As well as the lovely house we live in now, my husband and I also own a rental flat. I am well aware that many people aspire to have a second property or a rental income but I’m going to put my hand up here and say ‘My name is Lottie. And I just don’t like being a Landlord.’ Sounds like some sort of landlord’s anonymous meeting!
I must start this post by saying that the rental flat was not out of choice but out of necessity in order to move. I bought the flat 11 years ago with my sister as a new build and adored living there. It was a coach house so in effect was like it’s own house with a nice garden. Then a few years later Edd and I decided to buy somewhere together but after a lengthy search we just couldn’t find anywhere as nice for our money as the flat. So we bought my sister out. As the flat had gone up quite a lot in value due to market changes we obviously ended up buying it at a higher price than I originally had. Five years ago Edd and I decided we wanted to move. Somewhere bigger and a more long term house. The problem was that the market had crashed. Great for buying, not so great for selling. The flat had dropped dramatically and if we sold we would end up loosing our deposit in it and owing the bank in excess of £20,000. Not a nice prospect.
I really didn’t think we would be able to move but after discussions with our bank they agreed to give us a second mortgage and keep the flat on as well. The two mortgages would be linked together, which was enough to make my eyes water, and had certain conditions attached to it but it meant we could buy our next house.
We were very lucky that we easily found our first tenants who were lovely. That’s not to say it wasn’t without problems. The day they moved in the boiler broke due to some freakishly cold weather that had frozen the valves. Cue copious calls to the insurance company and emergency gas engineers to try and get our poor tenants back in. I’m surprised they didn’t walk out there and then. Six months later and we receive a knock on our door from our old neighbour to tell us water was pouring through the roof of the garages from the flat. The tenants had gone out so he came to find us. I was 5 months pregnant at the time and just cried! Edd dashed off down to the flat to find an exploded washing machine and melted kitchen. I kid you not, it had actually MELTED when the machine malfunctioned. How can so many new appliances go wrong so quickly? We then faced a lengthy insurance process to replace the kitchen, flooring and washing machine. On the plus side the flat had a lovely new kitchen.
Over the following years we have been lucky enough to have some great tenants and only one nightmare one. We found we have mainly rented to friends or friends of friends. Oh, and the Mother-in-law. Best tenant ever!!
There haven’t been many other major mishaps but there has been an ongoing list of repairs and maintenance that are required each time someone new moves in. In short, it’s expensive. Although the rent covers the mortgage and some left over we inevitably end up spending this on maintenance at some point. I also don’t think the property is going to go up in value dramatically any time soon.
When our current tenants announced they were buying a house we made the decision to sell. We are still set to loose quite a bit of money but that is something we have, reluctantly, now accepted. Some might say that we should hold on to the flat but neither of us really have the time or inclination to manage this. We could pay an agent to manage it for us but we live 5 minutes up the road and after all the work on our current house we have an enviable contact list of tradesmen. My current tenant laughs when I say I will send round my electrician, plumber, washing machine repair man etc etc. The only option would be to hold on to it long term, as in 20 years, in the hope that the value goes back up.
I know that the likelihood of us getting a second property again in the future is slim to none and I’m still not sure it is the right decision to sell. But in honesty I just don’t want to deal with the hassle.
Do any of you have a second property and if so how do you find being a landlord?
My partner and I decided to move to London c5 yrs ago and ventured into the rental world with the home we were living in. In a similar position to you – we had bought pre-crash and would risk loosing a significant amount on the house so decided rental was the best option. We initially had the rental run by a property company but when I found myself chasing them up over certain aspects I questioned what on earth we were paying 10% of our rental income for. I regularly returned north for work so could pop into the property when needed plus family still lived locally.
We had dream first tenants, the second tenants were good but left us a bit in the lurch by buying a new property but only telling us at the very last minute and now onto the third who are absolutely fine.
My partner and I have since separated and he’s moved overseas so I now feel it’s all on me as I am back living closer to the property and it’s “easier” for me to deal with it – which I don’t mind but I dread the the thought that something could go wrong! We’re now back in a position where we want to look at selling but we would still loose money on the property but I’m at the point where I feel it’s time to cut our losses!
Good luck with it….
It’s such a tough one isn’t it as you do always have that underlying feeling that you may get a ‘nightmare’ tenant or something really drastic may need fixing. Good landlord insurance is essential! We had the same decision on the management fee as in truth with most tenants we have barely needed anything doing and it would have felt like throwing money away really. We’ve had to really get to grips with the money we will loose but it is worth it (I think). Hope you come to a good decision on yours xxx
I know how you feel. It’s a dream of so many to own a rental. People think it is a steady stream of income when the reality is rent hardly covers the mortgage, agency fees plus maintenance. And then January comes and you have to pay the dreaded tax bill! I know it will be worth it in the end but we are unable to sell because we bought at a peak. We see as a long term investment but when the tenant rings you at 10pm saying the electrics have gone you do question is it worth it?
Oh no, the tax bill!!! I forgot about the fun of that bad boy! Our conclusion was we either needed it as a long long term thing but we just weren’t really ready for that. And as you said when we work out the finances we are barely left with anything after all the maintenance, etc etc and just a load of hassle really. I fear it would take a long time for it to go back up in value hence the decision to sell. So long as property prices don’t rocket next year I won’t mind!!! x
Both my husband and I had property before we met which we rented out. When we bought our new house we made the decision to sell both when financially we should have kept my flat – the rent covered the mortgage plus fees and it was low maintenance but I just hated the THOUGHT of something major going wrong – the freeholder was also a total creep so was glad to be shot of him! If the melted kitchen had happened to me I think I’d have had a breakdown! I think rentals are a nice idea in theory but pretty risky in reality when you take into account the market and the fact you may be stuck with nightmare tenants. And that’s all on top of a day job!!
I was very close to a breakdown I can tell you! As you say, it is one of those which sounds great in reality but I think the days of making loads of money on property is over (for most people anyway). x
When we moved out of London we decided to keep our flat on and rent it out. That was 2 years ago and everything has gone fine so far as we have lovely tenants but they’ve told us they plan on moving out this year and now I’m really worried that we’re going to end up with nightmare tenants! We don’t plan on selling though, we see it as a long term investment which might hopefully mean we don’t have to work til we’re 90 to be able to afford to retire! Good luck with the selling process.
Part of me really does think the same and I have a feeling I always will. there will probably be a bit of regret when we are old and grey that we didn’t hang on to it. I definitely would be if it was in London. In 5 years we have only had one bad tenant so I’m sure you will be fine. She was actually fine when she was there, no problems, but when she moved out we discovered she had been a heavy smoker so we had to replace carpets and redecorate throughout, she was in serious debt with all sorts of threatening letters and she had broken pretty much every appliance going!! All got sorted in the end. Good luck with finding lovely new people x
My husband and I bought a shoebox of a flat in South London nearly 8 years ago, which was great until we decided we wanted to move back North to start a family. We’d bought the flat at the height of the property market, and then the market crashed and if we’d have sold at the flat’s expected value we’d have made a loss. So we got a buy-to-let mortgage and paid a local estate agent to manage the property for us. That was galling as it cost over £100 a month. If we’d have stayed in London we could have technically managed the property ourselves, but moving to Manchester meant that wasn’t possible. We had no real issue with tenants but I didn’t like the bind we had to go down and clean/tidy whenever we needed new tenants and this year we finally decided to sell. Everyone thought we were mad and should keep onto it. And perhaps if we weren’t both working, with a toddler and another house to look after we could have. If property is your thing, and you look at property management as your job then all power to you, but for us it was too much. I feel much ‘lighter’ without that extra responsibility. x
Stacy, this is exactly the same for us. It’s all fine when the tenants are in and all is going well but such a hassle when it is time for new ones and we too have another house, jobs, kids and life in general. I just think sometimes you have to just make your life a little bit easier. And yes we are loosing money but now we have made the decision to sell it feels so much better. Now to deal with solicitors etc. Oh fun!! x
Lottie I think that’s a really brave decision, well done 🙂 People don’t seem to take into consideration the emotional burden property can bring, especially when talking about buying and selling. They just consider the financial side, but money can come and go in a flash – living a happy life is a thousand times more precious!
Oh the nightmare tenants! In the grand scheme of things ours haven’t been too bad in that no one has ever trashed the flat, but we did have a chap who phoned at 11pm asking how to pay council tax (he was newly single and his wife had sorted it all out before). The same guy also started keeping a tarantula as a pet, which we only found out about when it escaped into the hallway and was rescued by a very brave neighbour. Such a relief when we finally bit the bullet and sold up!
Oh my gosh, so glad he didn’t leave the tarantula behind when he left!!! x
I have literally just had a phone call from my conveyancers saying we will complete tomorrow! Biggest relief of my life. I gained a flat when my dad passed away and it has therefore never been something I could think positively about. My mum in fact managed it for me, but in a way I wish I’d just left it to an agent so as to have as much distance as possible from it.You’re right about the financial side too – I’ll be lucky to pay off mortgage and fees etc. without having to hand over yet more money.
Even without direct dealings with it, just knowing it was there and could cause problems created so much anxiety I felt physically sick at times. I will be celebrating getting rid of it this weekend! Time to move on 🙂
Whoop! Exciting times Beth. I think we will feel relief when we finally complete as it will be a weight off even if we will be paying mr bank manager and mr estate agent lots of our lovely savings. Hope you have a nice celebratory glass of bubbles and raise a toast to your Dad xxx
In defense of letting agents; it’s what my husband does and it’s a really tough job where the returns sometimes aren’t worth the hassle involved. It amazes me what some tenants think is acceptable behavior. I’ve seen properties where the tenants have torn wallpaper off the walls, lit fires in the middle of the living room, smashed every cupboard off the kitchen walls, human waste in places it shouldn’t be! And these aren’t low end, crappy flats he’s letting to dodgy tenants. Most are let to professionals who just seem to have no concept of right and wrong.
On a personal note, I’ve also experienced when letting goes wrong. My late Gran had to move into sheltered housing and as she was reluctant to sell her house, we decided to let it instead to cover the costs. We spent thousands redecorating it to make it more ‘suitable’ for a modern family and then moved what seemed like a lovely family in. Their references/credit checks were all good and at first they seemed perfect tenants… then they just stopped paying rent. It took nearly 6 months and several court orders to get them out, and when they did it was a midnight flit. Not only did they leave us with all the rent arrears, they’d also trashed the house (broken beds, broken appliances, all the new pots, pans, kitchenware had disappeared, rubbish piled everywhere, scribbles all over the walls). We eventually found where they were, took them to court and they now have a CCJ against them, but it’s not worth the paper it’s written on and we’re unlikely to ever see the thousands of pounds they owe my Gran. My poor Mum was distraught and we had to hide most of it from my Gran as she would have been gutted to see what happened to her lovely house.
I know so many people who dream of owning a property portfolio, and I just don’t get the appeal. My husband does have landlords on his books who have invested wisely and do make a tidy profit, but for every one of those he has someone who is renting out their flat to live with their partner and just not breaking even.
So sorry to hear about your Grans house. That’s so sad that people can be like that. The problem is there is just no way of knowing and I agree its not the letting agents fault for finding the tenants either. If credit checks and references are in place (as they were with our bad tenant) then they can’t know any different. I can’t imagine what your husband must think when he sees some properties. Some people just have no respect do they and it’s just so sad. It’s good to hear from your husbands experience that ether are plenty more people like me who just rent as they have to. xxx
We love our rental property. It was our first home together and we lived there for 7 years, it was a massive project which meant that we were able to plough quite a lot of equity into it and add a good deal of value. it made sense to keep it as a long term investment. We are very sentimental about the house so I was very nervous about letting it out.
We are fairly new to this so I may change my mind later on down the line! We have had ups and downs (the lock broke on the first occasion our tenants tried to get in meaning a brand new lock from an emergency locksmith! ouch! they were stuck outside with a van full of furniture!) but we are lucky to have wonderful tenants who have made our house their home.
I hope that one day it will e a little nest egg for our children and will in time start to pay for itself.
I dislike the tax implications mind you!
It’s really lovely that you get to keep your first home and especially one which you poured so much love in to. I think if you can get a nice tenant in then you are set. My current tenants are the loveliest and it was their first home with their baby so they have really looked after it. I do wonder if I will regret not keeping it as a nice investment later on but oh well. And yes, Mr Tax man is not fun. x
This is a timely piece as I have just told my tenant today that I am selling up! The hassle and time involved has been very stressful, so I’m going to do some work on my lovely little house in Bath and sell up. I’ll make some money so I’m planning to pay off debts (student loan!!) and invest the rest. No one will look after your home and love it like you, so the labour involved in sorting out painting, decorating etc is stressful and no longer worth it. I’ll be glad to see the back of it and move in with my boyfriend. Being a landlady is not all its cracked up to be!! Good luck with selling up Lottie! X
Good decision I think Kate. It really isn’t easy is it? At least you will have a little but of profit left which is great and means it has been worthwhile in the long run. Very jealous of you being student debt free! xxxx
Hear, hear!
I have just decided to sell up – we’re getting a valuation done tomorrow. We have moved to Sydney and thought that keeping our flat in the UK would be great – the market in London continues to rise (thankfully) and we have friends/acquaintances in there causing no trouble and being perfect tenants.
And yet… it’s still a massive pain in the bum. All those tax returns, increasingly harsh tax laws re expats, and general upkeep from 10,000 miles away is a nightmare. I will miss it so much (it was my first home which we renovated so lovingly) but I am focussing on putting the money towards our first Aussie home, and buying something that we really love over here. It sounds like the dream but being a part-time landlord has been a fairly thankless task – much more time consuming and stressful than I had expected, and god forbid if my tenants ever wanted to move out and it was empty for any amount of time, that would just push me over the edge. I’ve heard it’s a good time to sell so crossing all fingers that it’s been a great investment!
Oh my gosh Stacey. I can barely cope being up the road, let alone on the other side of the world. I too always feared not having tenants in as the mortgage would be a nightmare and there are also charing tax rules over here from next year which is part of the issue. Hopefully being in London you will have made a lovely profit and can buy an amazing ozzie house. Very jealous. Good luck xx
So i think I’m on the other side of the fence. Between my husband & i we have 3 BTLs, holiday home & our home. Only one of the BTLS makes any real profit but this is not why we have them.
We want to be able to help our children but in the future & support our retirement. I’m about to go full time self employed at 33 so it will hugely help there.
We’ve had bad & good tenants, 1 is agent managed and 2 & holiday house we do ourselves. (Www.seasgair.co.uk – if anyone fancies a holiday!)
We’ve put blood sweat n tears into making them tenant ready & practical. Good insurance and talking up extended warranties and a set of practical diy skills have paid off. It is hard work and can be a pain but i feel really lucky – we don’t earn a fortune but have chosen to invest in ourselves and our future.
We once rented out our home when we relocated and that i won’t do again, it doesn’t work its too personal too you. I couldn’t handle it when things went wrong, but the others I’m good with.
Hope you manage to sell your place quickly and smoothly are you tempted to try an online estate agent?
Hi Sarah. Oh I wish I was as brave as you. I think I struggle with thinking long term obviously and always worry that it is just going to drop in price. All being well the flat has now sold (hoorah!) and is set to go complete next month before the changes to the BTL stamp duty. Not ideal given the loss but we do both feel like a weight has lifted. I think if we actively chose to purchase a BTL it would probably have been different as then, like you, we would have been viewing it as a long term investment. Too many decisions! xx p.s. I’m taking a peek at the holiday now! x