I've been meaning to write this blog for a while! I accept there's an element of us needing to wait 20 years to get a definitive answer, by which time hopefully we'll all be OK! But I've been investing myself for 10 years, and I've been a lettings agent for 7 years, so I'd like to think that I've seen enough to offer an opinion. In that time, I've seen loads of landlords buy loads of different properties. Some (in my view) have bought well. Others have bought less well (or to be precise been "sold something"). I've invested myself and have certainly bought things towards the start that I now regret - being within the industry has changed my perspective on what constitutes a good purchase! So what type of landlord seems to do well?
Those who don't overpay.
Property is an investment, so if you overpay at the start, you're forever playing catch up in terms of trying to make that investment work. Some buyers are happy to pay the market rate for a genuinely nice property. Others seek dilapidated properties at reduced prices and generally get good deals even though works are required. Either is fine, but what you want to avoid is paying good money for a property that's actually pretty average - and that's 80% of the market!
Those with a business mentality.
What I'm saying here is that those who become a landlord accidentally struggle to make it work for them. If the house you're renting out was once 'home', there's always going to be an opportunity to feel 'the lawn wasn't like that when I lived there' or 'there are some scratches on that wall I took ages painting'. If you rent out a place you've never lived in, anything the tenant does isn't as personal.
Those who keep the property up to standard.
It's important that any property kept up to date. If you spend nothing on it, over a few years it will become dilapidated which affects the value of your investment. Equally if you don't repair things quickly, decent tenants will get fed up of you and leave. Your property will churn more frequently and your tenant quality will drop too. You're now in a downward spiral which will cost you far more in the long run than keeping your property in good repair.
Those who don't fiddle.
Good tenants want the 'peaceful enjoyment' of their property and invariably get frustrated by landlords who are overly attentive. We manage one property where I know the landlady (who's a really well meaning lady) has lost 3 tenants in the last few years because they feel like they are being 'supervised' - a property inspection on a 2 bed flat does not take 30 minutes and involve quizzing the tenants on their personal sleeping arrangements(!)
Those who don't get greedy.
Those who don't overpay.
Property is an investment, so if you overpay at the start, you're forever playing catch up in terms of trying to make that investment work. Some buyers are happy to pay the market rate for a genuinely nice property. Others seek dilapidated properties at reduced prices and generally get good deals even though works are required. Either is fine, but what you want to avoid is paying good money for a property that's actually pretty average - and that's 80% of the market!
Those with a business mentality.
What I'm saying here is that those who become a landlord accidentally struggle to make it work for them. If the house you're renting out was once 'home', there's always going to be an opportunity to feel 'the lawn wasn't like that when I lived there' or 'there are some scratches on that wall I took ages painting'. If you rent out a place you've never lived in, anything the tenant does isn't as personal.
Those who keep the property up to standard.
It's important that any property kept up to date. If you spend nothing on it, over a few years it will become dilapidated which affects the value of your investment. Equally if you don't repair things quickly, decent tenants will get fed up of you and leave. Your property will churn more frequently and your tenant quality will drop too. You're now in a downward spiral which will cost you far more in the long run than keeping your property in good repair.
Those who don't fiddle.
Good tenants want the 'peaceful enjoyment' of their property and invariably get frustrated by landlords who are overly attentive. We manage one property where I know the landlady (who's a really well meaning lady) has lost 3 tenants in the last few years because they feel like they are being 'supervised' - a property inspection on a 2 bed flat does not take 30 minutes and involve quizzing the tenants on their personal sleeping arrangements(!)
Those who don't get greedy.
You would be surprised how many landlords are OBSESSED with the amount of rent they are receiving. You can legally raise a rent every 12 months and this is the only date some landlords diary - irrespective of whether the rental market or the state of the property justifies an increase - every year they force through a rental increase even if it's just a fiver. When you have a good tenant who looks after the property and is paying a decent rent anyway, this is a complete false economy as all it does is antagonise the tenant. It's the same with landlords who have got £x for a property previously and will dig their heels in until they get £x again - they fail to understand that you maximise your income by killing void periods and the costs associated with a change of tenant. Conversely landlords whose end of year figures look the best are those who've set a sensible rent to start off with, and once they have a decent tenant don't rock the boat.
