Hi there and welcome back. This time of the year is fraught with problems for most property investors especially here in the UK because this kind of sub zero weather conditions we are experiencing means only one thing burst pipes, water floods and broken down boilers.
Then you get the heating engineers saying, “Oh it’s not worth repairing you need a new one”. Now I hate that because you’re then reliant on assessing whether they are being truthful or just after a bigger job and therefore more work and more profit. That’s where for us it comes down to knowing and trusting your letting or managing agent to make the right call After all I cant drive up to Newcastle and find out whether I’m being fleeced.
Relationships Are Everything
So the moral of the day is – build a relationship with you managing agents – it needs to be on trust and mutual respect. And believe me you’ll know when the relationship is turning sour and unfortunately it does happen.
Go With Your Gut
For us it’s only happened twice and on both occasions I was very patient (too patient in hindsight) and it cost me dearly. Listen to your gut instincts and react. I had one agent who just simply stopped communicating that’s always a bad sign, eventually he passed me on to one of his colleagues who tried her best but was certainly not capable of the job and a latterly discovered she was only part time. Kicked myself when I found that out and kicked them into touch – but it was an extremely painful and costly experience costing me thousands.
However well your managing agent knows the area, understands & is on top of the benefit schemes, tenants come and go and although we would all like them to look after our properties as if it was their own – that’s simply naive and not going to happen.
Don’t Beat Yourself Up
We have had several up & leave recently, no warning, normally its when the benefit payments stop or you get a letter from the council saying it been suspended, that’s when you need to move fast and establish what’s gone on and most importantly what state they have left your property in. And believe me its always bad news it all about the degree of damage, rubbish left, soiled carpets that means you either breathe a sigh of relief or know you’ll need to dig deep to get it back into a lettable condition.
Here’s your reality check – we all get annoyed when tenants leave owing rent and necissating a refurbishment and therefore cost but you can’t let it get to you – if you do then either don’t get into property investing or if you’re already in get out, sell up and fast – because its not going to change and it’s the downside of what we do, believe me.
Here’s a live example
Property I own in Scotland, tenant been in there for about 4 years. Couple with 2 young Children. Had historically been slow on rent but I managed to get housing benefit mandated direct to me, so fine ran like clockwork – suddenly no payment, agent tries unsuccessfully to contact tenant – finally find out, boyfriends left her, she’s lost the plot & gone back to her mum.
So we gain access and I just know this will not be cheap.
This is what it looked like
Getting shot of rubbish is expensive these days and there’s loads of it, funny how all these tenants who leave just do so leaving most of the possessions behind, weird.
Anyway so rubbish clearance,
Now Fresh & Clean!
complete redecoration, some new internal doors, kitchen and bathroom repairs, electrical socket repairs, new carpets and flooring throughout and get rid and treat damp and mould where they have been living with little or no heat on – amazing!
Kitchen looks great!
So £2,500 later it back in a lettable condition.
So that property will stand me in at a substantial loss this year – tenant was in arrears for 2 months, 1 month to refurb, 1 month for new tenant – so 5 months no rental income and a bill of £2,500 total loss over £4,500
But hey that’s property investing – so my final motto is cash flow is king and always keep a stash of cash in your back pocket for the unexpected.
Till next time