Area of low tenant demand

by Jerry Jones

11:18 AM, 15th May 2014
About 6 years ago

Area of low tenant demand

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Area of low tenant demand

The first two houses I bought are in an area of Middlesbrough called North Ormesby. It was always a bit rough and tricky to get tenants but we managed. However, over the last few years the area has been transformed into somewhere with major antisocial behaviour issues. It is very hard indeed to get anyone to even view. Council agencies are reluctant to house any of their supported tenancy people there. Ironic really, as the problems in the area have arisen since they introduced selective licensing in the town centre and drove out the problem tenants, who have landed here. There is a homelessness unit at the council, but they have not referred anyone. Area of low tenant demand

I currently have one vacant, being handled by a “social” letting agency, who work with the council and expect the other one to be soon too. The original agency I used for many years, and still handle some other property for me, finally decided to stop handling property in that area and a specialist LHA agency didn’t work out well, with tenants moving out with no notice, having done a fair bit of damage.

It is a 3 bed, is newly decorated and carpeted, has a brand-new boiler to go in when we have a tenant (the last one was stolen, along with the copper piping, electrical cables and carpets while it was empty!), has uPVC windows and new carpets and flooring throughout.

I have offered it on the basis that LHA claimants are welcome and would accept the 2 bed rate. There are no tenant’s agency fees and I am offering free broadband and cable TV for the first 6 months. There were 3 viewings booked on Friday and only one turned up. That one hasn’t come back to us and is not responding to phone calls, so I’ll take that as a “no”.

I can’t sell because they are deep in negative equity, with their valuations having hit £75k in the mid-2000s and dropped now to £30k-ish, having withdrawn 85% to finance other (more successful) purchases.

The mortgage costs are extremely low because they are on low tracker rates so I can “carry” them with the income from other properties but am fed up with doing so.

This will get harder to do once interest rates rise.

Any suggestions on how to get long-term tenants in them?

Thanks

Jerry Jones



Comments

Mark Alexander

11:20 AM, 15th May 2014
About 6 years ago

Hi Jerry

This isn't my market I'm afraid.

Presumably you've tried listing it on DSS Move?
.

11:24 AM, 15th May 2014
About 6 years ago

Jerry

I can get it advertised on Rightmove for you for a fiver - see link below this post.

I suggest that the words "DSS accepted, no deposit, no referencing fees, pets considered" should be very prominent.
.

Mark Alexander

11:29 AM, 15th May 2014
About 6 years ago

Reply to the comment left by "Adam Alexander" at "15/05/2014 - 11:24":

Interesting plan Adam ... how about going one stage further?

Xmas rent refunded on three simple conditions:-

1) Your rent is up-to-date
2) You are respecting the property
3) You are respecting the neighbours

Desperate times call for desperate measures.
.

Julian Fernandes

11:41 AM, 15th May 2014
About 6 years ago

Ah ! good old Ts3 & Ts1 - Heroin central with a little crack cocaine sprinkled on top for effect. Do not visit on a full moon or giro day lol.

That particular block of properties off Beaumount Road is particularly difficult to manage if you are not on top of your tenants 24/7. However, I am very surprised you cannot fill a 3 bed round there.

if you can pm me or get in contact I can introduce you to the two main people who hold the majority of the properties round there, plus i know several decent families in the area who would be grateful to be considered. Admittedly the tenants I have in mind are never likely to stand for office , or join the police force, but they are local and want to stay in the area.
It is a specialist area, having spent 10 years myself door step collecting my top ups round there, i am pretty sure your not having a good time.

Mark Alexander

11:48 AM, 15th May 2014
About 6 years ago

Reply to the comment left by "Julian Fernandes" at "15/05/2014 - 11:41":

Hi Julian

We do not have a PM facility here so I will email Jerry with your email address so that he can make contact if he wishes to do so 🙂
.

Jerry Jones

11:51 AM, 15th May 2014
About 6 years ago

Interesting suggestions, and I'd be very interested to have a natter with Julian.

Mark Alexander

11:54 AM, 15th May 2014
About 6 years ago

Reply to the comment left by "Jerry Jones" at "15/05/2014 - 11:51":

Check your emails 🙂
.

Roy and Tania

11:56 AM, 15th May 2014
About 6 years ago

North Ormesby. Alas, an area that I was once acquainted.

"with major antisocial behaviour issues" - you pay it a compliment.

Having moved up to the NE, I purchased a property in a street off the infamous Beaumont Rd. I viewed in the morning. I should have calculated that the other neighbours were still in bed and not at work. The street was largely without cars, this was not because the neighbours were using them to get to work. The problems became reality when I discovered that 8y.o's had tried to set fire to my curtains through a small sash window which had been left open on the morning of day 2 in the property.

Oh dear and while I can empathise a little.. did you not do your research either? was the temptation to become a LL for such a meagre amount blind you?

selective licensing did not cause the blight in 'doggie' - an endearing term for some of the nocturnal activities that have taken place for years in this area of the Boro'. The problem has occurred as a result of LLs willingly accepting tenants from all walks of life without the necessary checks. The good folk had all moved out in 2000 - 2004. Me also. Folks with a few quid bought out the neighbourhood with a view to profiteering without further thought.

Nothing will solve the problems of North Ormesby - save perhaps a small tactical nuclear warhead.

Jerry Jones

12:02 PM, 15th May 2014
About 6 years ago

Reply to the comment left by "Roy and Tania" at "15/05/2014 - 11:56":

I fear you are right. However, we are where we are.

I bought in 2003, from a portfolio building company and was one of those "soft southerners" who had their trousers taken down by that particular industry, tempted by the idea of a refurbished house for 25 grand.

I avoided the real crooks that made the headlines but this lot were useless rather than actively dishonest. Luckily I got rid of the one in Hartlepool that they found me and pretty much broke even, which is arguably better than I deserved!

I know better now, and have two others in M'boro which have worked far better, although I have subsequently been buying down here in the West Country.

Yvonne B.

17:36 PM, 15th May 2014
About 6 years ago

I bought some properties in a no go area 10 years ago on the basis they were fantastic value for the return - plenty of the wrong type of tenant trying to get in though!
It's impossible to rent to good people when all the other landlords are renting to bad people - but they are in the same boat as you - they can't get good tenants to stay either.
If you seriously want to make it work - get hold of all the other landlords in the area, you'll be surprised how many are in the same boat as you and wish things could be different - then between you all - change it!
Collectively remove all the bad tenants, tidy up the streetview & the houses, speak to the council beforehand to see if they have some nice tenants they would like to put in all together - have a date to work too, you can change the area overnight.

The incentives to the lazy landlords that are getting the rent and are not that bothered is that their capital values will return - possibly double - make £30k !!, they could get higher rents in the long term and they will have a stream of better tenants available to them in the future.

Get on the land registry - find the other landlords for £4 per house, get someone at the council to devote some time to the project also as they will get some houses to rent afterwards.

People are now asking to move into my properties on what was a no go area - and they are still giving a fantastic return. A lot of the other landlords have asked me to manage theirs too because they see what I have done. - You need to get a network going between you and the other landlords, speak to each other, keep them informed - buy out the ones that won't help at the low prices - you can turn it around!

Good luck
Yvonne

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