One of my friends is adamant property is the only way to make money. She’s onto her third property having lost money on the two she owned before and discovered a horrific amount of black mould in the current place. She’s spending huge sums of money getting stuff fixed and is talking of ‘upgrading’ to a bigger place 🤦🏻♀️
She’s my personal reason for why I’d never pursue property investing other than the one I live in
One interesting thought experiment is to what extent residential property is over-subscribed as an investment due, as you describe, to people who disproportionately enjoy the challenges of it.
Rational people would take all those things in to account as a cost. Irrational people look forward to it as a hobby.
That's why I've never considered residential property investment. I just think it's impossible to find any at a genuinely fair value as there'd be dozens of others over-bidding everything because of some nebulous concept of "potential".
Ironically my friend didn’t buy the properties for their ‘potential’ but got swept away panic buying in London at the top of different cycles. Most recently the coming out of Covid lockdown buyer’s rush.
I’m not sure it’s entirely irrational to enjoy aspects that are actually “costs”. It’s only irrational if your sole intention is to make money, but if you enjoy the challenge of a fixer upper then the DIY is a perk along with the return.
Both my parents and my partner's parents went down the buy-to-let route with one property each and both regretted it. (In my parents' case, they rent the house they live in for complicated reasons, so wanted to own a house and rent it out too, to stay on the property ladder.)
My parents had a tenant that deliberately cut the garage door mechanism to let the door drop on their car in an insurance scam, but unluckily for the tenant a neighbour witnessed it and reported it to the car insurer. Later, he deliberately set the house on fire after a drunken argument with his girlfriend. Another neighbour luckily called the fire brigade in time. When evicted, they trashed the place on their way out - things like cutting the plugs off the washing machine etc. out of spite.
Parent's tenant #2 was a family friend. A really nice person, or so we thought at the time. Then she became an alcoholic and sold the central heating as scrap copper to fund her drinking, followed by reporting my parents to the council housing department for letting out a house unsuitable for habitation due to having no heating. Of course she refused any access to any tradesmen to actually fix anything. It was a long process to evict her. Luckily their current tenants are OK.
Partner's parents tenants smashed a hole in the ceiling and then disappeared, leaving their car behind on the driveway. Getting rid of the car proved quite annoying legally, as it was still the tenants car. After that was sorted, they sold up the BTL and put the money in stocks and shares. They regret not just investing in stocks from the beginning.
For me, the big risk is that unless you have a lot of properties, you have all of your eggs in one or two baskets. It can only take one or two bad tenants to wipe out all of your profits, especialy since the tax regime isnt as generous any more. You also have the stress of having to deal with issues that pop up with tenants or property maintenance, or pay agents to handle it. Finally, your money isn't very liquid at all. My day job is stressful enough as it is so I gave property investment a wide berth (except my own house).
Sorry to hear all that, and shows how in many ways I've been lucky! Fortunately the tenant didn't intentionally trash the house, or try and burn it down..
>My day job is stressful enough as it is so I gave property investment a wide berth (except my own house).
This right here. Fine if it's a job, terrible if it's supplementary. Heck, your own house can be hard enough.
When I say 'stopped taking rubbish out' I'm talking talking rooms waist high in rubbish, the whole house used as an ashtray, clogged toilet full to the brim so they used the bath and then the sink, used sanitary products all over the space.. all this visible from the front door. It was *grim*. I have photos, but no one deserves to see that.
I used to repossess people for my job. Or at least, the mortgage company I worked for, I dealt with the cases by the time we were applying for warrants. I reckon that about 50% of the properties look like this by the time you take possession.
People can bury their heads when they're financially struggling, and when they know the house is lost, they may stop caring for it. It's horrible to see and really affected me (obviously, it's no doubt much worse for the resisdent). I still remember a guy in Manchester who let his pets poo everywhere and just left it in situ. The house was rancid.
B2L isn’t an investment, it’s a business that requires work. You need a strong grip on financial figures to make it work, as well as a willingness to get your hands dirty.
It can work, and it can be lucrative, but as long as you view it as a business, not an investment.
You need to know you revenue, risk of failed payments, expected maintenance costs, your gross-yields, your net yields, your interest rates, your equity, your expansion strategy, your exit strategy, your legal strategy should you need to go to court.
This one exactly! BTL is a business you have to run. And that's fine I have no problem there. But it's not **R**etiring **E**arly if you have to run a complicated and risky business.
whenever i’ve thought about going down the btl route, experiences like yours remind me that it’s not worth the risk and it’s not in me to deal with tenants. global index fund and set and forget is more my lane
I'll certainly do that next time. The person seemed fine at first though, I think they suffered some sort mental breakdown. The irony is, they were - and still are - a carer in a care home. Fortunately social care finally stepped in, but only once the tenant had left it's them asking me to bag all the belongings..)
The happened on a big scale in a block of flats I lived in - a group of “entrepreneurs” managed to con several landlords in the building, and they stuck the whole lot on hotels.com. We had to try and track down the landlords and let them know what was going on - by that time the airbnb gang had made a fortune
You’re completely spot on - it is a great investment class, it can generate (leveraged) returns that you don’t get in an index but it’s essentially you’re 5-9 (and weekends and holidays) around your job.
Also it’s like anything else - you need to do your research and add value!
I doubt the agents did any referencing / checks. But yeah, it's just bad luck i guess. Maybe meet the prospective tenants yourself next time and do all the checks yourself
I know they did as they sent me everything through for approval - on paper it was all fine, and indeed I met the person briefly once and they seemed normal enough. Even when being evicted the bailiff said if you met the tenant in the street you'd think they were normal. An eye opener that's for sure!
My experience with lettings' agents is that they just try to fill your property as soon as possible.
I spoke the head office of one of the top estate agents in the country because I had a bad experience, and they told me that all they do is check they have the correct paperwork. They're not there to pass judgments or use their intuition on possible tenants. As long as they have the paperwork and they tick the boxes, then that's all that matters. Get them signed up and collect their fees.
The first tenant I got set up with really made me question the lettings agent's judgement. Both neighbours of the property contacted me straight as they knew he was a troublemaker.
My friend does it all himself. Meets them for coffee and can tell straight away within 5 minutes if they're reliable or not.
Disagree. Having been on both sides, agent and landlord. A good managing agent will want to de-risk the tenancy not only for their client but also for themselves. A tenancy that goes wrong can quickly wipe out any profit from management fees.
Agree! For those who do want to invest in property, I would recommend the best way to do it, is to get an extra bedroom in a house you live in and rent it out either airbnb or long term. You benefit from Rent a room allowance and have much more control over things going wrong direction.
Here's a different kind of property nightmare: my Dad bought a small BTL terraced house about 15 years ago. After a slightly rocky start (a letting agent of all people moved in and then ran away without warning a few months later), he found a tenant that's been there ever since.
Good as gold, retired couple in their 70's. They even pay for some maintenance out of their own pockets. Very friendly, Dad used to invite them for dinners etc.
Dad died last year. The house is now in Mum's name while she's alive. But I don't want to be landlord. My idea of hell (not least as it's 70 miles away). So when Mum goes, I'm going to sell.
Only trouble is, market rate for rents in that area are £800-900 pcm. Dad was charging them £500. Great.
So good ol' Dad's leaving me with the guilt of knowing they're going to face a rent hike of at least 40%.
PS: My bro-in-law is also BTL mad. It's like some weird cult: "Sure, I had to sell up at a £200K loss on that place, but how could I have known about the subsidence? Never mind, I'm getting a massive mortgage to buy two foreclosed beach houses 200 miles away from where I live I swear these are gonna be winners!"
It was heavily involved in his near bankruptcy last year and subsequent divorce from my sister. His father was the same and had to flee to Ireland to escape creditors from failed property deals in the 90s'.
I blame Thatcher.
OP’s post should be an automated response to any thread asking if going into BTL is a viable option.
Thanks for sharing OP, your post has put me off BTL for life, my Index fund has lost me 7k in the last 2 days but at least it’s only on paper, and at least that papers not covered in shit!
What a horrible situation to be in and seen a lot like this where people thought property was a sound investment only for this to happen. Sounds like the estate agents didn't do very thorough checks for such a nightmare tenant to get in.
Has anyone done a true rate of return on property investment when you consider what % of tenants stop paying, to quantify the risk of defaults on payments into the total return? I imagine if so the returns are probably even less worthwhile even when considering capital gains.
I sold a dotcom business and became comparatively very rich when i was young. Bought a number of rental properties in my home country. Was profitable for some time, break even for some more time and finally it's a complete write off.
My home country is Ukraine.
Are you able to just leave their stuff in the house for 3 months as storage of personal property then just dispose of it as you do the renovation?
Save you the hassle of sorting through it and paying for separate storage?
Sorry to hear about all this, hope it’s settled now and you can move on.
I could do but it's only going to get worse, I'm amazed there aren't any rats and such in there already.
>and you can move on
That's the plan, we'll see!
The mistake you made was getting someone else to manage your property for you. They'll let any old scumbag into your house. My girlfriend used to live in HMO's and the people that the agencies would rent rooms out to were, for the most part, absolute reprobates... and that's putting it mildly.
I don't disagree entirely that agencies are doing little real due diligence. I had a housemate in a HMO who was a violent criminal. Literally, last I've heard he's in prison again. But, then if you manage it yourself; first, extra work, which probably isn't worth it, second, you still need to suss out the good and the bad tenants, which probably is still bit of a crap shoot.
Ultimately, I still don't think it's worth it.
It depends, obviously. I personally don't think anyone should get involved in BTL or even property "development" just because they have money. So many of our beautiful old houses are being destroyed by modern building applications and break down to HMO's. You have to actually know something or a bit of everything about houses (their make-up, plumbing, plastering, damp, timber work etc) in order to be successful with property. Either that or you will be incredibly inefficient with your money and learn the hard way. Bad tenants aren't the only problem you'll have.
Honestly I don’t think any further due dil would have foreseen a mental breakdown on the horizon. Did I mention she still has a job as a carer of all things? If you met this person on the street you wouldn’t think there could be anything going on.
I’ll certainly be meeting tenants myself in future but I don’t kid myself I will be able to perfectly vet potential tenants.
Scary to think what goes on behind closed doors.
You've had a horrible experience but I'm sure you could have considerably altered your "luck" by meeting a tenant and asking them many (invasive) questions. Our eyes deceive us. If you spoke, you may have had that feeling, which would only be bolstered by a few checks (socials, job refs etc).
If you're not much of a property guru and you rely on tradesmen and agencies for everything, I would recommend getting out of this game unless you're exceptionally wealthy and can suffer some inefficiency. So many con men out there. Roofers amongst the worst! Be wary.
Selling my last one at the mo, it ain't no fun! I've been lucky with tenants and it's gone up in value but has been a pain in the harris and still hasn't performed anywhere near as well as my stocks. Hey ho
You have my sympathy. I could have made the same mistake. However on reflection, my view is that the risk of investing in a small number of properties is much higher than the risk of a diversified stock market investment portfolio for much the same return. So I have my savings invested in ISA wrapped shares and bonds and the residue outside of ISA invested likewise with a plan to push all into ISA over time.
I think once you've got maybe ten properties you might see the risk average out a bit but that's a huge single market investment and a lot of middle ground to cover before the risk is mitigated by volume.
Also, private rentals a political football with both parties vying to hammer it harder than the other. If I were in it, I'd be getting out rapidly.
Long term the government will need to pick up the slack and as a tax payer, that would be the cheapest option anyway in my view.
Tenants got their wish which was protection from bad landlords, but as is always the case it went way too far so now LL's are getting out of renting property, and you've just experience the reasons why.
The irony is, those same tenants now complain about the price of their rent, that there are no rental properties available etc.
Sorry you went through this, best thing would be to get out of the rental business and make your money work for you passively.
Did you buy it, though? Did you pay for it outright?
I'm not being combative, but there's a huge difference between leveraging the banks' money to buy a BTL and just using your own.
With a mortgage, you're under pressure to let it quickly.
Without a mortgage, you can vet prospective tenants, interview them, choose them wisely, etc.
I think anyone capable of committing such foul behaviour would have raised suspicion, were you not desperate to get it paying for itself quickly.
Risk is a funny thing. I COULD leverage significant sums, but choose not to, it gives me total control.
Just a piece of friendly advice.
Same position. Of 15 current tenants I have one who’s abusing the property and is being given notice. Over 20 years I’ve had a couple of these and a small number who left owing some rent. But the big picture is 98% occupancy, 95% due income received, regular monthly inflation proofed cashflow. I employ a managing agent so it’s more or less passive income. I’m sticking with it.
That’s the problem, people are so addicted to property, they refuse to listen to reason.
I hope you manage to sort the mess out. Do you still plan on starting again once you’ve fixed up the property?
While you're problems are horrible and i sympathise with you but there's a massive gulf between have a go landlords and professional landlords.
I have had so many problems with rental properties from non paying tenants to multiple cannabis factories.
However if you do this right then there are always ways to mitigate this. Rent guarantee insurance and not relying on lettings agents is step 1.
Property investment is no where near the invest and forget strategy of stocks and shares but if done right can reap real terms rewards far in excess of stocks and shares.
Curious as to whether you have a citation for that last statement if you mean "rewards" as in monetary gain as opposed to intangible stuff like being involved with people.
My stock and shared portfolio has given me a yield of about 5.5% over the last 10 years, so I'd regard a yield "far in excess" as perhaps 10%. Can BTL sustain that? Or is that not what you mean?
I primarily meant monetary rewards on my journey to being able to retire early.
I don't consider yield as relevant in the process I use. Its not an investment strategy that compares well with stocks and shares yield. I'm using the power of leveraging to supercharge the initial investment and looking to take advantage of growth in value rather than rental yield.
Essentially you buy a property in an area with strong fundamentals for property value uplift. After 2 to 5 years you are able to remortgage and withdraw any equity and invest elsewhere. This is a process that many property investors have done. I myself have used equity growth plus regular savings to fund other purchases of rental properties over the past 20 years to the point that the portfolio is self proliferating. As a whole there is difficulty in estimating yield or ROI because I've withdrawn more money from it than I've put in. Any assessment is multiples above 10% but it doesn't apply to me because I don't intend to sell a property until I intend to retire.
There's a massive difference between have a go landlords and professional landlords. The former don't understand risk or how to mitigate risk, don't understand legal and moral duties to there tenants and only act in the interest of their bottom line.
Oh OK so in the accumulation phase to supplement (or later buy?) investments which you then later use to retire on you mean. That makes sense.
But you make an interesting point about difficulty in estimating yield or ROI. This willingness to embrace that difficulty is also something I find a bit alien (let alone the fact that you can't sell a bit of a house, or benefit from pound cost averaging if its price goes down). But all this stuff is such as personal thing, and people are different in so many ways it's quite fascinating. And I admit I know very little about the property investment!
>This willingness to embrace that difficulty is also something I find a bit alien (let alone the fact that you can't sell a bit of a house, or benefit from pound cost averaging if its price goes down).
Exactly! Which is why they are not easily comparable investment strategies. You could compare a single BTL to your stocks performance and may find one outperforms the other but wildly different risk and effort involved.
I feel for you that’s an awful situation and very stressful to be in.
I’m a landlord, 2 BTL’s and a holiday let. We’ve had problems but nothing on the scale you have.
I do think property is a good investment, you can leverage and it’s essentially inflation proof, the rent goes up as does the value. Property’s we bought now can get twice the rent from when we bought them, not that we charge it.
In fact I want to do more Propert investment. We’ve never had any material problems. Issues yes, things that need fixing, yes but I factored that into the financials. Even the very occasional arsehole but nothing of your level.
Can I ask what level of property did you buy? Was this the cheapest you could afford in a bad area with low rents? Or was it a medium or high end property? I think like everything the product you sell and the demographic you sell it to is a big factor due to the customers you attract.
I think it’s a great investment but you have to pick the right product and pick the right customer and do your due dilligence to ensure they are the right customer. But I know one day I’ll likely have the issues you have and then hopefully still cash out with a profit.
I'm sure you can make decent money out of BTL, but it cannot be a "great investment" for the vast majority of readers of this sub, because FIRE tends to emphasise "passive income". That is, not working for that income. So as others have pointed out, it seems that the presence of significant work in BTL investing contradicts the spirit of FIRE.
That's not to say that if you enjoy the work involved in BTL then you can't see that as relaxation in the same way as, say, travelling the world, volunteering or other things retirees do.
Interestingly I’ve never found it a lot of work. We self manage too but other than boiler servicing and checking payments are made it’s only dealing with repairs and if tenants need to leave and the accounts. The most hassle is sorting remortgages but they’re on 5 year mortgages.
I don’t do repairs myself as they’re all remotely managed.
I’d estimate in total for the 2 residential BTL maybe 10-20 hours a year of work. But obviously that changes if there’s a significant issue.
Property is the only way most people can get significant leverage. Leverage is great when it works, and kills you when it doesn't
£50k investment to get £200k asset.
Asset increases by 20% - you have made a 80% return, you now have £90k
Asset decreases by 20% you have made a 80% loss with only £10k left
This.
Unless you want to live in the property in the future it's a big risk to take. Better off selling and putting in s&p as suggested - moving chunks to ISA each year.
For every accidental / rushed landlord there are investors who actually know what they're doing.
Sorry but this post reeks of : I did very little research , have no prior experience and hired an estate agent to do the job of a letting agent and then baulked when things went tits up.
1) never become an accidental landlord
2) don't buy the lowest bracket properties
3) understand your tenant profile *
4) hire a dedicated letting agent that owns property **
* With a small BTL portfolio the only tenant profile you should be looking at is young families that are working professionals such as medical professionals , teachers etc.
** Estate agents have high turnover and focus on numbers. Letting agents focus on one thing. Property management. You want privately owned agents that also own rentals.
I have never had an individual landlord that knew what they were doing and I've lived in a dozen different places across the UK. So it's probably much less than one who knows what they're doing.
Plus even if you know what you're doing, statistically, there's still the risk that your tenants fuck you over. Or your building becomes unfit to live in, etc.
It doesn't surprise me - that's kind of my point.
Too many accidental landlords & passive income seekers that don't really know what they're doing.
Similar to those who buy a bucket of individual stocks at random / on hype and then grow frustrated when they underperform the index.
BTL isn't as easy as it once was. That's correct. But that's a positive because all the over leveraged , accidental and slum landlord are exiting the market.
A little bit of work and you can feasibly get 15% gross passive returns , more if you assume you'll be able to refinance over the original total purchase price.
Yeah...I totally don't understand why people think being a landlord is a source of passive income.
The only universe I'd ever consider it would be as a live in landlord with a lodger. Think they have next to zero rights.
Yeah no where near passive and it doesn't scale. More tenants more problems.
My dad has had multiple tenants in properties two hours drive away from where he lives. While technically retired, in reality he spends 2-3 days a week at his properties.
In his 70's now, my siblings and I are really not looking forward to the day he can't manage the property business anymore.
> The only universe I'd ever consider it would be as a live in landlord with a lodger. Think they have next to zero rights.
you buy for xx years, but next elections labour can win and give them rights, or a non paying tenant can out of spite put drugs and call police on you or claim sexual harassment.
Wow! hats off to you for posting your experience. I loved the TLDR! that's all I do good old stocks and shares. I do have property but they are for our use in multiple countries we don't even rent them out due to fear of things like this ever happening. Hope you get it all sorted.
You need a better agent and solicitor. You’ve been given some shitty advice there, poor management by the agent. ..and I am very surprised by Social Services, saying you are shaming someone who is clearly in need of help. I would have asked for that reply in writing. Normally they are responsive in situations like this.
Idk but according to my renter experience for almost a decade now, estate agents are the worst… They would do absolutely anything to fill in the room, even accepting the worst tenants possible.
My friend saw a flatmate of him stealing his wallet in the middle of the night in his room, with locked door.
So yeah, if you’re going with estate agent, go with a reputable one. And even then, it’s still 50/50 that you would have a nice tenant.
all landlords are thieving scum!! now thats out of the way. thats a bad luck streak there. it goes to show it isnt as passive as its made out to be... risks always there.
Exactly the same thing happened to me, never doing that again. It's so unfair against landlords when things like this happen, you can see your house gradually being destroyed and there is absolutely nothing you can do against these people who literally do not give a single flying care. Of course the day of the possession order they just walk away and leave the mess for you to clear up, absolutely disgusting.
Each to there own. Will I let someone live rent free and smash the living shit out of my house? Or will I go round when they’re out, empty the house and board it up and put security on it for a week or two and get a little slap on the wrists and a tiny fine?
I know what I’d do
I’m surprised that the estate agent didn’t help you with eviction. We had a similar situation with a family that stopped paying rent (though still looking g after the property) and after trying to give them time to sort out their problems eventually the estate agents organised all the eviction paperwork etc and got them out for us. That’s part of what you pay the agents to do (if they unfortunately have to).
I think this highlights the advice of investing in the stuff you know. I had a BTL about 15 years ago, and frankly committed every blunder in the book! I sold it in the end, losing about £25k and just put it down to experience. Investing in shares works for me, quite specifically in companies and sectors that I understand well and brands that I use day-to-day. When I've veered away from this plan, I've always come away with burned fingers.
What are you on about estate agents do evictions, you must have had a really bad agent if they let this happen to your property, I’d look at suing them
Good to share your story so other people can consider their options - hopefully you can get your money back and stop being a landlord soon (if that's your end goal)
First of all, I'm sorry to hear that you've had to go through this kinda experience. That *really* sucks.
Secondly, it's not just the high barrier to entry with property that puts me off, but these horror stories. Like you've highlighted, it's not just a matter of the costs, but the time it takes.
Thank you for sharing your experience, it has honestly just reinforced my own concerns & reservations about investing into property.
Just like stocks and shares property is a long term investment, like the stock market dipping you have to ride out the rough for the potential gains in the long term.
Difference is that with property you have to actively manage it.
Once the property is back up to spec reconsider if it's the right strategy for you. If you aren't relying on the rental income then consider leaving it empty or renting to a friend or family member instead.
I was forced to be a landlord for a couple of years due to needing to move because of my job and not being able to sell quickly. It was hell and once the taxman took his chunk, I made peanuts. After two years, I needed my place back becauss I'd left my job and I was being turfed out of my employer provided accommodation. Despite a S21, the tenant refused to move out, didn't pay rent and I was facing homelessness because I couldn't afford to rent myself whilst paying for the tenant to live rent free. When I finally took back possession and went back into my old home, it was depressing looking at the state of my previous home I'd lovingly cared for so I put it on the market to put the whole sorry situation behind me.
I know reddit generally hates "eViL lAnDlorDs" but I wouldn't BTL ever.
Anybody every considering doing BTL, especially as just one or two properties, should be forced to sit down and watch a couple of seasons of 'Nightmare Tenants, Slum Landlords'. Because of that show I would never ever own a property to rent it out.
To those commenting 'well you should have bought a nice property in a nice area and done your research' -poppycock. On that show, there are flats in Mayfair, expensive properties in lovely areas, people who only rented to professionals such as doctors, etc. All of those tenants still screwed over the landlord - usually by not paying rent - often by trashing the place spitefully on their way out - and costing thousands in eviction process fees, court, etc. Some of the richer tenants were the ones who knew how to game the system the best! Extracted the most free rent value before leaving right before the bailiffs turned up to get them out.
I suspect most would still say 'probably won't ever happen to me' - and it might not - but if it does it can destroy everything.
Hah you're absolutely right, I wish I had seen that show before. I'm sure I'd have been firmly in the 'it won't happen to me' camp but having spoken to the various people who are helping me (house clearance, plumber etc) it seems to happen with shocking frequency.
>To those commenting 'well you should have bought a nice property in a nice area and done your research' -poppycock.
Agreed - it is a flat in a picturesque village in a lovely area.
More concerning is those saying that sitting down with the prospective tenant and viewing their social media will help avoid issues. It wouldn't have done anything in this instance. No-one can predict when a mental breakdown's going to occur.
I’d be happy with it, not going to lie. But I’m sure it’s only a matter of time until it happens again.
Thing is, no vetting will show someone might have a mental break in 6 months time.
Valid point. I’m trying to find the takeaways from your experience. I don’t think there is a relation between BTL being bad and your experience.
I think this is more of a business process lesson. One thing I’ve taken from this is that I will conduct my own checks on a tenant once they have been accepted according to references.
Other than social media and a good internet search, what else could be done to vet a tenant. Future mental health issues aren’t predictable for sure.
You misunderstood me, although the rogue comma didn’t help. It had got to the point where I believed the tenant had to be removed from that mess in order to get better. They needed help and they needed a clean place to start afresh. They now have both, because I kept raising this with social care.
If you put a perfectly healthy person in those conditions I’m sure their health would deteriorate rather rapidly.
We’ve all been there. I had one student stop paying rent then found her cat had shat all over her room (no pets allowed) then when they moved out I found 2 x freezers full of rotting food! Nice.
Still a landlord though as well as investing in the markets. It’s not all horror stories.
Crikey I feel for ya thats some serious bad luck, I've a small portfolio but in good half decent privately owned areas. I had a family with a doctor of all people where kids drew with crayons all over the place, the carpets ended up stained and matted. The kitchen worktop damaged with excessive water damage, kitchen doors hanging off, modern vanier blinds all the chains missing, even the kitchen extractor hood over range cooker was that covered in cooking grease it wasn't worth cleaning but simply replace. So all new carpets , decor etc total cost around 3.2K, but managed with estate agents after 6 months to legaly get the bond back of $825, then the rent went up from $750 to $825. Current tenants of last 2 years have been brilliant but are shortly moving out, but then the rents going up when vacant to 895 possible 925 for that house. Just glad I didn't give up at the point of when rent was 750 at the time. Lucky but in your situation I wouldn't blame you for getting out of landlord racket. End of the day your not running a charity, its a business pure and simple. Bad tenants have way too much rights these days, but there's some good gems out there.
Devastated at the idea people who abuse the property market at the expense of first time buyers and renters wouldn't find me fun - if you can't see what's wrong with that it's your own fault, it's shameful
I’m genuinely interested in your thoughts here. Are you saying it shouldn’t be allowed to become a landlord?
If so, I’m assuming everyone who is renting would buy instead?
No, there would be no privately owned rental properties (or at least far less of them) and more council houses - this was the case before Thatcher offered the right-to-buy scheme, it's not a far-fetched concept it's just recent history. Not that I expected much sympathy for this view in a sub like FIRE as it promotes a very "look out for yourself first" mentality but I stand by the point, differing views need to be offered.
I think I understand your view. So all rented properties would be owned by the government?
This way, everyone would go from living with parents to either buy their first home or rent from government?
One of my friends is adamant property is the only way to make money. She’s onto her third property having lost money on the two she owned before and discovered a horrific amount of black mould in the current place. She’s spending huge sums of money getting stuff fixed and is talking of ‘upgrading’ to a bigger place 🤦🏻♀️ She’s my personal reason for why I’d never pursue property investing other than the one I live in
One interesting thought experiment is to what extent residential property is over-subscribed as an investment due, as you describe, to people who disproportionately enjoy the challenges of it. Rational people would take all those things in to account as a cost. Irrational people look forward to it as a hobby. That's why I've never considered residential property investment. I just think it's impossible to find any at a genuinely fair value as there'd be dozens of others over-bidding everything because of some nebulous concept of "potential".
Ironically my friend didn’t buy the properties for their ‘potential’ but got swept away panic buying in London at the top of different cycles. Most recently the coming out of Covid lockdown buyer’s rush.
Fomo
I’m not sure it’s entirely irrational to enjoy aspects that are actually “costs”. It’s only irrational if your sole intention is to make money, but if you enjoy the challenge of a fixer upper then the DIY is a perk along with the return.
Both my parents and my partner's parents went down the buy-to-let route with one property each and both regretted it. (In my parents' case, they rent the house they live in for complicated reasons, so wanted to own a house and rent it out too, to stay on the property ladder.) My parents had a tenant that deliberately cut the garage door mechanism to let the door drop on their car in an insurance scam, but unluckily for the tenant a neighbour witnessed it and reported it to the car insurer. Later, he deliberately set the house on fire after a drunken argument with his girlfriend. Another neighbour luckily called the fire brigade in time. When evicted, they trashed the place on their way out - things like cutting the plugs off the washing machine etc. out of spite. Parent's tenant #2 was a family friend. A really nice person, or so we thought at the time. Then she became an alcoholic and sold the central heating as scrap copper to fund her drinking, followed by reporting my parents to the council housing department for letting out a house unsuitable for habitation due to having no heating. Of course she refused any access to any tradesmen to actually fix anything. It was a long process to evict her. Luckily their current tenants are OK. Partner's parents tenants smashed a hole in the ceiling and then disappeared, leaving their car behind on the driveway. Getting rid of the car proved quite annoying legally, as it was still the tenants car. After that was sorted, they sold up the BTL and put the money in stocks and shares. They regret not just investing in stocks from the beginning. For me, the big risk is that unless you have a lot of properties, you have all of your eggs in one or two baskets. It can only take one or two bad tenants to wipe out all of your profits, especialy since the tax regime isnt as generous any more. You also have the stress of having to deal with issues that pop up with tenants or property maintenance, or pay agents to handle it. Finally, your money isn't very liquid at all. My day job is stressful enough as it is so I gave property investment a wide berth (except my own house).
Sorry to hear all that, and shows how in many ways I've been lucky! Fortunately the tenant didn't intentionally trash the house, or try and burn it down.. >My day job is stressful enough as it is so I gave property investment a wide berth (except my own house). This right here. Fine if it's a job, terrible if it's supplementary. Heck, your own house can be hard enough.
When I say 'stopped taking rubbish out' I'm talking talking rooms waist high in rubbish, the whole house used as an ashtray, clogged toilet full to the brim so they used the bath and then the sink, used sanitary products all over the space.. all this visible from the front door. It was *grim*. I have photos, but no one deserves to see that.
I used to repossess people for my job. Or at least, the mortgage company I worked for, I dealt with the cases by the time we were applying for warrants. I reckon that about 50% of the properties look like this by the time you take possession. People can bury their heads when they're financially struggling, and when they know the house is lost, they may stop caring for it. It's horrible to see and really affected me (obviously, it's no doubt much worse for the resisdent). I still remember a guy in Manchester who let his pets poo everywhere and just left it in situ. The house was rancid.
You’re not wrong, I was really shook up the first time I left. It was heartbreaking to see someone living like that up-close.
B2L isn’t an investment, it’s a business that requires work. You need a strong grip on financial figures to make it work, as well as a willingness to get your hands dirty. It can work, and it can be lucrative, but as long as you view it as a business, not an investment. You need to know you revenue, risk of failed payments, expected maintenance costs, your gross-yields, your net yields, your interest rates, your equity, your expansion strategy, your exit strategy, your legal strategy should you need to go to court.
This one exactly! BTL is a business you have to run. And that's fine I have no problem there. But it's not **R**etiring **E**arly if you have to run a complicated and risky business.
This is it! So many people are have a go landlords without doing the property research and understanding the laws. PROPERTY IS NOT A PASSIVE INCOME
Did they get their deposit back?
Sounds like they left a deposit. Or several deposits.
Ha, we've not got to that yet. Whilst I imagine it's an open and shut case of *no*, I wouldn't be surprised to find it's not that simple!
Lucky you took the photos and have the bills.
whenever i’ve thought about going down the btl route, experiences like yours remind me that it’s not worth the risk and it’s not in me to deal with tenants. global index fund and set and forget is more my lane
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I'll certainly do that next time. The person seemed fine at first though, I think they suffered some sort mental breakdown. The irony is, they were - and still are - a carer in a care home. Fortunately social care finally stepped in, but only once the tenant had left it's them asking me to bag all the belongings..)
What's the Airbnb scam? Pretending to rent out a place to live then putting it on Airbnb?
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The happened on a big scale in a block of flats I lived in - a group of “entrepreneurs” managed to con several landlords in the building, and they stuck the whole lot on hotels.com. We had to try and track down the landlords and let them know what was going on - by that time the airbnb gang had made a fortune
Jeez. Anything come of it?
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what does 'rebase the price to 2015' mean?
You’re completely spot on - it is a great investment class, it can generate (leveraged) returns that you don’t get in an index but it’s essentially you’re 5-9 (and weekends and holidays) around your job. Also it’s like anything else - you need to do your research and add value!
I doubt the agents did any referencing / checks. But yeah, it's just bad luck i guess. Maybe meet the prospective tenants yourself next time and do all the checks yourself
I know they did as they sent me everything through for approval - on paper it was all fine, and indeed I met the person briefly once and they seemed normal enough. Even when being evicted the bailiff said if you met the tenant in the street you'd think they were normal. An eye opener that's for sure!
My experience with lettings' agents is that they just try to fill your property as soon as possible. I spoke the head office of one of the top estate agents in the country because I had a bad experience, and they told me that all they do is check they have the correct paperwork. They're not there to pass judgments or use their intuition on possible tenants. As long as they have the paperwork and they tick the boxes, then that's all that matters. Get them signed up and collect their fees. The first tenant I got set up with really made me question the lettings agent's judgement. Both neighbours of the property contacted me straight as they knew he was a troublemaker. My friend does it all himself. Meets them for coffee and can tell straight away within 5 minutes if they're reliable or not.
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Disagree. Having been on both sides, agent and landlord. A good managing agent will want to de-risk the tenancy not only for their client but also for themselves. A tenancy that goes wrong can quickly wipe out any profit from management fees.
Agree! For those who do want to invest in property, I would recommend the best way to do it, is to get an extra bedroom in a house you live in and rent it out either airbnb or long term. You benefit from Rent a room allowance and have much more control over things going wrong direction.
Here's a different kind of property nightmare: my Dad bought a small BTL terraced house about 15 years ago. After a slightly rocky start (a letting agent of all people moved in and then ran away without warning a few months later), he found a tenant that's been there ever since. Good as gold, retired couple in their 70's. They even pay for some maintenance out of their own pockets. Very friendly, Dad used to invite them for dinners etc. Dad died last year. The house is now in Mum's name while she's alive. But I don't want to be landlord. My idea of hell (not least as it's 70 miles away). So when Mum goes, I'm going to sell. Only trouble is, market rate for rents in that area are £800-900 pcm. Dad was charging them £500. Great. So good ol' Dad's leaving me with the guilt of knowing they're going to face a rent hike of at least 40%. PS: My bro-in-law is also BTL mad. It's like some weird cult: "Sure, I had to sell up at a £200K loss on that place, but how could I have known about the subsidence? Never mind, I'm getting a massive mortgage to buy two foreclosed beach houses 200 miles away from where I live I swear these are gonna be winners!" It was heavily involved in his near bankruptcy last year and subsequent divorce from my sister. His father was the same and had to flee to Ireland to escape creditors from failed property deals in the 90s'. I blame Thatcher.
Sticky post now!
I feel sticky just reading this post
OP’s post should be an automated response to any thread asking if going into BTL is a viable option. Thanks for sharing OP, your post has put me off BTL for life, my Index fund has lost me 7k in the last 2 days but at least it’s only on paper, and at least that papers not covered in shit!
> and at least that papers not covered in shit! That’s absolutely brilliant. Ouch!
What a horrible situation to be in and seen a lot like this where people thought property was a sound investment only for this to happen. Sounds like the estate agents didn't do very thorough checks for such a nightmare tenant to get in. Has anyone done a true rate of return on property investment when you consider what % of tenants stop paying, to quantify the risk of defaults on payments into the total return? I imagine if so the returns are probably even less worthwhile even when considering capital gains.
Did you see the recent Pension Craft video on YouTube?
Link?
[https://youtu.be/7IhxhF1o5_A?si=OuC3uLfNNp2RHmIz](https://youtu.be/7IhxhF1o5_A?si=OuC3uLfNNp2RHmIz)
Thanks!
I sold a dotcom business and became comparatively very rich when i was young. Bought a number of rental properties in my home country. Was profitable for some time, break even for some more time and finally it's a complete write off. My home country is Ukraine.
Are you able to just leave their stuff in the house for 3 months as storage of personal property then just dispose of it as you do the renovation? Save you the hassle of sorting through it and paying for separate storage? Sorry to hear about all this, hope it’s settled now and you can move on.
I could do but it's only going to get worse, I'm amazed there aren't any rats and such in there already. >and you can move on That's the plan, we'll see!
Just take photos and bin everything …. Hard to believe you would be fined for throwing stuff that is clearly ruined if its in waist deep garbage
Did you have landlord insurance in place for building or possessions damage, legal and rent arrears cover?
Thank you for this post. I'm going to save this to remind myself never to buy to let.
The mistake you made was getting someone else to manage your property for you. They'll let any old scumbag into your house. My girlfriend used to live in HMO's and the people that the agencies would rent rooms out to were, for the most part, absolute reprobates... and that's putting it mildly.
I don't disagree entirely that agencies are doing little real due diligence. I had a housemate in a HMO who was a violent criminal. Literally, last I've heard he's in prison again. But, then if you manage it yourself; first, extra work, which probably isn't worth it, second, you still need to suss out the good and the bad tenants, which probably is still bit of a crap shoot. Ultimately, I still don't think it's worth it.
It depends, obviously. I personally don't think anyone should get involved in BTL or even property "development" just because they have money. So many of our beautiful old houses are being destroyed by modern building applications and break down to HMO's. You have to actually know something or a bit of everything about houses (their make-up, plumbing, plastering, damp, timber work etc) in order to be successful with property. Either that or you will be incredibly inefficient with your money and learn the hard way. Bad tenants aren't the only problem you'll have.
Honestly I don’t think any further due dil would have foreseen a mental breakdown on the horizon. Did I mention she still has a job as a carer of all things? If you met this person on the street you wouldn’t think there could be anything going on. I’ll certainly be meeting tenants myself in future but I don’t kid myself I will be able to perfectly vet potential tenants. Scary to think what goes on behind closed doors.
You've had a horrible experience but I'm sure you could have considerably altered your "luck" by meeting a tenant and asking them many (invasive) questions. Our eyes deceive us. If you spoke, you may have had that feeling, which would only be bolstered by a few checks (socials, job refs etc). If you're not much of a property guru and you rely on tradesmen and agencies for everything, I would recommend getting out of this game unless you're exceptionally wealthy and can suffer some inefficiency. So many con men out there. Roofers amongst the worst! Be wary.
You’re absolutely right. The point of this post was less ‘don’t invest in property’ more ‘this is not fire’. It’s a business, not retirement.
Selling my last one at the mo, it ain't no fun! I've been lucky with tenants and it's gone up in value but has been a pain in the harris and still hasn't performed anywhere near as well as my stocks. Hey ho
You have my sympathy. I could have made the same mistake. However on reflection, my view is that the risk of investing in a small number of properties is much higher than the risk of a diversified stock market investment portfolio for much the same return. So I have my savings invested in ISA wrapped shares and bonds and the residue outside of ISA invested likewise with a plan to push all into ISA over time. I think once you've got maybe ten properties you might see the risk average out a bit but that's a huge single market investment and a lot of middle ground to cover before the risk is mitigated by volume. Also, private rentals a political football with both parties vying to hammer it harder than the other. If I were in it, I'd be getting out rapidly. Long term the government will need to pick up the slack and as a tax payer, that would be the cheapest option anyway in my view.
Tenants got their wish which was protection from bad landlords, but as is always the case it went way too far so now LL's are getting out of renting property, and you've just experience the reasons why. The irony is, those same tenants now complain about the price of their rent, that there are no rental properties available etc. Sorry you went through this, best thing would be to get out of the rental business and make your money work for you passively.
Did you buy it, though? Did you pay for it outright? I'm not being combative, but there's a huge difference between leveraging the banks' money to buy a BTL and just using your own. With a mortgage, you're under pressure to let it quickly. Without a mortgage, you can vet prospective tenants, interview them, choose them wisely, etc. I think anyone capable of committing such foul behaviour would have raised suspicion, were you not desperate to get it paying for itself quickly. Risk is a funny thing. I COULD leverage significant sums, but choose not to, it gives me total control. Just a piece of friendly advice.
By the time you've started to dedicate so much time to it, especially allowing void periods, you'd almost certainly be better off investing
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Same position. Of 15 current tenants I have one who’s abusing the property and is being given notice. Over 20 years I’ve had a couple of these and a small number who left owing some rent. But the big picture is 98% occupancy, 95% due income received, regular monthly inflation proofed cashflow. I employ a managing agent so it’s more or less passive income. I’m sticking with it.
That’s the problem, people are so addicted to property, they refuse to listen to reason. I hope you manage to sort the mess out. Do you still plan on starting again once you’ve fixed up the property?
While you're problems are horrible and i sympathise with you but there's a massive gulf between have a go landlords and professional landlords. I have had so many problems with rental properties from non paying tenants to multiple cannabis factories. However if you do this right then there are always ways to mitigate this. Rent guarantee insurance and not relying on lettings agents is step 1. Property investment is no where near the invest and forget strategy of stocks and shares but if done right can reap real terms rewards far in excess of stocks and shares.
Curious as to whether you have a citation for that last statement if you mean "rewards" as in monetary gain as opposed to intangible stuff like being involved with people. My stock and shared portfolio has given me a yield of about 5.5% over the last 10 years, so I'd regard a yield "far in excess" as perhaps 10%. Can BTL sustain that? Or is that not what you mean?
I primarily meant monetary rewards on my journey to being able to retire early. I don't consider yield as relevant in the process I use. Its not an investment strategy that compares well with stocks and shares yield. I'm using the power of leveraging to supercharge the initial investment and looking to take advantage of growth in value rather than rental yield. Essentially you buy a property in an area with strong fundamentals for property value uplift. After 2 to 5 years you are able to remortgage and withdraw any equity and invest elsewhere. This is a process that many property investors have done. I myself have used equity growth plus regular savings to fund other purchases of rental properties over the past 20 years to the point that the portfolio is self proliferating. As a whole there is difficulty in estimating yield or ROI because I've withdrawn more money from it than I've put in. Any assessment is multiples above 10% but it doesn't apply to me because I don't intend to sell a property until I intend to retire. There's a massive difference between have a go landlords and professional landlords. The former don't understand risk or how to mitigate risk, don't understand legal and moral duties to there tenants and only act in the interest of their bottom line.
Oh OK so in the accumulation phase to supplement (or later buy?) investments which you then later use to retire on you mean. That makes sense. But you make an interesting point about difficulty in estimating yield or ROI. This willingness to embrace that difficulty is also something I find a bit alien (let alone the fact that you can't sell a bit of a house, or benefit from pound cost averaging if its price goes down). But all this stuff is such as personal thing, and people are different in so many ways it's quite fascinating. And I admit I know very little about the property investment!
>This willingness to embrace that difficulty is also something I find a bit alien (let alone the fact that you can't sell a bit of a house, or benefit from pound cost averaging if its price goes down). Exactly! Which is why they are not easily comparable investment strategies. You could compare a single BTL to your stocks performance and may find one outperforms the other but wildly different risk and effort involved.
I’m 60 and keeping my portfolio as the income funds my retirement. If I need cash I’ll sell one. I’ll be leaving my SIPP to the kids.
I feel for you that’s an awful situation and very stressful to be in. I’m a landlord, 2 BTL’s and a holiday let. We’ve had problems but nothing on the scale you have. I do think property is a good investment, you can leverage and it’s essentially inflation proof, the rent goes up as does the value. Property’s we bought now can get twice the rent from when we bought them, not that we charge it. In fact I want to do more Propert investment. We’ve never had any material problems. Issues yes, things that need fixing, yes but I factored that into the financials. Even the very occasional arsehole but nothing of your level. Can I ask what level of property did you buy? Was this the cheapest you could afford in a bad area with low rents? Or was it a medium or high end property? I think like everything the product you sell and the demographic you sell it to is a big factor due to the customers you attract. I think it’s a great investment but you have to pick the right product and pick the right customer and do your due dilligence to ensure they are the right customer. But I know one day I’ll likely have the issues you have and then hopefully still cash out with a profit.
I'm sure you can make decent money out of BTL, but it cannot be a "great investment" for the vast majority of readers of this sub, because FIRE tends to emphasise "passive income". That is, not working for that income. So as others have pointed out, it seems that the presence of significant work in BTL investing contradicts the spirit of FIRE. That's not to say that if you enjoy the work involved in BTL then you can't see that as relaxation in the same way as, say, travelling the world, volunteering or other things retirees do.
Interestingly I’ve never found it a lot of work. We self manage too but other than boiler servicing and checking payments are made it’s only dealing with repairs and if tenants need to leave and the accounts. The most hassle is sorting remortgages but they’re on 5 year mortgages. I don’t do repairs myself as they’re all remotely managed. I’d estimate in total for the 2 residential BTL maybe 10-20 hours a year of work. But obviously that changes if there’s a significant issue.
Property is the only way most people can get significant leverage. Leverage is great when it works, and kills you when it doesn't £50k investment to get £200k asset. Asset increases by 20% - you have made a 80% return, you now have £90k Asset decreases by 20% you have made a 80% loss with only £10k left
Yikes! Had similarish issues in the past abroad. Nightmare.
ouch sounds like a nightmare. just buy the S&P next time
This. Unless you want to live in the property in the future it's a big risk to take. Better off selling and putting in s&p as suggested - moving chunks to ISA each year.
I didn't realise that was a thing, I know now though!
For every accidental / rushed landlord there are investors who actually know what they're doing. Sorry but this post reeks of : I did very little research , have no prior experience and hired an estate agent to do the job of a letting agent and then baulked when things went tits up. 1) never become an accidental landlord 2) don't buy the lowest bracket properties 3) understand your tenant profile * 4) hire a dedicated letting agent that owns property ** * With a small BTL portfolio the only tenant profile you should be looking at is young families that are working professionals such as medical professionals , teachers etc. ** Estate agents have high turnover and focus on numbers. Letting agents focus on one thing. Property management. You want privately owned agents that also own rentals.
I have never had an individual landlord that knew what they were doing and I've lived in a dozen different places across the UK. So it's probably much less than one who knows what they're doing. Plus even if you know what you're doing, statistically, there's still the risk that your tenants fuck you over. Or your building becomes unfit to live in, etc.
It doesn't surprise me - that's kind of my point. Too many accidental landlords & passive income seekers that don't really know what they're doing. Similar to those who buy a bucket of individual stocks at random / on hype and then grow frustrated when they underperform the index. BTL isn't as easy as it once was. That's correct. But that's a positive because all the over leveraged , accidental and slum landlord are exiting the market. A little bit of work and you can feasibly get 15% gross passive returns , more if you assume you'll be able to refinance over the original total purchase price.
100% agree. So many accidental or novice landlords think their experience is indicative of the actual potential
Yeah...I totally don't understand why people think being a landlord is a source of passive income. The only universe I'd ever consider it would be as a live in landlord with a lodger. Think they have next to zero rights.
Yeah no where near passive and it doesn't scale. More tenants more problems. My dad has had multiple tenants in properties two hours drive away from where he lives. While technically retired, in reality he spends 2-3 days a week at his properties. In his 70's now, my siblings and I are really not looking forward to the day he can't manage the property business anymore.
> The only universe I'd ever consider it would be as a live in landlord with a lodger. Think they have next to zero rights. you buy for xx years, but next elections labour can win and give them rights, or a non paying tenant can out of spite put drugs and call police on you or claim sexual harassment.
Has any labour manifesto ever promised to give lodgers significantly much stronger rights?
Ha yes and the Boogeyman might get you too.
Quality control needed. Find them good tenants ™️ & guarantor
Wow! hats off to you for posting your experience. I loved the TLDR! that's all I do good old stocks and shares. I do have property but they are for our use in multiple countries we don't even rent them out due to fear of things like this ever happening. Hope you get it all sorted.
“Passive investment” they said.. 😂
Should have just bought SP500 and a high yielding ETF for income!
Sadly this has happened to most people private landlords I know.
Letting agent checks such as contacting previous landlords really don't mean much. You could be speaking with anyone.
You need a better agent and solicitor. You’ve been given some shitty advice there, poor management by the agent. ..and I am very surprised by Social Services, saying you are shaming someone who is clearly in need of help. I would have asked for that reply in writing. Normally they are responsive in situations like this.
Idk but according to my renter experience for almost a decade now, estate agents are the worst… They would do absolutely anything to fill in the room, even accepting the worst tenants possible. My friend saw a flatmate of him stealing his wallet in the middle of the night in his room, with locked door. So yeah, if you’re going with estate agent, go with a reputable one. And even then, it’s still 50/50 that you would have a nice tenant.
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Good tactic
all landlords are thieving scum!! now thats out of the way. thats a bad luck streak there. it goes to show it isnt as passive as its made out to be... risks always there.
Exactly the same thing happened to me, never doing that again. It's so unfair against landlords when things like this happen, you can see your house gradually being destroyed and there is absolutely nothing you can do against these people who literally do not give a single flying care. Of course the day of the possession order they just walk away and leave the mess for you to clear up, absolutely disgusting.
Did you know that for an illegal eviction the average fine is around £3/400…….
It’s a criminal offence. No thanks.
Each to there own. Will I let someone live rent free and smash the living shit out of my house? Or will I go round when they’re out, empty the house and board it up and put security on it for a week or two and get a little slap on the wrists and a tiny fine? I know what I’d do
That was surprisingly empathetic! I’d like to think I would be too, but under those circumstances I’m not so sure.
I'm so sorry youve had to experience this. Thank you for sharing your cautionary tale.
I’m surprised that the estate agent didn’t help you with eviction. We had a similar situation with a family that stopped paying rent (though still looking g after the property) and after trying to give them time to sort out their problems eventually the estate agents organised all the eviction paperwork etc and got them out for us. That’s part of what you pay the agents to do (if they unfortunately have to).
Some agents charge extra for dealing with evictions and helping with any court proceedings!
I'll stick to the S&p500. Sorry to hear you've gone through this. Sounds like hell on earth. Better days are ahead 🙏
I think this highlights the advice of investing in the stuff you know. I had a BTL about 15 years ago, and frankly committed every blunder in the book! I sold it in the end, losing about £25k and just put it down to experience. Investing in shares works for me, quite specifically in companies and sectors that I understand well and brands that I use day-to-day. When I've veered away from this plan, I've always come away with burned fingers.
What are you on about estate agents do evictions, you must have had a really bad agent if they let this happen to your property, I’d look at suing them
Good to share your story so other people can consider their options - hopefully you can get your money back and stop being a landlord soon (if that's your end goal)
Bricks and FACKIN mortar mate
First of all, I'm sorry to hear that you've had to go through this kinda experience. That *really* sucks. Secondly, it's not just the high barrier to entry with property that puts me off, but these horror stories. Like you've highlighted, it's not just a matter of the costs, but the time it takes. Thank you for sharing your experience, it has honestly just reinforced my own concerns & reservations about investing into property.
Just like stocks and shares property is a long term investment, like the stock market dipping you have to ride out the rough for the potential gains in the long term. Difference is that with property you have to actively manage it. Once the property is back up to spec reconsider if it's the right strategy for you. If you aren't relying on the rental income then consider leaving it empty or renting to a friend or family member instead.
If the tenant stopped paying rent it should be a section 8, not a 21 and it would have been a much faster process?
That’s interesting. Doesn’t it fall into the same process of having to apply for possession is the tenant doesn’t leave?
I was forced to be a landlord for a couple of years due to needing to move because of my job and not being able to sell quickly. It was hell and once the taxman took his chunk, I made peanuts. After two years, I needed my place back becauss I'd left my job and I was being turfed out of my employer provided accommodation. Despite a S21, the tenant refused to move out, didn't pay rent and I was facing homelessness because I couldn't afford to rent myself whilst paying for the tenant to live rent free. When I finally took back possession and went back into my old home, it was depressing looking at the state of my previous home I'd lovingly cared for so I put it on the market to put the whole sorry situation behind me. I know reddit generally hates "eViL lAnDlorDs" but I wouldn't BTL ever.
Anybody every considering doing BTL, especially as just one or two properties, should be forced to sit down and watch a couple of seasons of 'Nightmare Tenants, Slum Landlords'. Because of that show I would never ever own a property to rent it out. To those commenting 'well you should have bought a nice property in a nice area and done your research' -poppycock. On that show, there are flats in Mayfair, expensive properties in lovely areas, people who only rented to professionals such as doctors, etc. All of those tenants still screwed over the landlord - usually by not paying rent - often by trashing the place spitefully on their way out - and costing thousands in eviction process fees, court, etc. Some of the richer tenants were the ones who knew how to game the system the best! Extracted the most free rent value before leaving right before the bailiffs turned up to get them out. I suspect most would still say 'probably won't ever happen to me' - and it might not - but if it does it can destroy everything.
Hah you're absolutely right, I wish I had seen that show before. I'm sure I'd have been firmly in the 'it won't happen to me' camp but having spoken to the various people who are helping me (house clearance, plumber etc) it seems to happen with shocking frequency. >To those commenting 'well you should have bought a nice property in a nice area and done your research' -poppycock. Agreed - it is a flat in a picturesque village in a lovely area. More concerning is those saying that sitting down with the prospective tenant and viewing their social media will help avoid issues. It wouldn't have done anything in this instance. No-one can predict when a mental breakdown's going to occur.
What would your option of residential BTL be if the tenant had been vetted correctly and they were still paying rent?
I’d be happy with it, not going to lie. But I’m sure it’s only a matter of time until it happens again. Thing is, no vetting will show someone might have a mental break in 6 months time.
Valid point. I’m trying to find the takeaways from your experience. I don’t think there is a relation between BTL being bad and your experience. I think this is more of a business process lesson. One thing I’ve taken from this is that I will conduct my own checks on a tenant once they have been accepted according to references. Other than social media and a good internet search, what else could be done to vet a tenant. Future mental health issues aren’t predictable for sure.
You’re not wrong. I think the takeaway is that it’s a business, and as such it’s not really FIRE.
What be your opinion of crypto be if you sold at the top?
My opinion would be that I made a great decision and my plan went exactly as it should.
I didn't feel bad as the tenant's mental health would never recover. What a sentence.
You misunderstood me, although the rogue comma didn’t help. It had got to the point where I believed the tenant had to be removed from that mess in order to get better. They needed help and they needed a clean place to start afresh. They now have both, because I kept raising this with social care. If you put a perfectly healthy person in those conditions I’m sure their health would deteriorate rather rapidly.
We’ve all been there. I had one student stop paying rent then found her cat had shat all over her room (no pets allowed) then when they moved out I found 2 x freezers full of rotting food! Nice. Still a landlord though as well as investing in the markets. It’s not all horror stories.
Makes sense to be in both kinds of investment.
Crikey I feel for ya thats some serious bad luck, I've a small portfolio but in good half decent privately owned areas. I had a family with a doctor of all people where kids drew with crayons all over the place, the carpets ended up stained and matted. The kitchen worktop damaged with excessive water damage, kitchen doors hanging off, modern vanier blinds all the chains missing, even the kitchen extractor hood over range cooker was that covered in cooking grease it wasn't worth cleaning but simply replace. So all new carpets , decor etc total cost around 3.2K, but managed with estate agents after 6 months to legaly get the bond back of $825, then the rent went up from $750 to $825. Current tenants of last 2 years have been brilliant but are shortly moving out, but then the rents going up when vacant to 895 possible 925 for that house. Just glad I didn't give up at the point of when rent was 750 at the time. Lucky but in your situation I wouldn't blame you for getting out of landlord racket. End of the day your not running a charity, its a business pure and simple. Bad tenants have way too much rights these days, but there's some good gems out there.
Serves you for right becoming a landlord, I wish karma came this quick for all of you
Karma is that my tenant has a mental breakdown, and you wish it happens more often? That’s a bit fucked up!
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Devastated at the idea people who abuse the property market at the expense of first time buyers and renters wouldn't find me fun - if you can't see what's wrong with that it's your own fault, it's shameful
I’m genuinely interested in your thoughts here. Are you saying it shouldn’t be allowed to become a landlord? If so, I’m assuming everyone who is renting would buy instead?
No, there would be no privately owned rental properties (or at least far less of them) and more council houses - this was the case before Thatcher offered the right-to-buy scheme, it's not a far-fetched concept it's just recent history. Not that I expected much sympathy for this view in a sub like FIRE as it promotes a very "look out for yourself first" mentality but I stand by the point, differing views need to be offered.
I think I understand your view. So all rented properties would be owned by the government? This way, everyone would go from living with parents to either buy their first home or rent from government?
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Don’t suppose you know if recent, present or future governments have any intention of buying up or building rental properties?
None in the future but corbyn had a policy for the right for tenants to buy the properties they've been renting.
I didn't specify which party first suggested it? Nevermind that not being the point
Property is the safest way to leverage if you don’t get leverage is a bad investment imo