Landlords in their 50’s cash in: “Selling now is the equivalent of 20 years of rent”

Let’s cut to the chase. You’ve been in property for the last decade, perhaps even longer. You’ve seen the news, we all have, and things just don’t look great for landlords. Last year, I took a good, hard look at my portfolio after finally making the decision it was time to downsize.

Like many of you my first thought was: okay, let’s just cut the chaff, get rid of the low performing properties, get rid of the ones where rent isn’t worth the mortgages, get rid of the ones that’ll help me pay that tax bill off, and I’ll keep the rest. Perhaps I’ll cut it down to 5 properties were I keep the rent flowing in and sit back to retire knowing that whilst being a landlord isn’t nearly as profitable as it once was, at least it allows me to enjoy the holidays I want to go on, and ultimately wind down in without the stress.

Then came the impending tax changes. Then came the Renters’ Rights Bill. Then came the Decent Homes Standard. If you think these are fair, then I’m with you, I think that tenants in this country absolutely deserve the right to a decent standard of living. I’ve seen shocking buy-to-lets in my time and thought “we need to get our acts together here.” But this is something else.

In fact tenants’ rights are about to swing so far the other way that they’ll be able to claim back years of rent from just a single, fixable issue with your properties. Mould or damp in the bathroom? Under the new bill, tenants will be able to claim back up to 2 years worth of rent.

For some of our properties, that can be as much as £24K, and there’s nothing you can do about it. I had a landlord come to me saying he was terrified because of this very same issue; mould in his tenant’s bathroom, but the tenant was refusing access. He was told to get it fixed plus other repairs in 4 weeks. Well guess what? Even if you can’t get access to your property to fix the issue, they’ll still charge you. If it’s an issue that the tenant’s responsible for, they’ll still charge you. Want to get lawyers involved? Well brace yourself for another £20K in legal costs.

That’s when I realised: what on Earth am I doing holding on to these last few houses?

Now, selling these days might get you 85% market value, but let’s run the numbers. Got a £120,000 freehold house in Manchester yielding £700 monthly? You’re looking at roughly £4,000 annual profit after all expenses. But sell it for £102,000 in cash, and you’ve just banked 25 years of rental profit in a single transaction. 85% market value’s sounding like a pretty great deal to me.

Got a few houses left? You could be selling them all. Convert that to rent: that’s 40 years worth of rent in one go. We’re in our 50’s. And long may our lives continue, but busting a gut in a stress-mentality until I’m 70? No thank you. Getting 40 years worth of rent in just 28 days? Where do I sign?

Because that’s what we’re able to achieve at Landlord Sales Agency. Most of our properties sell in less than 28 days, and at the moment with first-time buyers and funds snapping up properties to counteract a growing population, some of our houses are getting offers within the hour.

So if you think: those landlords selling must be desperate, think again. They know exactly what they’re doing. They’re getting out of spending the next 20 years until they’re 70 getting pennies in bottleneck amounts in a market that’s becoming increasingly unstable. They’re laughing.

So with the changes coming into effect, I know exactly what I’ll be doing.

You’ve got less and less time to decide. And if I were you, I’d be deciding today.

It’s time to sell.

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