Guest Blog: Being a private landlord

(Last Updated On: October 14, 2016)

This job requires the management of many different factors. The key points being, the finances, the property and the people.

Financing a rental property is a big deal. Imagine saving for your first home, then add on trying to save another deposit while paying a mortgage and providing for your expanding family. Next you have to find a property that can be used for renting, convince a bank to invest in you, borrow extra money to convert the property to the ever changing standards set by the local authority and then find reliable trades to do the work for you.
By now you are paying 2 mortgages and you have to start looking for your tenants. Advertise the property, this can cost hundreds of pounds. Meet perspective tenants and vet them which is time consuming and expensive.
All of this before a penny of rent has landed in your bank.

Now you wait anxiously for the first rent to clear in your bank. Most of the time it will clear as planned and provide huge relief until next month. Sometimes it will be a day or two late, the whole time of which you will be checking and wondering what is going on.

Less frequently if you are lucky it will be a week late and then there’s the missed month and in extreme cases the missed months.

By now you are paying your trusted tradesmen for running repairs and maintenance including Fire alarm certification 6 monthly and Gas certification annually.

The next skill you need to master is the people management.
Hopefully you will be lucky and have the kind of tenant who just sends the rent and enjoys living in your property.
You would also consider yourself lucky if you get the rent on time but do have to keep tending to every little request they can think of. Usually because they are trying to be a good tenant.

Unlucky if you have taken on one of the minority who live in squalor, cause costly damage. Look for every possible reason to blame you in justifying not paying the rent and cost you thousands in lost rent and damage that you have to repair when you are lucky enough to get rid of them and sometimes even while they are still living there knowing full well they will trash it the second you walk out.

Times change a lot.

General 1970’s UK lifestyle,
People of all classes went to work in the day and spent most evenings in their local social club. A lot more people rented properties and people were generally very house proud. This is clearly visible in smaller rental properties.
The hard drug culture added a twist to this with suffering addicts living in squat like conditions and providing the age old problems to landlords of non payment of rent and damage to property.

By the 1980’s people were buying their homes, less time using social clubs and more money on home life. The hard drug culture was well embedded in the rental world now as many of our workforce were buying houses and many private rentals were left at the bottom of the property market taken mostly by the unemployed. Blocks of flats would be dark, cold, sporting decor from the 60’s and 70’s, old vinyl floor coverings, vile bathrooms shared by many and cleaned by none. The risk of finding a used needle was more of a certainty than a risk.
Local authority housing has always had a very unique culture and is very different even in present day. I would say this is something to do with the small community spirit held together by the fact people tend to spend their lives on the estates as apposed to town flats that are looked on more like somewhere to party.

The 1990’s and 2000’s were much the same as the 80’s only a lot more people were renting at the beginning which I think increased living standards and quality of tenants as landlords had more to choose from.

Today we are in a very special time. We have many more people in work, this pushes living standards up as people value their wages and what they have had to do to earn them. I think being a materialistic civilisation had done a world of good to the renters in our population. Even if you earn little you can still treat yourself to something nice. The old blocks of flats with dirty shared bathrooms are being transformed into self contained flats with wifi and carpeted hallways. Landlords are providing real homes due to market demand. Everyone is a winner in this scenario.
Except the minority who lack basic education and understanding of longevity. This will always exist until everyone works as a team.

Currently there are very small margins in property on the whole. There were times as in the early 90’s when it could be bought cheap but now most investors rely on a 5-10% return. You need around a 40% deposit and a couple of hundred grand of credit to get in the door. It only takes this minority to come along or someone to loose their job and the pressure is on.

D. Philpott


Team account for We Are South Devon.