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The Honeymoon's Over For Rosie

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My heart bleeds....

There must be a medical term for it, but I’ll just call it Landlord Blues. The diagnosis is as follows. You decide to get into buy-to-let. Everything starts off brilliantly. Well, we all like shopping, don’t we? And buy-to-let equals shopping on a grand scale. Not only is there the purchase of an actual property, but then there is all the furniture, accoutrements and details to acquire, right down to the last teaspoon.

Then your tenants move in, and they start paying the rent, which pays off the mortgage, which goes down as the value of your flat goes up. This, my friend, is the “honeymoon period”. And it doesn’t last long. After the honeymoon, there is usually a period of jealousy, during which everyone at dinner parties hates you for being a neocapitalist, and you quickly learn to stop telling the truth about how much your portfolio is worth.

And then you reach it. The “totally stressed out period”, or Landlord Blues. Everyone suffers from it at some point. It is usually due to tenants or maintenance issues. Or, if you are really unlucky, both. And it can go on for months.

What charming friends she has....

I call my friend Lisa Jones, who spends most of her waking hours managing her 19 Brighton houses and flats. The portfolio is worth £3m, but at times, it doesn’t seem like a nice nest egg.

“I get stressed out all the time. All the time. I’ve stopped enjoying anything about it,” she says.

In her view, there is no such thing as a trouble-free tenant, since they are unable to live with the little snags and trials that homeowners simply turn a blind eye to. Blown light bulbs. Dripping taps. Leaking guttering. All things that the landlord is required to come out immediately and attend to.

“I get calls to come and fix a light bulb that has blown inside the oven, or from a tenant who refuses to use matches to light the hob.” She agrees that all the tenant can see is a big fat rent cheque disappearing into the landlord’s bank account. And this makes them grumpy.

“It is always a rather adversarial relationship. Nobody can understand you are making a pittance on the rent. My instinct is to maintain the flats incredibly well. But if I do that, they will make a loss.”

:P

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http://www.timesonline.co.uk/article/0,,2098-2053933,00.html

“It is always a rather adversarial relationship. Nobody can understand you are making a pittance on the rent. My instinct is to maintain the flats incredibly well. But if I do that, they will make a loss.”

What? Isn't BTL money for nothing, just sit back and the cash rolls in. Oh dear.

I wish Rosie wouldn't listen to Alvin Hall.

Just keep expanding that BTL "empire", the bigger the better.

Edited by BandWagon

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everyone at dinner parties hates you for being a neocapitalist, and you quickly learn to stop telling the truth about how much your portfolio is worth.

These people are really clueless. They think all they have to do is buy a few properties and let people have the privilege of renting them.

These BTL Landlords think they own the properties even though the bank probably does an will do for a very long time to come.

They need to understand that they are running a company with all the issues related to it such as customer service, competition, taxes, advertising, management etc.

We are going to see an exodus when the reality of BTL sinks in. If it was that easy to make money the major corporations would be doing it, the fundamentals are not right and the return is not worth it at the current time :lol:

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What is even more scary is that there is a bank out there that thinks Rosie is an acceptable credit risk.

That's why I'm moving more from the ideas of a recession to those of a depression.

More along the lines of the ideas by Prechter, Mellon, Harris and company.

Next on my reading list is Galbraith's account of the 1930's depression, I'm planning for the worst.

Edited by BandWagon

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What is even more scary is that there is a bank out there that thinks Rosie is an acceptable credit risk.

That's why I'm moving more from the ideas of a recession to those of a depression .

More along the lines of the ideas by Prechter, Mellon, Harris and company.

Next on my reading list is Galbraith's account of the 1930's depression, I'm planning for the worst.

but if you think about what's likely to happen too much its b****y depresssing

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Rosie is the Icon of dinner-party-set landladies who got into it because it was fashionable.

Her demise - which is surely coming - will be an object lesson to the thousands of her ilk, who jumped in because BTL was "the thing to do". In the "summer of property love", from mid-2003 through the first half of 2004, it seemed oh-so-right.

Oh so correct, the gritty unpleasent reality of being a CLNB DPSL (dinner-party-set landlady) is begining to bite with the delusion of the 'young professional tenant' turning into the reality of the chav nightmare from hell.

A SERIAL troublemaker - dubbed Basingstoke's most prolific offender - has been locked up for four years. Daniel Malcolm has a list of 37 convictions for 130 offences to his name. He has only had one year free of convictions in the last 13 - and that was when he was in custody. Now that Malcolm, of Winterthur Way, Victory Hill, Basingstoke, is back behind bars, ……………………

But I have to say I'm completely bewildered at the length of time it's taking for BTL to fall out of fashion, 18mths since the peak and still there is no mass exodus. Worse still, that pair of TV cretins Phil & Kirsty get further series' to promote their awful finders business.

I can only assume it's less painful (in pride terms), for those DPSL's to continue to subsidise their 'pension' through hubbies earnings rather than admit their monumental ****-up over the fondue.

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Oh so correct, the gritty unpleasent reality of being a CLNB DPSL (dinner-party-set landlady) is begining to bite with the delusion of the 'young professional tenant' turning into the reality of the chav nightmare from hell.

I remember turning up at a rental house I had back in the 80's

it wasn't so much a BTL, we did a quick refurb it and were waiting for planning permission to demolish it and redevelop the land

So why not rent it for 6-12 months?

A neighbour called me to complain the tenants were a bit noisy, so two of us turned up to 'have a word'

We were slightly outnumbered -a full blown rave was taking place and there was at least 200 people in the garden

As we beat a hasty retreat, we noticed that one of the doors was damgaged

It turned out somebody had locked their pit bull in a room and the dog had protested by eating half the door and I don't mean a bit of hole, it was half the f**king door!

PS We didn't call them chavs in those days

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http://www.timesonline.co.uk/article/0,,2098-2053933,00.html

What? Isn't BTL money for nothing, just sit back and the cash rolls in. Oh dear.

Think I'll keep renting, let some other fool take the financial hit.

Indeed. One call to the landlord yesterday:

- sink cracked

- window rotting

- boiler leaking

- plaster crumbling

- electrics playing up

Landlord: "ok, so I'll need a plumber, a gas fitter, a plasterer, an electrician and a glazier"

Oh dear....... ;)

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Guest muttley

Indeed. One call to the landlord yesterday:

- sink cracked

- window rotting

- boiler leaking

- plaster crumbling

- electrics playing up

Landlord: "ok, so I'll need a plumber, a gas fitter, a plasterer, an electrician and a glazier"

Oh dear....... ;)

I've just been talking to a bloke who has been hired by the landlord to shoot "ferral" pigeons that have nested on the property we are renting.Apparently a neighbour complained.

I bet they don't tell you this at Inside Track.

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Indeed. One call to the landlord yesterday:

- sink cracked

- window rotting

- boiler leaking

- plaster crumbling

- electrics playing up

Landlord: "ok, so I'll need a plumber, a gas fitter, a plasterer, an electrician and a glazier"

Oh dear....... ;)

:lol: that would wipe out a months rental just for them all to turn up and look at the jobs! :D

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Guest Bart of Darkness

I've just been talking to a bloke who has been hired by the landlord to shoot "ferral" pigeons that have nested on the property we are renting.Apparently a neighbour complained.

I bet they don't tell you this at Inside Track.

Should have got the Vulture Squadron in to do it.

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Tenants unable to live with the little snags that a homeowner would turn a blind eye to?

Perhaps because the tenant is paying for a service, and expects to receive, service.

I'm sure that restaurant goers would be pleased to eat food with the burnt bits cut off as a home-owner making their own food would be.

I'm sure that people buying flowers from florists would be pleased to buy flowers that are half dead or stunted, as would happen if a home-owner grew the flowers themselves.

I'm sure that people paying to attend a concert would be pleased to hear fluffed notes, no talent whatsoever, and having the concert suddenly end after a few minutes as would happen if a home-owner played music for themselves.

So why should the tenants expect more than mediocre service when they pay for it.

Billy Shears

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but if you think about what's likely to happen too much its b****y depresssing

I'm thinking more about the opportunites that it will create.

There will be bargains in a recession, and once-in-a-lifetime opportunities in a depression.

But I think education is the key here, so I'm doing some reading about the great depression.

Don't get depressed, get informed.

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having rented my house out years ago, before it was fashionable. I know what nightmares you can get. If you have a good tenant, you want to keep them. you should be flexible on the rent to accomodate good ,regular , and honest people. one lot of scum i had did everything including doing a runner and nicking all my white goods. :lol:

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Guest muttley

having rented my house out years ago, before it was fashionable. I know what nightmares you can get. If you have a good tenant, you want to keep them. you should be flexible on the rent to accomodate good ,regular , and honest people. one lot of scum i had did everything including doing a runner and nicking all my white goods. :lol:

I know one guy where the tenants took everything,and I mean EVERYTHING.This included all the furniture,carpets even the doorbell. They also sold the fireplace and left a big hole in the wall.

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I'm curious to know if the real expenses of BTL are things that can be ignored for a while. For example a house when bought will probably only have a major failure requiring big ££££ repairs once in a while, once every 10 years? Also a house in good repair and decorative state because it was tarted up before being sold can be allowed to slowly decay year on year and it will be some time before it becomes such a dump that no-one will be prepared to rent it and it must be done up. Finally the tenants from hell are going to be (I presume) a rare occurrence, and it might be only one out of ten tenants (hence once every 20 years or so) that cause real ££££-sucking problems. Finally it may be a few tenants before the landlord learns that a tenant's deposit is not there for them to do whatever redecorating they need to do including normal wear and tear. Therefore, while a 5% return on investment might appear too small to those with 'the bigger picture', an inexperienced landlord might believe that they are really getting 5% return even if house prices do not rise, and it will be quite a few years down the line before they realise that in actual fact they were only getting 3-4% all along, because by letting the place run down they were storing up big bills for later. Sort of like someone buying a new car and not realising what it is really costing them to run until they try and sell it a few years later and suddenly find out how much it had depreciated.

Billy Shears

Edited by BillyShears

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I'm curious to know if the real expenses of BTL are things that can be ignored for a while. For example a house when bought will probably only have a major failure requiring big ££££ repairs once in a while, once every 10 years? Also a house in good repair and decorative state because it was tarted up before being sold can be allowed to slowly decay year on year and it will be some time before it becomes such a dump that no-one will be prepared to rent it and it must be done up. Finally the tenants from hell are going to be (I presume) a rare occurrence, and it might be only one out of ten tenants (hence once every 20 years or so) that cause real ££££-sucking problems. Finally it may be a few tenants before the landlord learns that a tenant's deposit is not there for them to do whatever redecorating they need to do including normal wear and tear. Therefore, while a 5% return on investment might appear too small to those with 'the bigger picture', an inexperienced landlord might believe that they are really getting 5% return even if house prices do not rise, and it will be quite a few years down the line before they realise that in actual fact they were only getting 3-4% all along, because by letting the place run down they were storing up big bills for later. Sort of like someone buying a new car and not realising what it is really costing them to run until they try and sell it a few years later and suddenly find out how much it had depreciated.

Billy Shears

And what very few BTLers seem to factor into their expenses/profit equation is the time they put into managing their properties.

They should keep track of the hours they spend calling plumbers, showing the property to new tenants, doing the paperwork, etc. Then they should figure out what they could reasonably expect to be paid if they had some other part-time job. Those wages should then be deducted from their profits.

Don't people value their time? I work as an independent consultant; thus, I know exactly what an hour spent managing a property would cost me.

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Surely the biggest single 'loss' is caused by voids. Whenever there is a change of tenants you will be very lucky to get them out one day and in the next.

When we went on our first walk around the estate we are renting on now - in early September - we noticed a similar property to ours for rent right at the end of the estate. I walk past it most days and have often wondered if we should have rented it - instead of the one we are in. Just toying with the idea of having a look as our 6 months is almost up and - abracadabra - it is rented. That's just almost a 6 month void for that landlord.

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Guest muttley

In his book "Your Money Or Your Life" by Alvin Hall there is a section on BTL. Alvin reckons that when calculating yield you should allow for 2 months void every 12 months.

He also reckons you should put down 30% deposit.

Still, what does he know?

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In his book "Your Money Or Your Life" by Alvin Hall there is a section on BTL. Alvin reckons that when calculating yield you should allow for 2 months void every 12 months.

He also reckons you should put down 30% deposit.

Still, what does he know?

Would you recommend this book?

Billy Shears

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Guest muttley

Would you recommend this book?

Billy Shears

I would say it was a little lightweight for someone like you.

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I would say it was a little lightweight for someone like you.

I don't think much of anything is too lightweight for me. Does it talk sense, and not cost too much? That would probably be everything I need.

Billy Shears

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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