HMO Landlady Becomes  A Letting Agent!!

by HMOLandlady

10:14 AM, 25th January 2012
About 9 years ago

HMO Landlady Becomes A Letting Agent!!

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HMO Landlady Becomes  A Letting Agent!!

Last summer I met a very well heeled friend for lunch and listened as she commiserated her devastating investment losses over the past couple of years. She said “I need to get into property! It’s the only thing that I can rely on for the future and I’m fed up of hearing how much money my financial advisor is losing me – and he doesn’t even apologise!”.

I accepted the challenge of preparing a buy to let proposal for her based on the different markets, comparing returns in the local area and seeing whether it was student/HMO, family or renovation projects which would float her boat. Heady days, lying in the garden carrying out research courtesy of wi-fi – what better way to apply one’s brain? It was an interesting exercise as I’m so caught up with HMOs that it’s easy to forget the other markets. Doing the financial analysis vs hassle factor was enlightening too and, not one for numbers, I actually enjoyed fiddling around on Excel with percentage returns!

Report prepared, we ran through the options and she settled on three bed houses for the family market. Excellent, safe and there are loads to look at! Armed with her £500k virtual investment pot, I went shopping. Looking round other people’s houses, spending time chatting with estate agents in their Smart cars and viewing houses objectively rather than emotionally was a great experience. The last time I had access to so many strangers’ kitchens was as a consultant for Pampered Chef cookware selling utensils and bakeware to the host’s guests.

Shortlist was completed so she, her builder boyfriend (always a good idea to have a builder for a squeeze – great rates) and I finally settled on a mid terrace overlooking a park. It was a 2 bed with the bathroom in the back room but the plan was to cut it in half and make a small, but usable bed 3.

House has now been renovated and looks clean, airy, etc.; carpets are too light for my liking so we’ll just have to choose tenants who have a habit of removing their shoes. She asked me to meet her at the weekend and came out with the dreaded words “I’d like you to let it out for me”. Now, I’m not turning business away it’s just that my tenant find and referencing methods are different from a letting agent’s and, if I choose the wrong tenant, it’s my risk not someone else’s.

I met a couple of agents and I now have a warm glow of satisfaction that the potential rent is as I predicted and all the bits and pieces I recommended to the builder are correct for the rental market. The weekend was spent reading up advertising through property websites, reference checking and preparing a property inventory that would stand up in case of a dispute. The daft thing is, I do this numerous times a year for my HMOs but dealing with a friend’s pride and joy is nerve-wracking to say the least. If my tenant doesn’t pay I lose £80 per week, if hers doesn’t £800 a month is lost.

Needless to say, the letting agents are gagging for the instruction. I, in the meantime, baulk at the idea that tenants have to pay £100 per adult for credit and reference checks and my friend would have to pay 2 weeks plus VAT for the tenant find service. So I sit here weighing up whether I should take her money but potentially choose the wrong tenant and miss a vital piece of paperwork that will cost millions of pounds in the case of eviction or just hand the instruction to an agent who can have the house tenanted in a “matter of days” and blame him if it all goes wrong.

In the meantime, the HMOs are quiet, everyone’s behaving and paying rent, the police don’t have my addresses on their beat watch and I’m wondering if a nice, charitable mortgage lender fancies giving me a 100% HMO mortgage to provide accommodation for the new influx of the under 35s LHA claimants – anyone?


18:34 PM, 25th January 2012
About 9 years ago

You might wish to consider not using normal credit checks; they are a waste of time.
What about £99.00 and see if you can obtain a RGI policy on behalf of the Landlord.
If they pass and choose not to take a particular property; it maybe that the RGI pass for that tenant could be used without  further charge from the tenant on other properties.
It is well known that credit checks are being passed by tenants on whom tenant alerts are being sent by LRS on the same day!!
I wouldn't trust a LA's credit checks.I would wish to carry my own one in conjunction with an RGI policy check, which doubles up as the same thing.

Mark Alexander

19:09 PM, 25th January 2012
About 9 years ago

As a letting agent Serena could use the same supplier asy brothers letting agency and get credit checks including guarantors and good RGI for less that half of that price Paul. I have spoken to Let Alliance based on your suggestions Paul and they hope to launch the product to landlords via Property118 as soon as March this year. Watch this space 🙂

20:15 PM, 25th January 2012
About 9 years ago

Good to see that thinking of of the box is occurring.
If I have been any part of that occurring then that is good but unexpected news.
But that is what your forum does; it makes us talk and you pick up ideas and pass them onto industry professionals which hopefully results in better products for us landlords.
So well done everybody who contributes to your site including apparently me!!!!!!?

20:16 PM, 25th January 2012
About 9 years ago

Good to see that thinking of of the box is occurring.
If I have been any part of that occurring then that is good but unexpected news.
But that is what your forum does; it makes us talk and you pick up ideas and pass them onto industry professionals which hopefully results in better products for us landlords.
So well done everybody who contributes to your site including apparently me!!!!!!?

Mark Alexander

20:40 PM, 25th January 2012
About 9 years ago

We are very grateful for your comments Paul. I must admit some of your opinions do make me squirm occasionally. What I like about you though is you say it as you see it 🙂 

23:35 PM, 25th January 2012
About 9 years ago

You've got it Mark I come at things from how they affect the botom line; basically the money in my pocket.
I after bitter experience see the pitfalls and when you don't have any spare money to cover foul ups is doesn't half concentrate the mind to find ways of mitigating or even ideally eliminating the risks.
Sometimes people don't like to acknowledge the inherent risks they face.
But to ignore reality and adopt an ostrich mentality is surely very naive.
I don't have the luxury of being able to make any more mistakes.
So my only choice is to adopt an extremely agressive and thorough approach to all the risks I face.
If some find the obvious and apparent reality too strong then that is tough.
The point is we don't want us fellow LL landlords suffering at the hands of alleged industry professionals and wrongun tenants
Nobody will ever sympathise with the poor old landlord.
We all know where that lies in the dictionary.........between

Consequently as landlords we all need to be on our guard to the best of our abilities; with the assistance of fellow professionals etc  to ensure we don't get stitched up by the parties we involve ourself with in this business.


18:06 PM, 30th January 2012
About 9 years ago

Thanks Paul and Mark. I was sent an interesting email today by LRS about referencing and will be taking up their services. However, I've been kept awake at night trying to think of excuses to turn down tenants who I don't think are suitable. I wonder if letting agents have a top 10 'letting tenants down gently' list of excuses or if they just say NO.

We've agreed a phenomenally low rate for my services so if, if this a success, I shall be doing a rate review! I will be taking your comments on board and will know every detail down to the applicant's underwear size by the time we've finished.

Have had to post as Guest as I can't remember my password.


Mark Alexander

19:03 PM, 30th January 2012
About 9 years ago


Sorry, your credit score isn't sufficient for this property, can you get a guarantor?

Sorry, your guarantors credit score isn't high enough either.

The landlord has had a lot of offers and it was a very difficult decision but I regret to tell you that your application was not successful in this instance.

Sorry, the landlord has accepted a higher bid.

We have already put a couple of applications to the landlord but I can process yours and put it to the landlord if you wish.

Ever so sorry, when I got back to the office I had a message from the people who viewed yesterday to say they wanted to take it, would you like me to get back to you if they drop out?

Sorry, the landlord has just called me to say no benefits claimants, pets, children, sharers, smokers etc.

We do have a number of viewings lined up for this property so we will consider all applications and leave the landlord to make the final decision.

Really sorry, I've just had a call from the landlord to say that he's let the property to a friend.

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