumber is on his way back to the flat to sort airlock, apologise profusely and assure him I will get it sorted. Tell him that we will get a new immersion tank but that it cannot be fitted in until Wednesday. He graciously accepts I am trying and concedes that will be OK.

2.20pm: Confirm with friend’s that they will be able to let plumber in next Wed and confirm with plumber the go ahead for the new immersion tank.  Tell friend’s that the plumber will be back with them soon as there is an airlock which needs to be sorted. They agree to hang on.

3pm: Call from the friend. The neighbour in the flat below has come up effing and jeffing and screaming like a banshee. Water from the immersion tank in my flat has now flooded into her flat below. She has called the management company and gone mad. There are now 3 plumbers at the flat with hoses trying to get water out of the system. She is going away tomorrow for a big work conference and is screaming and crying and going crazy.  I say “Nice try Steve but you are not going to wind me up today”. Steve is always pulling my leg as he knows how gullible I am. Unfortunately, he was not joking. It is real. Shit!

Steve has offered to make the neighbour a cup of tea in a bid to calm her down, but she only drinks Earl Grey which they don’t have. Steve has now gone to the shops to buy Earl Grey while the wife of Steve sits with the neighbour to try and calm her down.  Steve has called me while en route to the shops for the Earl Grey and warned me the neighbour is going crazy and demanding compensation. Shit!

3.20pm: Call from an estate agent to see if I wanted to view a good repossessed property they have just taken onto their books. I have to tell them now is not a good time and I will call them later

3:22pm: Call big boss plumber to ensure he is aware of situation and that it’s under control. He tells me he has three lads there now and he is en route and should be there within 5 minutes.

3.30pm: Steve is back with neighbour, plumbers have been mopping up water and sorting out damage. Steve tells me it’s not too bad and she’s over-reacting. Apparently she is going crazy how it has ruined her concentration for this big conference tomorrow that she has been preparing for, for the past 18 months.

3.40pm: Big boss plumber calls me, he is in attendance. All in hand. He reports damage to neighbouring flat not that bad and he doesn’t understand why neighbour went so mental.  He then informs me they don’t have time to do the job now and that I will have to probably find another plumber to finish the job. Now I am starting to feel on edge.

3.45pm: Steve confirms there is still no water to the bathroom and so toilet cannot be flushed.

3.50pm: Call big boss plumber who tells me they could not get into the flat below and so that is why they could not fix the air lock.  I tell him the neighbours water system is nothing to do with ours and the header tank is in the attic. The air lock would be in our own water system.

*******ALARM BELLS ARE RINGING NOW!!!!!!!!!!*******

3.55pm: Call the letting agency who recommended the plumber to see if they know anybody else I can call. They don’t. I update them on my sorry situation and understandably they are nervous to recommend anyone else. I assure them that I don’t blame them and I understand they were trying to help and I just wondered if they knew anyone else.

4pm: I start calling all tradespeople I know in the area to see if they can recommend a plumber.

4:05-4:30pm: Every plumber called nobody got time to fix airlock until next week.  Now starting to feel very worried…tenant will be home within couple of hours and I need to get this sorted.

4:30pm: In desperation I try my usual plumber again. Amazingly he picks up the phone. I am a babbling mess and completely incoherent. He is aghast. He cannot believe the plumbers have done all this and left me with an airlock and are now saying they are too busy to fix it. It also turns out that the plumbing firm who I had been recommended, and who attended the job, are arch rivals of his company’s and have nicked some of his work. He also knew the letting agency who would have recommended them without me even saying anything. Shit – Now I am in turf wars.  Plumber tells me they are completely chock a block he has no idea why his phone was not working earlier. Tells me he needs to get on with his work and that he will call me at 5.30pm to tell me if he can do it.

4.35pm: Think I may explode so decide to write this blog entry as a way to calm myself. I just now have to wait.  I am rather stuck. I can’t call anyone in case my usual plumber can come and fix it. I am also rather pissed off. I tried to do a good thing and fix this problem to keep the tenant sweet, have ended up using a rogue tradesman, have now flooded the flat below and have no water in the flat – oh and obviously I still have no hot water and need a new immersion tank!

5.10pm: Random mobile number calls me, it is Tom. Tom is a plumber and he sounds lovely, very softly spoken and humble. He has been told by the cowboys to call me to try and sort the situation as they don’t want to go back having fallen out with the neighbour. I am rather cautious who Tom really is and gently coax out of him the relationship with the other plumber. Turns out he doesn’t work with them, or know the big boss, it just happens that one of the guys who works for the other company knows him from school, felt guilty about the mess the company had left me in and so called him to call me to see if he could fix it. Sounds kosha enough, but I’m still cautious. I thank him and say I will call him back.

5.20pm Original trusted plumber who I have used for years calls me to tell me he is en route and will be there in 5 minutes and to make sure my friends are there to let him in.

5.22pm: Call friends to check they are still at flat.

5.25pm: Tom texts me to tell me he can be there in 20 mins. I am just replying to his text to say’ Thanks, but no thanks’ when he calls. I explain that actually we now have a plumber in attendance but thank him for the call and his willingness to assist. He confides that he cannot believe the other company has done this and that he feels he should ensure people don’t think he is anything to do with him as they will drag his name down. While I feel Tom is kosha, I am very non-committal. The world is a small place and you need to be careful what you say.

Now waiting for original, trusted plumber to call me. Tenant will be at work still and completely unaware as to the fun  I have had this afternoon. I have phoned my friend’s again and apologised profusely for ruining their day. They laugh and smile and tell me “Don’t worry Sam, we feel like we are in a soap opera – it’s like having your life for the day!”. I laugh back. How lucky I am to have such good friends!


Original plumber attended. I was right to be concerned by the first plumber stating about the airlock…turns out there was no airlock – they had isolated the water because they had split the cylinder which was in there – which was why they had flooded the downstairs flat! So basically, he completely lied to me!! Anyway, finally managed to get the water back to the flat later Friday night. I am still waiting to hear how much compensation the neighbour wants for the damage…oh and I still have to buy a new immersion heater for the flat.

A New Property Tax?

11 Oct

Anyone who reads the news knows the situation in Greece is dire. As my other half of the family is in Greece I can tell you first hand, it’s a horrible situation which will take years to unravel and set right.  Unemployment is rife, wages, pensions and any form of government subsidies are being cut left, right and centre and every day brings a new tax.

Recently, in a desperate bid to get more money into the government coffers, the Greek government has levied a new “property tax” for all property owners. Based upon the size of your property (per square metre) and the location, property owners now have to pay a new tax for just owning a property. The new property tax is to be paid annually and is supposedly just in force for 4 years – it’s meant to be an “emergency tax”. But, nobody believes the government. The Greek’s believe that once this new property tax is charged, it will be here to stay. And who can argue – if a government can find a new way to get more money in from it’s property owning tax payers then why would they close this lucrative income stream.

The Greek government have introduced this new property tax overnight. Up and down the country property owners are wringing their hands in despair – and fear.

And what has this got to do with us here in the UK? Well, right now nothing. But, given the copycat behaviour we see across our Eurozone who’s to say that suddenly we won’t see a new property tax introduced here in the UK? Once the government cottons on to how much can be raised in a single swoop the temptation may be too much to bear.

Owning property is a great asset and can be a great income stream – but it can also be a liability.  Make sure you’re assets outweigh your liabilities!

My Big Phat Property Event – LandlordSOS

4 Oct

Today I am still bowled over by the phone calls, messages and emails I am receiving after holding LandlordSOS at Keele Hall, Staffs on Thursday 29th Sept.

This is just one of many emails I am still receiving:

“I just wanted to say a big thank you for organising a great night last
week at Keele. Your events are getting bigger and better each time,
who knows next year you’ll probably be booking and filling the
N.E.C!!  Everyone, including myself appreciates the huge effort, time
and money you spend on these fantastic events – Keep up the good work”

And I am chuffed by the big beautiful bouquet of flowers I have been sent!

It was a free property event and the theme was “How to Survive and Thrive as a landlord”

We had excellent speakers – Maureen Fraser; Housing Standards; Newcastle Under Lyme Council, Mary Latham; landlord of almost 40 years and NLA representative and Ian Gardner; Senior Manager Commercial LloydsTSB..and yours truly gave a short introduction on why it’s great to be a landlord!

Here I am giving my presentation:

Here I am at the start of the night with my good friends Ruth and Jo who were helping me on the door:

We also had 14 exhibitors at the event – or rather companies I like to call my “trade secrets” – great people who have enabled me to grow my business:

This was my first time at organising an event so big – which had it’s moments of stress – but was such great fun! What makes it all the more special is the number of people who found the event useful – that means more to me than anything. Being a landlord can be a lonely business, so it’s great to get out – network, learn and share!

Lots of people have been asking me when the next one is…however I am still recovering from this and enjoying the buzz of holding such a successful event so for now all I can say is “watch this space”!