16:23 PM, 26th June 2012, About 10 years ago 4
By 1999 I had realised that I needed to put money aside for maintenance. Tenants were moving in and out all the time and I was bleeding money on carpet cleaning, magnolia paint and replacement carpets at an unbelievable rate. I’d started investing into bigger houses and renting them to people with children and groups of professionals so the wear and tear was much higher. Remember, I’d also been furnishing my properties with cream carpets. When they got shabby it was difficult to find new tenants without replacing the carpets.
I remember going into an independent carpet retailer in Kings Lynn and talking to the owner about my dilemma. It turns out that he was a landlord too. He explained that top quality carpets are great for your own home but not for rentals. He agreed with what I’d learned about colours and also introduced me to a new colour “cappucino” and felt back bleach cleanable polypropelene carpets with quality underlay. I’ve not used anything else ever since. You can see some examples on my brothers website here. This was the four bed house with the green carpets that taught me so much. Bear in mind, the before pictures were taken whilst the house was still less than a year old and I’d purchased it from new from the builders. Check out the tenants handy work. I mentioned the purple walls in my last blog but I forgot to mention the green and the blue paint and also that it wasn’t even emulsion, it was gloss! Try covering that with your “one coat” emulsion!
If you need to re-paint a dark wall in a light colour prime first with a product called Zinzer. Also, curtain polls and curtains are expensive, blinds look better in modern properties. My preference is dark wood Venetian blinds. The light in the room can be easily adjusted and if you spend that bit extra they are very hard wearing.
My income is from rentals but the mortgage is not my only outgoing. It’s so easy to forget that. Just take a look at the emails and adverts you see from people selling investment properties. They all do the same calculation, rent minus mortgage = profit. GET REAL PURRLEEEZE!!!
I created a suite of number crunchers on a spreadsheet to analyse the viability of each of my properties. Last year I had them programmed into this website. The purchase refurbishment calculator assesses real profits (or losses) from buy to let deals, the simple to follow format prompts you to consider all of the costs as opposed to just the mortgage interest. It then also presents you with a figure to tell you what interest rate your property breaks even at. You’ll hear lots of landlords talking about stress testing interest rates, this is what they mean. It also works out some other cool stuff like yield, return on capital invested and it’s really easy to use and free so feel free to give it a whirl. If you’ve got a few properties then you might want to do a similar analysis of viability across your whole portfolio. For this you will need the Portfolio Review Calculator which is also free to use. To access them just click on the bold, orange underlined text.
I’ll leave you with a funny little story now, at the end of 1998 my daughter Amy was six years old (going on 16!). A proper little madam, her doll in a handbag, covered in make-up she’d had for her birthday and donned with a feather bower she’d got from a kids party. We spent most weekends looking at properties and a lot of time in show houses. One lady in a the showhouse we popped into that day asked, don’t you get fed up at looking at houses Amy? Hand on her hip, eyes rolling in her head Amy responds “it’s no life for a child is it?”.
The best way to let me know that you are enjoying reading these stories is to leave me a comment below and by sharing them via your social networks using the “Caring is Sharing” buttons.
Thanks in advance, more to follow soon.
Part four – My first property management checklist
You are here >>> Part five – Buy to Let Maintenance Budgets
Part six – Do landlords have to provide lawnmowers?
Part seven – Landlord, Tenants, Dogs, Pets
Part eight – Vintage 2003
BONUS ARTICLE >>> My relationship with Leathes Prior Solicitors and Property118
Part ten – Online Letting Agents Review
Previous ArticleForecasts Down for Commercial Property