16 Dec Andy shares his insider tips with Private Sector Landlord magazine
Grab a coffee (or a brew) and compare landlord notes with our very own in-house landlord, Andy…
We were delighted to be asked by Private Sector Landlord magazine for an interview about how to be a successful landlord. At Letgate, we are proud of the fact that we have such extensive experience as private sector landlords. It helps us to continually develop a solution that meets the exact needs of independent landlords. We are also excited to share some of our insider tips (aside from where Letgate can help) on how to be a great landlord!
An online copy of Private Sector Landlord and “The Secret of My Success” can be found at: http://www.privatesectorlandlord.co.uk/magazines/mag2/mag2.php#page/5
Andy has been a landlord for 10 years, originally in Leicester and then in Leeds. Along with his business partner Adrian, he owns three HMOs in Leeds, which are let to 15 tenants. He has always self-managed his properties, feeling it is more rewarding and cost effective. Both Andy and Adrian have ‘day jobs’ running the IT business behind their business, Letgate. The company offers software which makes it much easier to self-manage properties.
What made you become a landlord / work in the lettings field?
I started off by letting my own home in Leicester when I went away for a few months. When I returned, my job involved moving around a lot so it made sense to rent and continue to let my own property out. I finally settled in Leeds, started an IT Consultancy with my business partner and sold the house in Leicester and bought one in Leeds. It needed a lot of renovation but once complete, the uplift in value meant that we could move onto another property.
How long have you worked for Letgate?
I have been at A2W solutions since 2009. The Letgate product has been a few years in the pipeline. Last year, we started to redesign it and wound up redeveloping it from scratch!
What geographical area do you cover?
Letgate can be presently used by Landlords with property anywhere in England. Legal differences in Scotland and Wales mean it cannot be used there.
What did you do before becoming a landlord?
Nothing very exciting; I worked as a management consultant in IT and Telecoms.
From the experience you have gained, do you have any advice for property investors looking to embark on becoming a landlord today?
Be organised and use technology to your benefit. Stay on top of legislation and make sure your property is compliant. Regulations change all the time so it is vital to keep up to date.
Make sure you have plenty of warning when things like gas safety certificates are up for renewal. Scan and keep copies of all your documents – it makes them much easier to find when you need them.
Is there any type of tenure you would not recommend and why?
All of our properties are HMOs and we let to young professionals, as our houses aren’t in student areas. HMO letting delivers higher yields but also involves more hassle and expense. The downsides are the difficulty in getting a mortgage from a limited number of providers, and the additional management work it entails.
What are the major challenges of being a landlord?
Staying on top of legislation can be difficult and time consuming, particularly as regulations regarding things like licenses vary from council to council. Joining a landlord association makes a lot of sense. One of our recurring challenges is obtaining mortgages. For HMOs, the number of lenders on the market is very limited. Because of this, the offers are not very competitive and tend to have high fees or very odd conditions attached.
What is the most satisfying aspect of being a landlord?
We self-manage our properties and the positive feedback we get from our tenants is very rewarding. It’s easy enough to advertise and fill HMO rooms using sites like Spare Room and the Letgate software makes it easy to manage the administration. It is also very satisfying to know that the properties you are offering for rent are the result of your own graft.
We hear a lot from politicians about how we need more regulation in the sector. Do you agree?
This is a tough one. On one hand I would like to see more pressure on landlords who offer a poor service, but some of the pressure lifted off those landlords who offer a good service. I think a more transparent regime of regulation would help. Presently there are too many grey areas. I also think some licensing can be an unnecessary cost, which diverts investment away from the property.
Are you in this for the long term and if so will you grow your portfolio?
Property is a long-term business for us – hence the investment in Letgate to run alongside the HMOs. Our portfolio will grow, although we aren’t in any rush to take over Leeds.
What are your main tips for financing your purchase?
Work with a good independent mortgage advisor. There are so many small differences between products; make sure you understand them before you go ahead and pay for a valuation. We have been using the same broker for 8 years now and it has worked well for us so far.
What are the three main tips to ensure success as a landlord?
Include the bills with your HMOs; it’s much easier to manage when people move in and out. Reference all your Tenants thoroughly. Don’t just look at the credit check. Be organised from the outset. Know what you need to do before any renovations commence or else you face bringing back contractors after works have been carried out. Use a tool like Letgate to take the pain out of organisation and management.
What has been your biggest mistake?
Taking a verbal reference, not keeping written transcripts of conversations and not including an appropriate break clause in the contract. We had problems with a tenant a few years back (an unpredictable alcoholic who picked fights with the other tenants) and found we were unable to evict until the contract was up. Since that incident, we have properly referenced tenants and made sure we use professionally prepared (and up to date) contracts with appropriate break clauses. Nobody ever wants to have to evict a tenant but sometimes you have to and it’s much easier if you’ve got the contract right.
Adeela Ahmed, Private Sector Landlord, December 2016
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