First time landlord - Advice :)

shays_mum

Goodluck op, am thinking of going down this rd & wanted to sign upto the post

Bungarm2001

HOW TO CHOOSE A LA Part one....

Quite a few years ago when we were very new fresh faced would-be LL's, we bought two properties to let, then went to interview as many of the local LA's as possible. All of them were very keen to take us on and all provided a service varying from tenant find to full management. All of them were members of ARLA and various other professional bodies.

At the end of the day, we were overloaded with info and truly couldn't choose between any of 'em. Internet really was in it's infancy, so no real oppurtunity there for research, so, we went back to each of them and asked them all one question...what would you do if the tenant wanted you or us to come out to change a light bulb? One particular agents answer got him the job.

PART TWO...

Jump forward 10 years and a few additional properties later, we went with a local agent who was experienced with student tenants, since letting to students was what we had aimed the properties at, it seemed the best thing to do, however, we were in two minds because by then, we were well experienced in letting, and felt we could deal with anything..or so we thought.

We had seen the new students in, and were just about to leave the LA's office after signing all the necessary when one of the students came rushing in telling us that none of the room keys fitted...to cut a long story short, they had broken every key by trying to force them into the wrong locks. Not one of them had had the common sense to try each key first before finding the right one.!! We had actually left each key in each door, but they'd decided on some daft student ritual where alll the keys were thrown into an astray and each had their pick then chose the room they THOUGHT each key fitted...:eek:

Belive me, we were VERY glad to walk away on a friday afternoon and let the agent take care of this!! Sometimes, full management is a godsend.

We are still with the earlier LA but sadly, not for much longer since their fees have grown out of proportion to the service they provide. The student LA we stay with because over the years, we have built up quite a good relationship with them and can't see that ending soon. Now we are pretty experienced we do manage some of our own properties now, but have used tenant find in areas where we own property but don't know the area very well.

In the very early days, I think we would have been well up the creek without the LA to steer us right. It's a real poity that over the years we have seen them try on all sorts to squeeze more and more out of LL and tenant alike, sometimes charging for the same things, like credit referencing.

Don't know why I have posted this except to illustrate how hit and miss it is choosing a LA. You can take on board all the recommendations, the professional body memberships, word of mouth etc but I feel that plain old gut feeling does the choosing at the end of the day.

Like I say, this first step is by far not the worse thing you'll encounter in this 'game.'

PS Something else you should definitely take on board...you will actually 'earn' very very little if all the properties you propose to buy are with a mortgage. Relying on CG in these credit crunch times is a non starter. Very best of luck to you..seriously.

financegirl

Three words - DON'T DO IT!!!!

dopester

Sounds like a great idea bitsnbytes

You follow your dream of climbing this property ladder.

3, 4 or 5 properties to begin with, it'll soon be small time to big time.

bitsnbytes

Very useful tips Bungarm :T

Bungarm2001 wrote: »

HOW TO CHOOSE A LA Part one....
At the end of the day, we were overloaded with info and truly couldn't choose between any of 'em. Internet really was in it's infancy, so no real oppurtunity there for research, so, we went back to each of them and asked them all one question...what would you do if the tenant wanted you or us to come out to change a light bulb? One particular agents answer got him the job.

Interesting approach Out of interest what was the answer the LA gave that got him his job? And the answers that you stayed clear of?

Bungarm2001 wrote: »

PS Something else you should definitely take on board...you will actually 'earn' very very little if all the properties you propose to buy are with a mortgage. Relying on CG in these credit crunch times is a non starter. Very best of luck to you..seriously.

Thanks for that I agree we will earn very little if anything from this rental and we are ok with that. As I said earlier we are looking at this as a long term investment and hence we are on a repayment mortgage, so anything we get from rent will be a bonus. We are definitely new to this market and we thought it is best to purchase when the market is down since we could negotiate on the price (which we did). We might well be wrong, however most advice led us to believe we were on the right path. Even if we are wrong, it will be an important lesson (hopefully not too costly) and after all failure is the stepping stone to success :rolleyes:

Since you are an experienced landlord Bungarm2001, did you face any issues with rent not being paid? Can you give me some advice on how to proceed? I was thinking for going for either introduction only (£470 inc vat) or full management (9% excluding vat). Either way we were thinking of taking the landlords indemnity insurance which safeguards (or so it says) any non-payment of rent and legal costs. Do you think this approach is ok? Please do advise.

I've heard enough of suggestions like below and frankly I would like to hear an experienced landlords point of view

financegirl wrote: »

Three words - DON'T DO IT!!!!

bitsnbytes

financegirl wrote: »

Three words - DON'T DO IT!!!!

Thanks for taking time out to post the 3 words (actually 5) :rolleyes: However as you might have read from previous posts, I've already purchased the property. So are you suggesting I don't put it up for rent at all?

bitsnbytes

ad9898 wrote: »

This has to be the worst thing to do ( buy a property as an investment)

Why? All advice I've received otherwise suggests that the property market will always appreciate (in theory at least). Please elaborate

ad9898 wrote: »

With the worst type of property (a 1 bed flat)

Agreed, in hindsight we should have gone in for a 2 bedroom house, however they were about £20,000 more expensive and rent for about the same we are likely to receive for the flat

ad9898 wrote: »

At the worst time ( now)

Not so sure about that, it might be a bad time to rent, however it is a good time to buy as you can really negotiate on the price (and that's what we did, got it £10,000 cheaper than the asking price)

ad9898 wrote: »

I wish you all the luck but honestly you are going to lose here, its just a matter of how much.

Please do let me know why? I'd be interested to know As I've mentioned before it is a long term investment and hopefully will be of use for our children

bitsnbytes

SquatNow wrote: »

OK, first up, have you already BOUGHT the property or are you ABOUT to buy it?

Already bought the property.

SquatNow wrote: »

Have you signed or paid anything yet?

Do you mean towards the letting? If so nothing yet as there are no tenants in there. It's only been on the market for a week

Bungarm2001

The answer was 'tell them to leave at the next renewal..' which seemed fair to me!! :T I've learnt different as the years have gone by though, but it did help us in the very early days that the LA was clearly looking out for his clients, i.e. us. (gawd knows what he told tenants tho, but we never ever had any problems.)

Non-payment of rent was never an issue..it just didn't happen to us in those days, luckily. We never took out LL insurance that covered loss of rent specifically as it didn't add up for us. We still don't.

We decided early on that we would go the legal route for rent recovery, if we ever found ourselves in that position, and so far, this has not actually added to our usual costs. We factored a certain percentage of loss into the whole venture right from the start. I have to say though, that we both were in full time employment AT THE SAME TIME as starting off in the property game. We would have no way been able to afford to give up our 'normal' jobs in those days.

We thought we would have been able to relax now, being quite a few years down the line with fair amount of properties mostly unencumbered, and fully let, but no chance. The last 5 years have been beset by ever interefering legislation that costs more and more each year, and sadly even more on the horizon. It will never end as long as the gov. see LL's as cash cows with unlimited funds. :mad:

Anyway, again I wish you luck. You are far braver than I going into this venture in this unstable financial climate.

PS My one regret, looking back, we should have bought the two bed house instead of the one bed flat we ended up with...:D

tbs624

Bungarm2001 wrote: »

.....We never took out LL insurance that covered loss of rent specifically as it didn't add up for us. We still don't.

We decided early on that we would go the legal route for rent recovery, if we ever found ourselves in that position, and so far, this has not actually added to our usual costs. We factored a certain percentage of loss into the whole venture right from the start. ....

Agree - not all LLs use these types of insurance, and I think Bungarm's approach is the common sense one which works well for many. If you are signed up to one of the two main national LL associations you can , as I said before, be guided through any necessary rent recovery procedures. Go over to http://www.landlordlaw.co.uk/ and see what's available there.