New EICR to cover any changes made by outgoing tenant?10:00 AM, 4th May 2021
About 2 weeks ago 95
Just two years after buying my first intentional property investment I owned 9 more. Buying that first one was like finding a magic lantern for my buy to let mortgage business. The Genie that popped out to grant me my wish gave me the confidence I needed to share with other prospective landlords how I got into the business and how I had overcome my nagging doubts. I was still relatively wet behind the ears but I knew more than most, especially the newbies who were starting to get interested in this new “buy to let” phenomenon. You see, when I purchased my little flat nobody had heard of the phrase “buy to let” as it hadn’t been invented. When ARLA created that phrase in late 1996 the media really grasped onto it and buy to let was in pretty much every newspaper every day.
ARLA invented the phrase and created the publicity to help find their member letting agents more business but very few of them knew much about arranging mortgages, let alone selling them. I was in my element, the internet was still very much in it’s infancy so the only way people could find things out was to go to letting agents or a Landlords Association. I presented at most of them and before long I couldn’t cope with the amount of business that letting agents were referring to me. To cut a long story short, I arranged 500 mortgages in that two years and was grossing £20,000 a month in fees and commissions. The banks were shedding staff and I found it really easy to sell them a franchise of my business model. I managed to enjoy nice holidays, buy decent cars and still save enough to fund the deposits to buy another property every two or three months.
Cream carpets look great when you put them in but two years later when tenants move out that’s another story. I experimented with cream and a fleck and they were a bit better. Then I made the mistake of trying other colours. I’d moved on from flats, I could now afford to buy bigger, better, new build properties to diversify my portfolio. Everybody seemed to be buying flats and I remember thinking to myself, when these people have children they are going to want to rent houses.
In the first 4 bed house I purchased I went for green carpets. That’s a neutral colour I thought (well it is isn’t it?). The house was a new build and I’d found my perfect tenants before it had completed. I allowed myself 3 weeks between completion to allow me time to get the gardens laid, blinds installed, lights fitted, put in a garden shed etc. before I signed contracts with my new tenants. These were the first tenants I’d self sourced via an advert in the newspaper. They came around just after the carpets were fitted and were horrified they were greeen, they clashed with their red sofa. I’d have to change them or else the deal was off. If only I’d gone with cream I wished. There was no way I was going to change the carpets but I did ask what colours would have been preferable. Cream or gold they said. I hadn’t thought about gold before but it made sense, what colour doesn’t go with gold?
I knew it wouldn’t be difficult to find a new tenant, I’d received lots of calls in response to my first advert. I was right, another advert on Thursday and I had my first block viewing arranged on the Saturday. I scheduled for people to arrive at 15 minute intervals but nobody was punctual. It was organised chaos and I learned something really useful from that. Bulk viewings create demand, even for green carpeted properties.
Go for gold or cappuccino. Carpets will get dirty and accidents such as wine spills will happen. Next time you look at carpets go for felt backed bleach cleanable polypropylene, it’s the perfect carpet for buy to let property. It’s not expensive, it’s very hard wearing, it looks good and you can literally bleach clean stains out without leaving white patches. Most good carpet retailers sell it these days.
Despite having spent two years networking with landlords, arranging 500 mortgages and talking to letting agents I’d still not heard of inventories and it hadn’t dawned on me that I needed to check anything other than a persons ability to pay the rent. I always asked to see payslips or accounts and bank statements and I’d got a decent tenancy agreement from my local landlords association – what could go wrong?
I let that 4 bed house to four IT contractors who were working in the area for 12 months. I got them to sign a 12 month tenancy agreement too, wasn’t I clever? Four months later the rents stopped coming in so I popped in to see them on the way home from work. Nobody answered the door which I thought was a bit weird as it was 8pm. I peered through the windows and to my horror the walls in the living room had been painted purple, there was no sign of any furniture and I’d had no rent. I knocked on the neighbours door and the lady who answered explained they had moved out a few weeks ago after they’d lost their contract. I’d not copied the payslips nor the bank statements so the only details I had was their names on the tenancy agreements. I’d not seen any ID so they could have given me anybodies bank statements too. I went the Landlords Association meeting that I’d decided to skip that night as I needed a G&T now. I only needed a Tweed suit and I’d have completely fit in! There I was, drinking G&T and whining about tenants.
How stupid had I been? I owned 10 properties, I’d become a buy to let guru, arranged 500 mortgages and yet I knew diddley squat about property management. I’d learned my lesson though and it could have been a lot worse. Even if I’d have tracked them down I’d never have been able to prove that the walls were not purple when they moved in. Yes it was a new-build magnolia box but how could I prove they had painted it and not me? Maybe I should have stuck to paying the letting agents fees?
In part 4 of this story I will share with you the lettings check list I created as a result of this experience. I’ll also share with you my first proper tenant from hell story. The same house and the very next tenant would you believe?
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Part two – Tips on becoming a buy to let property investor
YOU ARE HERE >>> Part three – Lessons learned whilst building my buy to let portfolio
Part four – My first property management checklist
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
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