What You Should Know Before YOU Become A Landlord…
“I want in”, he says, with a smile stretching from ear-to-ear, so smug that I almost want throw my pot of yogurt over his face. You know, just because.
A friend of mine has managed to stack together a little too much cash under his withered mattress- and now he wants to taste the sweet nectar of landlord living.
But the truth is, being a landlord is one of those professions that mostly looks glamorous from the outside… and exponentially hideous from the inside (I know what you’re thinking, I just described a vagina), and that’s precisely what I told him.
Once you’re in the game, the anticlimax will rapidly hit you square on the jaw like a tonne of used tampons. It’s like, finally hooking up with that one person you’ve been pining over for years (the one that never gave you the time of day), only for the sex to be bitterly disappointing. Nothing fit quite right and you noticed soul-destroying blemishes in places you fantasized being flawless.
Welcome back to planet earth.
Take it from an average landlord that’s been scratching around in the game for several years, being a landlord is actually a lot of hard work and it can be extremely exasperating, even for an energetic playboy such as myself. Not consistently hard, but periodically. But those periods are some of the worst I’ve experienced in a professional capacity, and believe me when I say they come around far too quickly and they’ve often been left feeling suicidal. The money definitely doesn’t come easy, and there are easier ways of making a lucrative living that’s attached with far less stress.
I got suckered into the game, probably after watching one too many episodes of Sarah Beeny’s Property Ladder. If you remember the programme, you’ll recollect how excruciatingly painful it was watching the world’s biggest idiots making a killing from their restoration projects. To me, that made property seem like a viable option.
Sure, if those idiots can do it, why can’t I? But I didn’t have the time or testosterone to develop, so buying properties in ready-to-let condition seemed like the natural entry point.
In hindsight, I was completely out of my depth while I was sitting back with my hands down my pants, admiring Beeny and the soaring profits being made by novice developers, because I completely fell idle to the fact that Property Ladder was mostly shot during a massively booming market. Ironically, most of the wannabe’ developers could have purchased the properties, sat on their arses getting blitzed out of their tits on crystal meth for several months and still walked away with healthy margins.
But at the time, it looked fabulously easy. And there lays the problem, being a landlord just looks too damn easy. How difficult is to put down a deposit and then get a conveyor belt of 9-to-5 sweatshop monkeys paying off the mortgage over the course of 20 odd years? We’re really onto something here. Rinse and repeat. Easy.
However, from my experience, the following hold true…
The industry is polluted with degenerate assholes
I’m not just talking about letting agents here, although they seem like the obvious target. We all know what they’re capable of- everything you’ve heard about them is true. They’re mostly a bunch of unscrupulous tossors that create imaginative ways of swindling money out of landlords and tenants (those of you agents that read my blog are OK though, I swear! You guys are slick!).
But agents can’t take the entire blame (only the majority) for the state of the industry, otherwise eradicating them from our cycle would make it the perfect profession.
The bigger picture is somewhat more terrifying, and that’s because every level has an asshole waiting to suck the life out of you. Literally, every level, from the bottom all the way to the glitzy top, whether that be cowboy tradesmen, out-of-touch asshole politicians introducing ridiculous laws on a whim or tenants that feed off ruining the lives of innocent landlords knowing full well they can get away with it, thanks to those… ridiculous laws.
A good example is the tenancy deposit scheme, because it comes attached with bullshit laws/penalties that unconscionable tenants take advantage of. Many dip-shit tenants needlessly prosecute/threaten decent landlords to make an extra buck just because their deposit wasn’t protected. It’s shameless. The landlord SHOULD have protected the deposit, yes, but prosecuting for the sake of profiting even though they’ve been a good landlord is an asshole move.
The industry is just contaminated and it’s extremely difficult to entirely avoid collision.
Why is this different to any other industry? In principle, it’s not, but ploughing money into property is probably one of the biggest investments you’ll ever make, so it’s considerably more painful when someone tries to fuck with that.
It’s NOT a get rich quick scheme
The average landlord won’t get rich from being a landlord, they’ll most likely secure a cosy pension and make a comfortable living by the end of the cycle if they’ve been relatively successful. But even reaching that stage is a slow grind. Very slow.
People seem to have this warped perception of how it all works. Let me assure you, it’s rarely a case of dabbling in the market for a few years and cashing out with a couple of million and a dangerously attractive gold-digging stripper g/f that’s jam packed with syphilis (basic rule, the more STD’s they have, the hotter they are). That’s definitely my plan, but I wouldn’t count on it if I were you.
The average rental return typically isn’t that great, you’ll be lucky to achieve a 7% yield, so you’re not really making any real money for the first decade. You may even buy and sell at the right time, but that definitely won’t happen overnight.
Research is boring, but essential
I hate researching. Always have, always will. If you’re relatively normal/cool, you feel the same as I do.
Off the top of my head, I can’t think of anything that can knock it off the top spot for being the most tedious shit on the planet. I really don’t have the patience for it. Much like Golf. Don’t even get me started.
But as much as I despise it, I know some times research is simply not optional.
Unfortunately, far too many douchebags jump into this industry penis first without doing any of the essential groundwork, which of course, is totally psychotic, no matter how much you hate the idea of cracking open a book and soaking up knowledge.
Every day I hear at least one landlord say, “I didn’t have a clue about the tenancy deposit scheme, and now my tenant wants to sue me. What can I do?”
That only tells me one thing. That landlord refrained from getting off their fat, crusty ass to do even the most basic of research before spending tens of thousands of pounds.
If you can’t even be bothered to do your own independent research to support your investment, then you’re a loaded weapon. You’ll most likely be a liability to yourself and your tenants.
You’ll need to do a pile of research before spending a penny, and then continue to keep your ear to the ground because new nonsensical laws are regularly being introduced.
It’s NOT passive income!
“You’re making money in your sleep”, they say.
Yeah, I’m really not. Being a landlord really isn’t that passive, despite popular belief.
When you’re dealing with bastard tenants in arrears, spending late nights cleaning thick, congealed shit off the kitchen units with a toothbrush and spending long weekends painting and decorating in-between tenancies, you then realise how actively you’re working for every penny, which goes against the very nature of passive income.
I don’t have products flying off the shelves while I’m sleeping. I have adult-shaped children living in my property that need maintaining and servicing all year round. Being a landlord is a 24/7 gig and your services could be required at any moment.
Tenants WILL regularly want repairs that will require your attention, and they’ll often ruin your day with bullshit minuscule maintenance issues like a loose door handle. They COULD remedy the issue themselves with in minutes, but they won’t. They would rather play Satan and torture the landlord because that’s just easier for them.
Unfortunately, the more properties you buy, the less passive it becomes (up to a certain point).
One of the reasons that BTL isn’t a get rich scheme is because it’s like every other business- there are continuous outgoings, many of which are unexpected. Being a landlord is literally a money-pitt; it’s often expensive as hell, and forecasting costs is incredibly difficult, so you can’t even prepare for it. You will continually have to throw money at problems, mainly repairs and maintenance issues.
I was recently browsing through a landlord forum, where I read a thread by an aspiring dip-shit landlord that was the epitome of ill-prepared. She was forecasting the figures for her prospective investment. I honestly couldn’t tell if she was asking for opinions or just gloating.
The figures she provided looked amazing, but her projections were horrendously flawed. The only expense she accounted for was her mortgage payments. She didn’t take into consideration the cost for complying with legal requirements, insurance, tenant acquisition, maintenance, tax, marketing, and the shit load of other expenses that come with being a landlord. Unfortunately, she posted her comment in a rather hostile environment, so she soon got yanked back down to earth by the scruff of her neck. Poor girl. Stupid as hell, but still a sad way to go.
If my outgoings were limited to my mortgage payments, rest assured, I’d only be blogging selfies next to my Lambo with my middle fingers grinding against the camera lens. Alas, a landlord that is only restrained by mortgage repayments is either lying through their teeth or unbelievably reckless at their job. An asshole, either way.
It’s a business that requires continuous investment and rightly so, because you’re dealing with tenants that expect a service.
I can’t say I’m familiar with many sector specific laws, but I’m going to go out on a limb and say that landlord law is probably the dumbest shit out of them all.
To sum up the state of the system: good landlords with bad tenants don’t stand a chance. They really don’t, they’re cannon fodder. We’re basically paralyzed from exercising any resistance when tenants screw us over.
To put it into perspective (most of you will already know this), a tenant in arrears cannot be served a valid eviction notice until they are 2 months in arrears. Once an eviction notice is served and then ignored by the tenant, the landlord will have to sit back and anxiously wait for a court hearing. The hearing could take up to several months depending on how busy the courts are (they’re usually filled to the brim). In the mean time, the tenant is kicking-back rent free for the entire duration.
The landlord cannot even attempt to enter the property because that could be deemed as harassment, as would sending aggressive text messages (which is something we would all, of course, naturally want to do e.g. “get the hell out of my property, you freeloading, dippy bastard, or I’ll put your head into a meat grinder and feed you to the crows”).
The reality is, you’ll have the urge to smash the door down with a sledgehammer, threaten to burn the living shit out of your tenant with a blow torch unless he/she moves out immediately, and then change the locks. Unfortunately, unless you want to get severely prosecuted, that fantasy will forever remain in the spank-bank.
That’s just one example. The sad reality of how long landlords have to wait for justice to prevail makes me want to puke my guts out. To make matters worse, tenants falling into rent arrears and dragging their heals is incredibly common, so this happens on a daily basis.
The collective group of assholes that designed and approved such injustice deserves the Ray Rice treatment. Did you all read about that? Oh man, that shit was messed up. Ray is a professional American football player who punched his fiancée square in the face, knocking her out cold while they were in a lift. It was all caught on camera. He then dragged her lifeless corpse out of the lift and… actually I don’t know what happened next. I guess she woke up and went home. But punching these assholes in the face by a team of professional American footballers seems appropriate, innit?
Something will go wrong
There’s no such thing as smooth sailing around here. Sooner or later you’re going to get screwed over and you’re going to feel like your world is falling apart. You’ll then probably question whether or not it’s all worth it.
The culprit could be a broken boiler that’s going to set you back a few thousand pounds (which you really can’t afford) or perhaps a shyster letting agent that deceivingly milked you for every penny, or most frighteningly, a tenant that doesn’t want to play ball.
You won’t know what to do, you’ll frantically research online and read similar horror stories on various forums, and then you’ll feel worse, shrivel into a ball and worry yourself to sleep. Unfortunately, most problems end up hitting you where it hurts most: your pocket. It’s generally quite a painful experience, like getting drop-kicked in the nuts.
On a sidenote, researching online is a double edged sword. It can make you wiser and feel more empowered, but it will often unnecessarily scare the shit out of you. I stopped diagnosing medical concerns online years ago, because everything pretty much lead back to cancer or an incurable STD that would see the demise of my penis.
The primary problem with being a landlord is that you’re ALWAYS relying on other people not to be idiots, and that makes you extremely vulnerable, because people are generally idiots. But essentially, no one is going to value your possessions as much as you do.
It’s ALL on you
It doesn’t matter whether you use a letting agent or your mum to run your affairs, because if anything remotely inconvenient occurs, the responsibility will ALWAYS navigate its way back to its rightful owner. The burden is permanently fastened to your ass like a cluster of hemorrhoids.
I don’t know if it’s down to genius marketing, deception or just pure stupidity (perhaps a combination of all three), but many landlords think they can pass their responsibilities onto a letting agent and void all accountability. Unfortunately, that’s not going to happen, not even if that’s how the agent packaged and sold the deal.
A letting agent is NOT going to stay awake at night chewing their nails off, worrying about your tenant’s spiralling rent arrears issue. It would be nice if they did just to prove they’re not entirely soulless, but they won’t. They’ll probably just rub their greasy mitts together and use it as an opportunity to up-sell their eviction services. You’re the one that’s going to worry and pay through your nose to get the situation repaired, no one else.
Similarly, if you fail to meet your landlord legal requirements, who do you think is going to get persecuted? Your agent? That would be super cute. But no. You.
Booms and busts
The natural cycle of every economy experiences growth and contraction. Booms and busts.
That means your property could be worth 100k today and 70k by the time you get woken up by your morning wood poking you in the eye. That could also mean negative equity for you, and once you’re wedged into that hell hole it’s often tough getting out alive unless you have disposable income, which leads back to throwing money at the problem.
The last bust in the UK occurred in 2007, but since then the market has recovered. However, some experts are anticipating another one closing in soon. So what does that mean for landlords? It means you can’t always start/stop playing the game when you choose- some times you either get aggressively thrown out by the teeth or you ride it out until the coast is clear.
Is becoming a landlord even worth it?
Yes. One hundred percent.
Play by the rules, be sensible, and you’ll make it through with good fortune.