Pain and Pleasure
Anybody who thought I was about to confess about my S & M alter ego will be sadly disappointed! That’s between me and the dungeon master!
I’m referring instead to a week of landlording where I’ve faced the highs and the lows of the business.
I love finding new property development opportunities
The adrenaline of discovering a clear cut investment opportunity. This week I’ve found two. The first I happened to just be driving passed. It is used as an office but on the market because the company has gone into receivership. The property arranged as separate offices could be easily configured as an HMO (House in Multiple Occupation) with 5 bedrooms. On initial estimates the property has a gross rental yield of 10%+ and there is a longer term development angle giving me the prospect of a capital uplift of 100%. I’m just checking out the financing options with my BTL mortgage broker.
The other opportunity is a maisonette marketed for less than 70k with potential for over an 8% gross yield. Importantly when I did a brief property investment analysis I would achieve over 12% annual return on the equity (25% purchase price). That beats the less than 3% it makes being stuck in the building society. Interesting! I’ve mentioned before about the importance of doing your figures to make sure they stack up.
The other fortuitous news was that I’ve been spared having to re-let one of my properties. The good news came in a phone call from the tenant letting me know that their new job has fallen through and hence their re-think. Thanks anyway for all those landlords who emailed me their tactics on winning the lettings phoney war.
This change of heart has saved me the hassle of having to organise contractors such as the decorator, oven cleaner and also the headache of negotiating with the tenant over the deposit. Great news and I’m also thankful that I wasn’t too proactive in organising the refurbishment work and the marketing.
The pain this week was when I found out from a tenant of one of my garages that the next door bungalow formerly owned by me has been sold…….for 40 grand more than I sold it for 5 years ago. Ouch!
My recent experience has shown that despite the property doomsayers and economic slump I would have been far better off keeping the properties I have sold in the better areas over the last 10 years rather than ‘banking the profits’ . I confess this hurts!
The other pain is water. It gets everywhere and sometimes places it shouldn’t. This is generally I understand what’s called a leak. One house I’ve got has had damp patches appearing in the ceiling over the last couple years. Despite numerous attempts by roofer Jim, they keep coming back. I know the only permanent solution is to get the terraced house re-roofed but that’s 4 grand worth of work. Don’t you wish sometimes you could just wave a magic wand and make these annoying problems disappear.
The other pain was when I was talking to one of my tenants, Masten. “oh yeah there is one other thing”.…….. “I think there a leak from the bath”. “It’s not bad it just drips a little through the ceiling……I guess it needs looking at before the winter”
Aaaaaaaghhh! Yes I do think it needs looking at and prefereably before the whole bloomin ceiling falls in!
The ‘game’ of landlording is a metaphor for life. You win some …you lose some, but if things get tough. Try whistling a little tune and think of all those poor buggers having to work for a living. It helps!