All That Glitters Is Not Gold!

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

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Leaking Roofs and A Drunken Call Out

Heed my warning all you new or wannabe property portfolio owners!  You may remember in this post I mentioned that, as the majority of Eastbourne (Sunniest Town in Britain apparently) was built around the latter half of the 19th century, some of the building materials are beginning to fail such as mortar and felt.  Now, on the Sunshine Coast our weather is mild compared to the rest of the country but this year the roofs have really taken a hammering in the wind and rain.  Four, yes FOUR, of my properties can no longer be patched and now require new roofs.

Perhaps more experienced, long in the tooth landlords investigate the roof condition of a potential BTL before considering anything else but from my research of Property Millionaire Courses run by gurus the focus is on the bottom line numbers/profit at no point have I seen anyone flag up what will happen or how it will affect the bottom line when a major repair needs doing which hasn’t been budgeted for.

Which roof do I pick first when looking at £10-15k apiece?  Well, obviously the one that shows the most!  So on top of delving under the stairs to look at RCD, open kitchen cupboards to locate boiler, my advice is make sure you have a good look at how well the tiles are likely to keep the rain off.

I don’t mind the investment as I’m young enough to feel the benefit for the next few decades and I don’t use the profit to live on, but if you don’t have the cash in reserve and cashflow is tight, a major expense such as this will really, really hurt if you haven’t budgeted for it.  After all, there are only so many times you can fob a tenant off with the words Continue reading

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Christmas of Domestic Disturbances

Happy New Year and welcome to a first globally bumpy week of 2015!  The events around the world over Christmas and the last few days have certainly put any trivial issues I have into perspective.

Christmas Disturbance

At 11.30pm on Christmas Eve, whilst digesting the contents of Swedish Christmas Eve dinner and discussing the origins of Elk meatballs, the phone rang to say one of the tenants was locked out.  It was minus 10 degrees where I was so I felt sorry for them, phoned a friend who was holding the keys, organised re-entry only to discover in the meantime the tenant had rung the doorbell and, lo and behold, someone bothered to let her in.  Sometimes, it doesn’t pay to be too reactive.

A few days later, I was enjoying a bit of TV catch-up Downton Abbey by the fire when a tenant called at 10pm which I ignored and they could leave a message if it was urgent.  His persistent ringing punctuated my daydream of owning a team of domestic workers (Downton had THREE nannies, for goodness sake!) and I threw a coat over my pyjamas to head down to the house.  One very cold night, two police cars, four bored policeman, a tenant clutching an arm, another sobbing in her room and a howling, ranting Portuguese called Amaro banging around in the back of one of the police cars.

Amaro’s girlfriend, Kalina, was 30 minutes late home from work and he was waiting for her.  Continue reading

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Smokin’ Sounds The Alarms

Today’s post focuses on our foreign and immigration-approved (I think) tenants – we may share a commonality as EU citizens but the last few weeks have shown that we’re definitely still worlds, continents and nations apart.

It started off with a faulty fire alarm.  The two storey maisonette was classed as an HMO by the council as it was part of a three storey building even though we don’t own the flat below which has its own entrance.  Under the HMO regulations we were required to install a Grade D alarm system providing every room with their own hard wired smoke alarm and linking it to the flat below.

There’s been quite a bit of room changeover recently and this HMO has one very grumpy English man, a Czech lady, two Portuguese men and a Spaniard.

The smoke alarms started to go off at seemingly random times but mainly throughout the night so we asked everyone to check their own alarm to see which was flashing red to show which one was faulty.  Everyone denied seeing any red lights – I’ll clarify – anyone who read and understood my texts denied either hearing the alarm or bothered to report it sounding.  It was only the frequent calls from the Englishman and the lady in the flat below which gave us an idea of what was going on.

After seeking advice from the manufacturer and various alarm system engineers we went into the rooms to remove one alarm at a time to find the fault.  What we found: Continue reading

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Winter of Discontent?

As the relentless rain continues to pour on a daily basis, I’m suddenly finding that the small stain in a room can no longer be treated with Muffycid and is starting to become a threatening, full-on damp patch.  It’s not just happening in my home (where I’ve successfully managed to ignore the growing discolourations) but I’ve been called out to three houses all showing similar symptoms.

It turns out, according to the builder, that most of the Eastbourne town centre housing stock was built between 1880 and 1910.  Bearing in mind a roof has a lifespan of about 50 years this means that all the roofs in the town are starting to fail for the second time since they were built.  And it’s not just roofs – the mortar between the bricks has around a 100 year lifespan.  At first I thought he was joking to get away from the boring explanation of roof felt, but as I look around the town it’s certainly gold rush time for roofers and scaffolders.

And here’s the problem of having all your eggs in one basket – Continue reading

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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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Why I Don’t Do Student Lets

InbetweenersIt’s that time of year when students are waking up to the reality of more studying and getting excited about all the possibilities university has to offer.
In the meantime, landlords of student houses have removed the six month old fish fingers from the oven, (hopefully) painted over the coffee stains on the wall, disposed of the empty booze bottles and taken off the plastic from the new mattresses.
I’m not a fan of student lets. Yes, I know the money is great at up to £110 per week plus bills, but my partner is a letting agent and has taken on the mighty task of turning around 12 student houses in the space of 2 weeks as the landlord insists on 12 month contracts. He’s washed unidentified stains out of curtains, sourced chairs, mended broken furniture and is now best friends with a mattress retailer, a decorator and the carpet cleaning man.
At the end of every summer holidays I see the same student landlords racing around town, paint brush in one hand, screwdriver in the other desperately hoping this intake won’t break the bannisters or pull the kitchen cupboards off the wall. They think I’m mad Continue reading

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