are landlords parasites

3 Things I Wish I Had Known Before I Became A Landlord

thesecretlandlord

1. Everybody lies

Look, I know people don’t always mean to lie and sometimes they thought they were telling the truth, when in fact the opposite was true, but that’s life.

Everybody lies.

The sooner you get used to this line of the thinking, the easier your landlord life will be.

And when I say that, don’t think for one minute I’m just talking about tenants, nah, I’m talking about everybody.

I’m talking about the solicitor you use to purchase a buy-to-let and who says everything’s fine and then you learn two years later there’s a clause that prohibits you from letting the property and the freeholder’s on your back threatening you with a multitude of sins and you’re thinking WTF?

I’m talking about the builder you pay handsomely to install a new bathroom and who you think has done a good job to only learn months later they didn’t bother to put a frame in and the bath pulls away from the wall and floods the downstairs flat.

I’m talking about the housing officer who wants to rehome a vulnerable family and who promises you the property will be monitored and looked after and who does a disappearing act – along with the vulnerable family – and who leave your property smashed up and in smithereens.

I’m talking about so many things I could go on and on and it would burn your ears with the boredom, but the fact remains: Everybody lies.

Get used to it and get on with it.

2. There’s no Lamborghini in the drive

I swear when I started out in property there was a promise of untold riches. Before long, I thought, I’ll be on a helicopter jetting off to a 5-star isle and all will be well in the world.

No.

For the run of the mill landlord, that’s not the case. For the very few, it will be, but my golly you need a lot of bloody good stock!

A few years ago a good friend of mine said to me ‘Why buy another house, it won’t make you happy’. And I looked at him and I thought, what a dick. What a dumbass thing to say. I love property, of course I should buy more, how else am I ever going to get my lambo!

But later that night, I realised he was right.

It was a turning point in my life when I realised, you know what: I have enough. I don’t have the lambo and the helicopter and the rest of the shebang I figured would come, but I do have a lot. I have way more than so many others and so I should be happy with what I have.

And I don’t remember the Buddhist saying, but it’s something like the pursuit of happiness which will make you unhappy. And something to do with clinging onto things and stuff.

As I say, I’m clearly not Buddhist, but I have reached a new level of understanding and meaningfulness in my life where I know money and even the pursuit of it will bring me no joy.

And I’m ok with that.

I’ve made my peace and I know, while the council and many others seem to believe I have a magic money tree at the end of the garden, I know magic is only for fairy-tales. And I’m way too old and far too cynical to believe in all that razzmatazz now.

3.Get rich quick is for suckers

In the beginning I read about property prices doubling every seven years. There was a graph that was touted about which had all these rising lines showing how rich you could be if you invested in property.

This is not the case across the whole of the UK.

Yes, I agree some places have seen stratospheric rises, but there are many areas where growth has yet to get back to 2003 levels.

Yes, there are some developers who make shedloads of money by flipping and selling and I’ve been fortunate to have done a few deals, but as an ongoing business model, it’s tiring and time-consuming. My developer friend tells me his life is like ‘feast or famine’, I would add it’s also a roller-coaster of risk and I’ve known many to lose the shirt off their backs on a particular deal.

And that’s the other thing – who knew you could lose money in property? I certainly didn’t when I started almost two decades ago. Back then, I was thinking it would only be a couple of years in the game and then I’d be out partying with aforementioned lambo not giving a shit about anything coz I would be bathing in riches.

Again, not true.

Yes, of course you can make money in property, but it’s a slow, hard, long game. Play it quicker and maybe you’ll win, but maybe you’ll lose.

What I can tell you is all this time on, I didn’t think I’d still be renting out property for a living.

*

When I started, I didn’t really have an end-game; I had a goal, a dream. And if truth be known, none of it included me still being a landlord all these years later.

And don’t for one minute think I’m having regrets about my life, because I’m not. I’m just sharing some of the things I wish I’d known then, before I started.

But the truth, regardless of everything I wish I had known before I became a landlord, is that I would do it all over again.

Cashflow is king for landlords to make it through Covid-19 (& the aftermath!)

thesecretlandlord

In real estate terms, I’d classify as a baby. I may have nearly two decades of experience, but in terms of market cycles, that’s not so much. Yes, I have lived through and survived the financial disaster that was 2008, and I managed to hang onto my hat, but still I don’t take anything for granted.

I was fortunate to reap the benefits of cheap credit and some stunning mortgage deals scored before the 2008-mess, but as I’ve learned: Good things never last.

Enter George Osborne.

As a portfolio landlord with properties nationwide I can assure you his plans were pretty disastrous for somebody like me, especially when that somebody like me didn’t own the properties in a company due to previous tax planning that then got scrapped.

But there we are, life has a habit of happening while you make plans.

Osborne’s tax changes worked – especially section 24. He forced me to sell some good stock to keep my business going and made me wonder what to do about some of the lower priced/ higher yielding stock that had yet to recover any values – despite being held for over 15 years.

Perhaps many people will be surprised to learn that, they’ll think – but the property market has been amazeballs these past few years? You must be a crap investor. I would reply, yes, but not everywhere. The UK market is big and unequal and is one of the reasons why I have no interest in ‘averages’.

It’s a questionable and galling process to sell off good stock (I term that the stuff that really exploded in value) to keep the bad stock (those where capital values are firmly pancakes but earn decent yields).

And it’s something I debate often with myself when I look again at places I sold and what they’d be worth now (don’t recommend this).

But the thinking then, as it is now: I cannot pay a gas bill with capital gains unless I sell.

Equity is meaningless unless you sell (or remortgage – but this doesn’t work for me with S24)

First and foremost, for any business to succeed you need cash flow.

Cash is what pays your bills, ensures you keep your stock in good condition, gives you the ability to pay the tax and run your business. It’s a bugger I have to pay so much, but I remind myself often: Paying tax is a sign of success (dress it up anyway you want to make yourself feel better!)

Anyway, I’ve been selling off for a number of years now and I know that goes against a lot of what other investors do, but I’m OK with my decisions – I’ve also been buying more, but that’s a different story.

Anyways… in March this year, I decided to start selling more. I’ll get in on the ‘Boris Bounce’ was my thinking.

You know as you sit there reading this, that didn’t happen.

What did happen is Coronovirus and a complete freezing of the property market. Viewings weren’t allowed, house moves weren’t allowed, evictions still aren’t allowed. Pretty much anything to do with the normal functioning of the property market wasn’t allowed.

Which is a mighty big sucker of a suck.

Of course, the media claims the market has now turned, properties are all shiny and sought after again, but when I called up a few agents (and some were even in desirable commuter belts down South) the response I got was not what I thought.

And so I’ve been mulling on this for the last few weeks (and when I don’t know what to do, I do nothing) and then I said to myself: What have I learned this time?

I know we’re going to hit a massive recession, lots of people are going to lose their jobs and the outlook for the next five years is bleak.

So why am I not selling, when I intended to sell?

Despite everything – the world falling apart, loads of gloom and doom on the horizon, everything going to pot yada-yada – people will always need somewhere to shelter.

People will always need somewhere to lockdown and to hide from the world.

Regardless of anything else happening on the planet, property is a key need, and that’s my business.

I fully expect the government to mess about more with policies and taxes and for me to question again why I’m in the market, but for now, I still believe what I have are assets. The market will fluctuate, nose-dive, top-out and everything else in-between, but the most important thing is to remain on-board for the ride and come out the other side.

Your property planning may not be perfect and things may not turn out quite how you wanted, intended, hoped for or anything else. But if you’ve got cashflow, you can go the journey. It may be bumpy and lumpy and you may have regrets for signing up for the ride, but remember this: everybody needs somewhere to live, love and lockdown in.

Why pay rent if you don’t have to?

thesecretlandlord

That appears to be the rhetoric of tenant pressure groups and the government. But it may as well get extended further: Why pay rent at all?

I mean, what’s more important than a roof over your head?

The narrative is incredulous.

The knee-jerk laws and U-turns are unbelievable.

How landlords are meant to pay for a property when the tenant is not paying rent is laughable. Mortgage holiday? What sort of holiday is it when it destroys your credit rating and adds thousands of pounds and months to your misery of debt?

And what is it with most of this country thinking the UK housing stock is free? Landlords are in a mountain of debt the scale of which no tenant will ever likely understand.

And yet, landlords are expected to foot the bill despite mounting debts.

But if a tenant decides not to pay – even if they’re in receipt of housing benefit – tough luck.

There is fuck all you as the landlord can do.

So why pay rent, if you don’t have to?

That’s the message this government is sending. Oh and by the way, let’s not only extend the eviction ban for another month, let’s also make landlords give tenants six months’ notice to leave and complete a plethora of paperwork with so many twists and turns it looks like a Covid-19 broadcast.

The attitude and last-minute policy changes are sickening.

Never before in my almost two decades of being a landlord have I ever felt so vulnerable. I have become stripped of all powers and any sort of protection, and yet the expectations that I am to provide safe accommodation accumulates with no let up – and potentially no rent. And no way of knowing if I will ever get my money back, or lose everything I put in.

I can only assume tenant groups are planning mass bankruptcies, because this is what this action feels like.

Only this week I’ve had to agree to damp work in a property at a cost of £2,800. I found the whole thing strange. I’ve owned the property for 15 years and have never had damp. Until a new tenant moved in two months ago.

This, to me, seemed a weird coincidence and thus I asked several people to attend to ascertain what was going on. This period of investigating what may be causing the sudden damp patches took a couple of weeks while various persons looked into the matter.

My tenant decided this was not acceptable. They called the council. The council then got heavy about the work. I said, hold on, I’m trying to work out why I’ve suddenly got damp, do you mind if I try and figure out what’s happening?

They didn’t give two flying fucks. All they wanted is a start date of the work and to see the problem solved.

But what if that tenant was not paying rent? What am I meant to do then? How on earth am I meant to pay for such expensive remedial work?

And this is what I find the most frightening about this situation, and it’s going to get worse.

If tenants are not paying their rent, landlords will struggle to pay their mortgages. But if tenants are not paying their rent and landlords are trying to subsidise a tenant’s living costs, how on earth will they be able to ensure the property remains in good condition?

I know these tenant pressure groups want ‘rent debt’ forgiven, but who will forgive a landlord for not complying with housing safety?

Who will a landlord call when the tenant has not paid the rent, but still expects the roof to be fixed? Who will the landlord ask for help when they can’t make ends meet and the property falls into disrepair?

There are no winners in this war. And it is a war that has been created unnecessarily.

Nobody argues whether it’s fair for a supermarket to charge for the food you want to eat, so why are people arguing whether it’s fair for a landlord to charge rent for the property you want to live in?

Perhaps if the Private Rental Sector (PRS) was made up of big companies we wouldn’t be having this debate. Big companies are not so easy to push about and screw over. But most landlords are little people, with no power.

The government have ensured the housing crisis is set to continue and they have hastened the demise of the PRS.

Little landlords have little pockets; people often forget that. Until they see the ‘For Sale’ board outside. Because that ‘For Sale’ sign, well, that’s the last vestige of a landlord’s power.

Is it unfair for tenants to pay rent?

thesecretlandlord

To be honest, the question seems insane. If you sign a contract and agree to rent a property for a price, then you should pay.

But listening to ‘You & Yours’ on Radio 4 this morning, I’ve learned from a tenant caller, apparently, it appears to some tenants to ask them to pay the contractually agreed rent is unfair.

Tenants, the caller said, should be more looked after. She admitted, she was one of the lucky ones, she had a cash pile and a maintenance agreement from her ex-husband. However, her ability to teach pilates during the lockdown had severely hindered her ability to pay her £2000 per month rent.

The landlord, she said, had refused to reduce her rent by as much as she felt she was entitled to and only gave her only £100 off. That was not good enough, she wanted more, and felt the government should put more pressure on landlords to do more.

Forget the fact she’d signed a legally binding contract, for the minute.

But, what got me about this attitude, was just prior to the tenant caller, two landlords had called in – both of them had invested their money into property to provide for a pension. Both of them were trying to help their tenants, and both had taken a financial hit that had affected their way of life.

For the first landlord, their tenant not paying rent for over one year and the eviction getting caught up in the Covid-19 crisis, meant the property would be sold once it’d been recovered: To pay the debts accrued on account of the tenant.

At this stage, the tenant owes over £9,000 in unpaid rent and the landlord has racked up a legal bill of £7,500.

But apparently, more pressure should be put on landlords to do more.

What more do tenants want?

Obviously, it sounds like free rent.

Which is fine in theory, but what about in practice?

Most landlords are in debt. They weren’t gifted the properties they rent out in some secret prize draw. They worked in their jobs and they invested in their properties for a future, for a pension, for maybe a life that didn’t involve giving free rent to random people just because they feel like they’re entitled to it.

And it may surprise most tenants to learn, but landlords do work. Not only did they have to work to raise the capital to buy the property in the first place, but many still work in their everyday jobs to pay the mortgage and keep the property running. For most, the ownership of a rental property is their pension.

And what I find so frustrating about this situation is the lack of understanding from any side about what it means to be a landlord.

Any other business is not expected to give free anything. Supermarkets during this crisis have removed most of their promotions and food bills have increased substantially. But where are the cries for how unfair it is that supermarkets are charging us money, real actual money for food?

There are none.

We expect to pay for the food we buy.

So then, why is it that tenants expect to live rent free in the property they rent? Don’t they realise their landlord has a mortgage and bills to pay? Don’t they ever think about what they would do if their source of income suddenly got stopped?

Hold on – with 9.4 million furloughed workers, maybe some did?

But the difference for them – they get to claim 80% of their salary from the government, or maybe claim benefits. Landlords get none of that. There is no help from the government. If a tenant stops paying rent, there is no secret source or benefit to claim. Owning another property means you’re ineligible for any benefits.

Stop and think about that for a minute. If you, as a tenant, stop paying your rent – what do you realistically think is going to happen?

Do you think your landlord will go to that magic money tree at the bottom of the garden and pick the mortgage payment from its lustrous leaves?

Get real.

Your landlord will suffer. Your landlord will experience a level of stress and anxiety only those is serious, financial debt will ever understand.

Don’t pay for a while and your landlord, along with your home, will get repossessed.

Because that’s the circle of life and how this world runs.

As a landlord I’m not asking for your sympathy; I’m asking for your understanding: We’re all in this economic chain together. It’s not us against them, it’s not landlord versus tenant: this is life. This is the world we live in.

Nothing comes for free. And nobody should expect to live for free. These are difficult times, likely set to get worse. And while there’s calls for more tenant protection and demands to clear tenant debts, I wonder who’s going to clear the landlord debts?

Landlords don’t have magic money trees or stress-free lives. When the shit hits the fan – and it will – the banks will step in and take back their properties. Then, we’ll really have a rental crisis, and it will be the tenants not paying to blame.

Will Covid-19 Spell the End of the Private Landlord?

Will Covid-19 Spell the End of the Private Landlord?

thesecretlandlord

My friend texted me last night about another friend who’d contacted her. Her friend is a landlord of a House of Multiple Occupation (HMO) and is on her knees, literally. The tenants are not paying the rent and she has to pay the mortgage and all of the utility bills for the property – but with no rent coming in. She’s also been furloughed and is struggling to make ends meet. Trying to pay for this property – where the tenants are not paying – is putting her entire life on a knife-edge, losing her sleep and causing huge arguments with her husband from the financial and emotional stress.

‘What can she do?’ She asked me.

‘Wait’, was my reply. ‘Talk to her bank, her suppliers and explain the situation, and then she has to wait.’

I found my reply to be laughable, ridiculous. How can it be that this landlord is so powerless to do anything?

But that’s what the government did when they slapped a ban on all eviction notices for landlords during coronavirus.

And yes, I get there are some rogue landlords out there, but the vast majority are not. The vast majority of landlords are everyday people trying to make a bit extra, trying to save for a pension, trying to build a future.

The majority of landlords are not big corporations, they are not rich people with money trees at the end of the garden: They are normal people, holding down normal jobs, trying to live normal lives.

The situation makes me so angry and sad because people hate landlords so much. I mean, really fucking detest landlords. And they hate me so much because what?

I didn’t murder anybody.

I’ve never committed a crime.

I’ve never been to jail.

I’ve never even squashed a spider.

But you know why I reckon so many people and the government (clearly) hate me as a landlord: because I rented a property to a tenant and asked them to pay rent for it.

Well, bugger me sideways and piss all over me. I know you want to.

But the thing is, if I owned a shop selling thimbles and a customer came in and wanted one of my thimbles, I’d ask them to pay for it. If they didn’t, the law would protect me. I’m not a free thimble shop, the same way I’m not a free property shop.

But the government don’t understand this. They don’t give two hoots, let alone one flying fig, that the majority of landlords are your everyday Joe’s, normal people who have normal jobs and normal lives. The government, the media and the public have done a grand job demonising landlords and making them into the scapegoat of why the UK has such high property prices.

And it’s not just residential tenants who’re refusing to pay rent – even big blue chip companies are refusing to pay. Much like those big companies who also refuse to pay tax. But the thing that gets me, is some of those commercial places, your local hairdressers or corner shop for example, may be owned by a retired person who invested believing it was good for their pension. They believed the hype. Heck, the government even encourage commercial property investment for your pension via SIPPS. But at the last quarter, only 48% of commercial tenants had paid rent in time and in full. This quarter, it’s set to be even lower.

Again, the government have banned landlords from taking any action.

Now, I’m all for forbearance, showing leniency, understanding and everything else that makes me a human being who’s running a business. But, there has to come a point at which the responsibility shifts. People need to understand actions have consequences – even if you don’t act. If you don’t pay rent, that has consequences.

And maybe for those tenants who haven’t paid rent right now they can breathe easily knowing they can’t be evicted. But what about the landlords who haven’t got any rent coming in? What about the banks who won’t have their loan payments coming in? What about the utility companies? The council tax departments?

This is not just a trickle down. The consequences of this will be trickle up. Then it will be trickle down and down. And when all the hated landlords have gone bust and there’s a lack of property to rent because social housing can’t provide for everyone, maybe then people might remember that old-fashioned thing called a landlord.

I Have A Dirty Secret…I Am A Landlord.

thesecretlandlord
landlords are scum

*Shush*

Please don’t say it too loud.

I don’t want anybody to hear you.

But, let me reassure you; I have never committed a crime. I have never killed anybody and I have never slept with my own father.

I know, that’s probably not what you expected.

Most people think I’m scum, shit of the earth, a parasite. I, (according to a lady I spoke to at a party recently) am (single-handedly, I believe) responsible for why she will never buy her own property and why the whole property market is fucked.

If only.

If only, I had so much power and control and importance.

Impotence is a better term, but then, that’s a phrase only other landlords who are in this business would understand.

They’re in on it. My dirty secret. Our dirty secret. Of having a rental property.

I think maybe having herpes or gonorrhea or my face covered in weeping pus would be more socially acceptable than admitting I own more than my own house and I rent it out for *shock-horror* a profit.

Profits are not acceptable.

Profiting from somebody else living in your property is not a done thing. It is not an acceptable thing.

Unless you’re talking to the bank, about a mortgage or a loan. Then your profits are never enough, and maybe they’ll just not include them anyway, because, according to their latest too-small-to-read-small-print, property income is not eligible as income.

Not what the tax man thinks.

He wants all of the income, plus doesn’t believe having a mortgage is a valid operating business expense. Unless of course you own the property through a company, then that is OK. Having a property business is acceptable, being a landlord is not. Even in the eyes of HMRC.

That’s how far and deep this hatred runs.

Of course, landlords are big, rich people, so it doesn’t matter.

They’re not people like you. They’re not people like your neighbours or your family, or your friends or someone you know, who may own another property they rent out to fund their pension or lack of trust in the stock-market. No, they’re different. They have their own reasons you fully accept for them doing that.

They’re not proper landlords.

Landlords proper are cretinous beings who feed off other better people. Better people who should be able to live where they want at the price they want to pay.

Not people like me. I am a landlord. People like me don’t deserve to exist. That’s what I’ve read on social media.

Any other sector and you’d call it bullying. But if you’re a landlord there’s no such thing: You’re fair game. Say what you like. Even the politicians condone it.

The hatred is socially acceptable. Encouraged even.

And that’s why I have to keep it a secret: I am a landlord.