As a landlord your income is the rent you receive. It can also cover any other payments received from tenants for services which have been provided by the landlord – these included:

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Being stuck with an uncommunicative douchebag tenant that’s fallen deep into arrears is probably the most frustrating and terrifying scenario for a landlord. It’s truly gut-wrenching.

But what about second place? I’d say that being pinned down with a property that won’t shift for months on end is a strong contender. I’ve personally never been in that situation, but I know many landlords that have, and the root cause is almost *always* the same.

Most landlords and experts will instinctively say it’s because of one or more of the following reasons:

  • Price – the asking price isn’t competitive.
  • Supply – there’s an oversupply of properties in the local area.
  • Photography – poor photography being used to advertise.
  • Rightmove/Zoopla – property isn’t being marketed on the two biggest UK portals.
  • Condition – poor decor, unsavoury odours, general uncleanliness, and cheap and ghastly fittings.

If you are struggling to rent your property, I’d strongly encourage you to investigate each of those areas. However, while they are the most common contributing factors to prolonged vacancies, they’re often not the makeup of the actual cause.

The real reason many landlords struggle to rent their property is often a lot more difficult to resolve, because it’s psychological, and it’s based on ingrained standards. We all have standards, and some are notably lower and higher than others. But the problem is, our standards are based on our own experiences and perception, so it isn’t easy to reason or negotiate with.

The reality is, many landlords put properties onto the market after running a quality assurance assessment based on their own standards, which often doesn’t align with the expectation of the market. It’s easy for me to tell someone their standards are piss-poor, but it’s difficult to convince them I’m telling the truth when their reality is telling them something completely different.

It’s no one’s fault, really. But it’s still a problem that should be recognised.

I remember 5 or so years ago, when I had a couple of school teachers for tenants. They were a pleasant enough couple, but filthy as fuck. The whole place was just cluttered with crap, and they had crammed each room with oversized furniture. Lord only knows how they manoeuvred around the place. On a sidenote, is it just me, or are teachers notoriously messy?

Anyways, when they vacated, the hubby said to me, “The Mrs has been cleaning the place thoroughly for days. She’s got OCD, she’s obsessed with cleaning, it’s spotless. You won’t have to do a thing.”

When I conducted the final inspection it quickly became apparent that their definition of cleanliness was total bullshit. There was dust and cobwebs in plain sight, literally everywhere. The cooker was also smothered in congealed jizz. Either they were severely visually impaired, or their standards were lower than a tramp living under a bridge… and every other person that considers copious amounts of dust inadequate.

In any case, I evacuated them from the premises as quickly as possible (without making physical contact, of course) and called in a professional cleaning company immediately.

Test Case: The property that won’t rent

It must be noted that I’ve been umm’ing and errr’ing for the past 30 minutes on whether or not to use a real example, because it could be it’s directly offensive to someone that probably doesn’t deserve the heat.

But screw it, I’ve decided to bite the bullet, because landlords stuck in this rut can learn from this, even if it’s a bitter pill to swallow. My only hope is that the chap I’m using as an example doesn’t cross paths with this blog post, and if he does, I hope he doesn’t take it entirely the wrong way!

Today I stumbled across a thread on the PropertyTribes forums, where a landlord has been struggling to let his 2 bedroom flat since July. Considering it’s September now, that’s one hell of a long stretch- his pockets must be bleeding.

This is what the landlord said about his property:

It was renting for £975pm. The mortgage, service charge and management fees came to nearly £750pm. It has been vacant since July. I have dropped the rent to £895 but have only have an offer of £800.

I have aranged to meet my agents on Friday.

I am trying to decide what to do with it.

He then shared a link to his rental property on Rightmove, which you can view here.

Bit dingy, ain’t it?

Without trying to sound like a condescending, snobby dick-face… if the landlord is not understanding *why* his property isn’t being swept off the market (which clearly is the case), it indicates to me that his standards aren’t particularly high, or at least, inline with the market’s expectation.

The property is glaringly out-dated, from the grubby bathroom to the lackluster carpets, so the initial £975PCM asking price is scary. Even the revised £895PCM price is a little awkward. But the issue is, he’s not seeing what I’m seeing, otherwise he wouldn’t have created the forum thread in the first place, and contemplating “what to do”

Right? Right.

It would be another discussion if he just openly confessed, “I know the property looks dated, but I just don’t have the money to invest.”, or something along those lines.

The landlord also mentions the following, “The best thing about the flat IMO is its size – it has 50% more floorspace than the flats on the lower floors. Some of that is wasted on a very large bathroom. That is not mentioned in the description.”

To me, that’s another indication that he’s missing the obvious and living in cuckooland; the poor schmuck is under the impression that if he informs people that there’s more square footage of that crap he’ll encourage enquiries! *sigh*

His comment implies he’s not actually getting the enquiries, let alone the viewings, which means protective tenants aren’t liking what they’re seeing from his advert! It’s a proven fact that photos usually do the majority of the leg work when generating enquires, but if your centre-piece is a gloomy kitchen and bathroom from the 90’s… there’s very little gravitation pull, and highlighting more of ‘it’ is just suicide!

It’s not a terrible property by any means, and it’s arguably better than a lot of crap other landlords serve… but is it actually worth £975PCM in its current condition? Bitch, please!

Most people will say, “The problem is the condition of the property, specifically the out-dated kitchen and bathroom (two key areas which notoriously sell properties).”

But that’s not the real problem, is it? The real problem is that the landlord perceives the condition of the property to be acceptable and essentially worth the £975PCM price-tag. And that’s my point; it’s a mindset issue, based on ingrained standards. He’s seeing one thing, and I’m seeing something completely different.

So, so, so many landlords have this issue. I’ve seen genuinely good landlords, who aren’t tight-fisted at all, and have their tenants best interest at heart, that struggle to let their property simply because they’re being guided by their own standards, which is often lower than required.

On a sidenote, I think the letting agent he’s using is providing an embarrassingly poor service, but that’s another issue altogether.

Comparing the market

I did a quick search on Rightmove for 2 bedroom properties with in close proximity and similar price range, and the first result that landed on my radar was this 2 bedroom apartment, £900PCM.

When comparing the two properties, I know which I’d rather snap up. There’s an obvious difference in quality, not to mention photography (which has been proven to make all the difference).

I don’t know the Reading area, so I don’t know if one property is situated in a more premium location than the other. But it’s irrelevant, because I’d be willing to move a little further afield from my desired location if it meant living in a significantly better conditioned property, and I think that’s a general consensus among most folk.

If your property isn’t renting after doing the basic/common checks…

I strongly encourage you to consider that your standards might be lower than the current markets’, even if that’s a kick in the nuts. Like I said, it is a tough pill to swallow. I’m not saying you need to offer high-end properties, I’m saying the price-tag needs to reflect what you’re offering. So if you’re offering a plate of steaming shit, you should be asking for the going rate for said plate of shit!

I would say “check out the competition for a reality check”, but that’s unlikely to work if it’s an issue of misaligned standards. Even if a landlord independently scopes out the competition, he probably won’t recognise the difference in standards, or at least, the gaping holes in their own proposition. That’s the problem.

To clarify, I’m not trying to shit on anyone’s standards here. People should live how they want to live, and I have no qualms with that. But this isn’t about how YOU live, this is about how your tenants live, and it’s about maximising your profits by providing tenants with actual value (i.e. not your perceived value). If you fail to provide, a few outcomes will most likely occur:

  • Excessive vacant periods.
  • You’ll eventually be forced to significantly lower your rent after you’ve wasted time ‘testing the market’.
  • You’ll get dog shit tenants with equally low standards (trust me, you don’t want that).
  • You’ll find tenants that won’t stick around for long because they’ll eventually cotton onto the fact their money can go further. Bear in mind, a high tenant turnover rate can be equally as expensive as long vacant periods, if not more.

It’s also worth noting three other points:

  • The landlord may have made more money if he accepted the £800 offer (of course, it depends on the date he received the offer, and how long it eventually takes to find tenants). This goes back to another big mistake landlords often make: prolonging the vacant period to hold out for ‘top-end’ prices (especially when you don’t have a comparatively top-end product).
  • Generally speaking, if a property isn’t receiving serious offers with in a week or so (especially in today’s booming rental market), it’s safe to assume there’s a glitch somewhere! If there isn’t a serious offer in 3 months, that usually means there’s a fundamental issue with the property, which goes way beyond correcting the basics.
  • It’s common for some landlords to have the complete opposite problem, where standards are so elevated that overspending occurs! But in this instance, you’re unlikely to struggle to occupy your property! In any case, understanding your market is crucial.

In conclusion, don’t be ruled or clouded by your own standards… especially if they’re out of sync with the market!

So why do YOU think the property is struggling? Thoughts & comments all welcome, as usual xo

In strong markets even forced sales are ‘very likely’ to deliver capital gains to vendors who can’t service their mortgage.

That’s the message from RIskWise Property Research following analysis of the housing market in Australia.

In strong housing markets, such as Victoria and NSW, the vast majority of postcodes that had high default rates in 2015 had delivered ‘very healthy capital growth’ which exceeded the Australian benchmark. Property Market

And this means the risk of forced sales and the inability to refinance is much lower.

Our research shows that a large number of postcodes in NSW and Victoria which had high default rates also had strong capital gains.

This means that in strong property markets high rates of credit defaults do not lead to price reductions.

While loan applications should definitely be thoroughly reviewed, the default rate, by itself, does not necessarily mean projected price reductions.

The impact of high default rates needs to be assessed jointly with many other factors that set the overall strength of the market.

The table below shows the capital growth for houses and units in the past three years for high credit default postcodes:

Aus Top 100 Postcodes Loan Default

For example, in Victoria, 15 out of 18 postcodes, outperformed the national benchmark for capital growth for houses and for units 13 out of 18.

Victorian postcodes such as Broadmeadows, Endeavour Hills, Gladstone Park, Mt Evelyn and Bunyip all suffered from high default rates but can be seen to deliver ‘very strong’ capital growth.

Vic Loan Default High Growth

Analysis showed it was evident the majority of the postcodes with high default rates had achieved capital growth of at least 3 per cent per annum which exceeded the CPI benchmark by 1 per cent.

This included Tasmania where houses in 18 of the 23 postcodes with high default rates had outperformed this benchmark. 

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However, he said it was important to note there was a significant difference between houses and units in some areas and in Tasmania only four postcodes for units had outperformed the benchmark.

This is because houses and units are not fully substitute products and units do not have the same appeal for families looking for at least three bedrooms, two bathrooms and a decent-sized block.

In postcodes with weak property markets, oversupply and overall poor demand for housing, there was a strong connection between poor or negative capital growth to high rates of default, particularly in mining areas following the end of the mining boom.

This left many owners exposed to significant equity risk as well as cashflow risk due to very low rental incomes and very high vacancy rates – a major factor in mortgage stress and defaults.

Aus Loan Default Low Growth

So, while it’s true that if there are arrears you can have forced sales and therefore price corrections, this is not necessarily the case in all property markets.

In fact, the number one factor that will determine price corrections or not is the strength of the housing market, combined with the accrued equity of the mortgage holders. Mortgage Concept By Money House From The Coins,business Finance And Money Concept,saving Money Concept To Buy A House.

In other words, if you look at Australia’s worst performing regions for credit defaults in poor markets compared with the worst performing regions for defaults in strong markets with good equity, you will see there is a marked difference between the two.

If you have negative equity combined with a weak market obviously defaults have an impact, but if the market is strong and equity is high in dollars and percentage, you will probably not see price reductions as a direct result of credit defaults.

Most property experts took a blanket approach to credit defaults with no distinction between strong and weak markets.

However, he said when there was a strong market, such as in Greater Sydney and Greater Melbourne in 2015 there was solid capital growth, which meant most property owners would now enjoy good levels of equity.

Sydney Melbourne Median Equity And Holding Period

In addition, in 2015 lending standards were by far more relaxed, at least until the first half of 2017.

While there were some lending restrictions, overall credit standards were relaxed and there were no major significant restrictions, so overall it was very easy to get refinance.

So, in strong markets it is likely if some property owners were struggling they could either find a way to refinance or sell for a profit – and often a very nice one.

A quick head’s up for anyone that’s in the market for a BTL Mortgage!

Property Master is a FREE online buy-to-let specialist mortgage brokers, who typically save borrowers £1,800 (based on current annual outgoings per property).

Get results in 10 minutes!

Fast BTL Mortgage Quotes

I first across Property Master a couple of months ago, when I received a promotional email from LandlordZone.

Normally, my eyes glaze over junk promotional emails of similar nature, but for some reason or another – perhaps my corpse was low on caffeine and having a slow day – the catchy headlines managed to snatch my attention milliseconds before I hit the “delete” button.

Yup, the flashing lights got me (just as they intended): “You won’t get quotes this precise anywhere else – faster and better than a broker.

Ok, so you managed to grab my interest. What else you got for me?

The perks of Property Master’s BTL mortgage brokerage service:

According to their sales spiel…

  • Free unbiased scan of 2000+ live deals (many of which are not available for direct application to the lender)
  • No need to speak with a broker
  • Fast results in 10 minutes
  • Typical saving of £1,800 based on current annual outgoings per property
  • Expert support always on hand
  • Lender criteria updated daily
  • 5 Star Trust Pilot Reviews (9.5 TrustScore at the time of writing this blog post)

If you’re interested (or want to find out more)…

Start your BTL Mortgage Search →

Or, if you want to know more…

Online BTL mortgage broker Vs Local high-street mortgage broker

You mean, besides from the fact it’s a butt-ton more convenient and quicker to use an online broker? I honestly can’t think of any other notable difference. At least, nothing that affects the quality of the end product (i.e. the mortgage). That’s pretty much the basis of why I’m sharing this service, because it’s a quick and easy way of accessing quotes from a specialist BTL mortgage broker.

I appreciate the fact that a lot of folk are old-school, so they like the physical interaction of dealing with someone. Old-school habits die hard, I get it. No judgement from me.

I, on the other hand, am the type of fellow that orders bog-roll off Amazon because of the convenience factor, so using an online broker to establish a few quotes is a no-brainer for me.

However, something to bear in mind when dealing with any mortgage broker, whether it be a local high-street broker or an online one, is that they generally don’t have access to the same deals. So, that means not all brokers will show you the same mortgage deals available. Some brokers will have access to more and/or better products than others.

Property Masters say they have access to 2000+ live BTL mortgage deals, which ain’t bad at all.

One last important factor to bear in mind is that not all mortgage brokers are free. So before you decide to work with one, get clarity on their fees!

More about Property Master & their BTL mortgage service

Up until I got suckered into the promo email from LandlordZone, I had never heard of Property Master. But then again, I really couldn’t name any other online mortgage broker, so my ignorance means absolutely nothing, other than the fact I’m not a mortgage broker boffin.

However, the fact that LandlordZone – a reputable landlord… err… zone – were promoting them, I already came to the conclusion they were legit. Of course, that didn’t stop me from undertaking my own due diligence.

As already mentioned, they’ve accumulated some raving reviews on TrustPilot. Beyond that, there’s a lot of guff about the company on the SEEDRS website, where they successfully crowd-funded £286,983.

But since the job of a legitimate broker is to simply provide a selection of products to choose from, there’s typically very little danger. In the worst case scenario, they won’t connect you with the most competitive BTL mortgage.

In the past, I’ve just scoured through the usual suspects for mortgage deals, including my local high-street banks and building societies and the obvious comparison websites. But next time, I’ll definitely give Property Master a spin as an addition. Operative word being “addition”

Get your BTL Mortgage Quote →

If anyone decides to get any quotes off them, please let me know the outcome, good or bad…

Perhaps you’ve made the decision become a buy-to-let landlord. You’ve done all your homework and you’re now the proud owner of a rental property. On the other hand, perhaps you’ve been a landlord for many years and there’s little you don’t know about effectively managing each new tenancy.

Continue Reading…

HMO Tenancy Agreements

There’s nothing fancy or different about creating a tenancy with a HMO (Houses in multiple occupation) tenant – the legal agreement between you and your tenants should be an Assured Shorthold Tenancy (AST), just like if you were letting a property to a single family (i.e. a single let).

AST’s are the most common form of arrangement between private residential landlords and tenants – including HMO tenants – in the UK.

Page contents:

Introduction to HMO Shorthold Tenancy Agreements

I’ve already discussed Assured Shorthold Tenancy Agreements in depth, and everything in there – including the best practices, rules and legislations governed by the relevant Housing Act(s) – will apply to HMO tenancy agreements, including:

However, while I’ve been through much of the details already, there are a few specific points I want to highlight and cover in regards to creating an ASTs for HMO’s, which typically aren’t as relevant for regular single let situations:

You probably won’t have an AST if…

  • you share the accommodating with your tenants. In this case, your tenants are most likely lodgers, and you shouldn’t use an AST, because a lodger agreement comes with a whole different set of more lenient rules and legislations.
  • you charge more than £100,000 a year for rent. While this will be unlikely for most landlords, I wouldn’t be surprised if some HMOs exceed the threshold.

To check what kind of tenancy you have (if you’re unsure), you can use this nifty little tool by Shelter.

HMO tenants and utility bills

As mentioned, the tenancy agreement should stipulate who is responsible for what bills e.g. electricity, gas, council tax etc. Generally speaking, in shared accommodation situations, the landlord takes care of all the bills – especially if each room has a separate AST (more details in the section below) – and takes that into consideration when setting the rent. From my experience, most HMO tenants and landlords prefer that. It’s, of course, the most simple way of handling bills.

It is possible to assign one ‘responsible’ tenant to be in charge of all the bills, which means he/she will have to collect the money from the other tenants and then make payment. But this option is less desirable for a couple of reasons:

  • if the assigned tenant decides to leave, someone else will need to be assigned, which isn’t always an easy process
  • it can be the root cause of tension between tenants:
    • If a tenant refuses to pay, or frequently pays late
    • It’s difficult to measure exactly how much of the utilities is used by each tenant, so if one tenant feels they use less electricity, for example, they may begrudge paying an equal share once having seen the bill total.
  • Landlords often charge a little extra for covering the bills, so they make more money from it.

HMO tenancies can be Joint or Sole/Separate

There are generally two common ways of implementing tenancy agreements for an HMO property: by using individual contracts for each tenant, or using a single ‘joint and severally liable’ agreement.

The tenancy agreement’s terms and conditions should state whether the tenancy is a Sole or Joint agreement:

  • Joint tenancies: this is a common arrangement for student properties, or a HMO comprised of friends moving in together, and work best if the tenants know one another and are likely to move in and leave at the same time.

    The tenants are jointly liable for both the rent and the care of the property; responsibilities are shared between tenants (like a single let arrangement, where the lead tenants, as stipulated in the tenancy agreement, are responsible). For example, if one tenant doesn’t pay rent, then the other tenants will be required to cover the shortfall. Also, usually the remaining tenants are responsible for finding a tenant(s) if a room becomes available.

    By nature, a joint tenancy requires less administration, as there is one overall agreement with one single rent payable (and one deposit to protect, should you decide to take a deposit).

    All tenants names should be on one tenancy agreement in this case.

  • Sole/Separate tenancies: HMOs comprised of adults, who usually don’t know one another and don’t want to assume responsibility for other tenants, are usually issued separate (Sole) AST’s for each room.

    Each tenant is responsible for them self i.e. they pay their own rent, and the behaviour of other tenants does not affect their tenancy. For example, if one tenant does not pay rent, or has fallen into arrears, the remaining tenants are not required to cover the shortfall.

    This requires more admin work as each room should have their own individual tenancy agreement, and each and every deposit should be individually protected when one is taken.

    As briefly mentioned above – in the utility bills sections – if there is a separate AST per room, it usually means the landlord will be liable for council tax and utility bills (it just makes more sense that way, practically speaking).

HMO Tenancy Agreement Contracts/Forms

There’s certainly no short supply of tenancy agreement contracts around the web (a swift Google’ing session will attest to that), many available for free download, which I understand can be an extremely compelling proposition.

My first word of warning is to use a reliable outlet, and use a contract that is specifically for HMO’s that meets the demands of your setup. While, in almost all cases, HMO tenants are given an AST – most AST contracts available from stationers and online are intended for Single let situations. Do NOT use those for HMOs as they won’t be suitable.

My second word of warning is not to butcher existing tenancy agreements by adding and modifying clauses to meet your specific set of circumstances. It’s something many landlords have done only to regret shortly after. You could end up in a legal bind if any of the additional clauses were to be challenged and they weren’t drafted properly, or aren’t legally enforceable in the first place.

The best thing to do is contact a specialist landlord law solicitor, and get them to draft a contract specifically for your HMO. Yup, it may cost a couple of hundred quid, but it’s definitely a sound investment if you’re serious about doing HMOs right.

For a moment I considered this blog post to be poorly timed since it’s the season to be jolly, and the last thing I want to do is kill the mood. Merry Christmas everyone.

But then. I changed my mind. Perhaps the deeper-thinkers will appreciate the profound irony of discussing death during the time many celebrate the birth of baby Jesus! The circle of life.

My reluctant need to organise a Will & Testament

So, even though I’m in my early 20’s early 30’s, which by all intents and purposes is young for an impeccably healthy individual (minus a dodgy finger, but more on that shortly) to be fluttering around the idea of death, it does seem like the sensible move considering I do own appreciating ‘assets’, and even the optimist in me isn’t deluded enough to deny the possibility of tripping over my obscenely gigantic pecker and knocking my lights out. What a way to go.

From what I understand, the Grim Reaper does not discriminate and has no conception of time. Regardless of age, race, gender, faith, or penis size – and even if your faith allows you to be reborn as a cactus – one thing is for sure, when it happens we won’t be carrying over the junk we’ve accumulated in this life to the next.

As amusing as it would be to do a disappearing act before creating a blueprint of how I want my assets distributed, so I can appear down on the self-appointed beneficiaries squabble over my life’s work, I think it will probably do more harm than good, especially since ‘the law’ gets to dictate who gets what if I don’t do it myself. Yeah, fuck that.

However, even while fully understanding and respecting the reality of uncompromising death, I’ve always been reluctant to plan for it. Planning for it feels like bad karma, and almost like I’d be jinxing myself into an early grave. But putting the Voodoo crap aside, I’ve also been too lazy to get it sorted; arranging a meeting with a will expert/solicitor and leaving the comfort of my parents’ basement always felt terribly overwhelming. That said, apparently I’m not alone, because I’m told seven out of ten landlords don’t prepare Wills and a whooping 97% of Brits don’t have a will or have one that’s outdated, which is thoroughly comforting. Communal failure is so much easier to accept, ain’t it?

Long story short, for the past few years I’ve been prioritising everything else before thinking about what happens ‘after’.

Why I suddenly decided to get my will sorted…

Part A

One of my mate’s is ‘one of those’ Marketing guys; he exclusively deals with digital companies, and promises them the world:

TRUST ME, I’ll get you a thousand new customers by sunlight. You’ll be retired on a yacht by next year! Picture yourself swimming in money and tits… Can you see it? Can you feel it? That’s my promise to you!

YES, YES, YES!!!

Hook line and sinker.

A couple of weeks ago he was informing me about a new client he had reeled in, Farewill, and they, lo and behold, allow you to create ‘professional’ Wills online for £90.

For the first time [for totally selfish reasons], I found myself interested in his work. I didn’t really consider the grand possibility of creating a will online (not to be confused with generic downloadable templates) while remaining glued to my seat by the congealed remains of kebab grease and cheese-puff residue, but I’m not terribly surprised it’s possible considering I order toothpaste and toilet roll off Amazon.

Apparently a ‘typical lawyer’ charges a ‘one time’ fee of anywhere between £200 – £500 for a similar service, plus, however much you value the inconvenience of leaving your home to fulfil a rewardless ‘chore’.

My interest has been perked.

Part B

Perhaps this is how I was finally convinced.

Dislocated finger

My near death experience (genuine pic).

Ok, so now, back onto my mutilated pinky.

Before you all FREAK OUT, I’m fine.

Well, actually, let’s just say I survived. I might technically be ‘fine’ after PTSD counselling.

Last week I had a near-death experience when I stubbed my beautiful little finger on a basketball during a friendly game, which caused it to buckle and dislocate. The experience profoundly made me realise how fragile I am life is. And wonderful. I had two nurses yank my bone back into place.

Life is so precious, isn’t it?

I hate to be a cliché cheeseball, but I’ve discovered a new found respect for life.

If my recent toe-curling and heart-breaking experience wasn’t a utterly terrifying reminder of how we are all vulnerable – even those in peak physical condition – then I don’t know what is. I mean, just look at my pinky (if you don’t mind looking at a war-torn severed body, that is)!!!

My poor finger is a bloody catastrophe. Your prayers would be appreciated.

So, two very telling events all pointing in the same direction…

Will and Testament sorted

After years of side-stepping and procrastinating, I finally did it. I don’t know what all the fuss was about…

Approximately an hour ago I jumped onto the Farewill website and sorted out my Will. It was pretty effortless. Actually, it almost felt too effortless considering the magnitude of death, but I’ve been assured it’s legit. But then again, technically you can write your own will on your own ass, and stuff it into a shoebox and slide it under your bed until it’s required. As long as it’s signed and witnessed, that’s one legally binding ass.

Disclaimer: Wills are legal documents, and as small errors can cause big problems, it’s preferable to have someone legally qualified draft it for you. Even if it’s on your flesh.

Why am I sharing this?

A lot of my ‘financial assets’ is accounted for by my BTL properties (but not exclusively), and I imagine that’s the case for many of you slumlords also. We all need to eventually decide who we want to curse with our bullshit BTL’s.

In all seriousness, I don’t know if I would laugh or cry if I inherited a BTL. It’s like donating a pair of jeans that’s filled with skid-marks to the homeless.

Anyways, I’m assuming many of you are uglier and older than me, so you’ve probably already made suitable reservations. But for everyone else, which includes the seven out of ten landlords that statistically hasn’t got round to it (for whatever reason), maybe this is the ticket you’ve been waiting for, so I thought I’d share my thoughts on using Farewill’s online will service.

More about FareWill (and other online will companies)

A few points that I’d like to share, just in case you happen to be intrigued…

  • Online will companies: I did come across a few online will companies after a few quick Google searches, so I don’t want you to think I’m veering you into one dirty little corner. So go ahead, shop around if you’re interested. But in all honesty, Farewill looked the best to me.
  • Will sample: here’s a sample Will from FareWill.
  • Cost: Farewill’s pricing structure: “Your professional will for £90 (or £135 for a couple). Updatable anytime for £10/year.”

    “£10/year” updateable fee”.. errr..? Exactly! It confused the crap out of me also, so I did some investigating.

    After creating and paying for your will, they automatically sign you into an annual subscription of £10 per year, which permits you to make as many updates as you need. You can cancel any time (easily via your personal control panel), but then you’ll have to pay the amount again if you wish to make changes in the future. Your first year of updates is free, so diarise if you want to cancel before the subscription fees kick in.

    The update subscription does make sense for those with frequently changing circumstances, for example, anyone that’s growing their property portfolio and/or often transferring money into different banks/savings accounts to benefit from better rates.

    Anyways, I paid the £90 for a single will (I didn’t get any special rate from my bone-head friend even though he does their marketing, which is something I kept in mind while cobbling together my will. He’ll get the jeans I mentioned earlier).

  • Time taken: On the tin it says it takes about 15mins. They’re not lying.
  • Interface: This is what I really liked about Farewill- they’ve made it so incredibly easy to create a will. I’m not exaggerating when I say that even if you’re the type of person that farts on demand and scratches your balls with a fork, you should still have the mental capacity to follow the process.
  • Process:
    • 1. Fill in your personal details.
    • 2. Fill in details of those you want to inherit your state (money, property and anything else you wish to specifically allocate)
      FareWill
    • 3. Define how you want the estate to be split (by percent).
    • 4. Define what happens in the event of your beneficiaries dying before you.
    • 5. Define Executors of the Will.
    • 6. Define your ‘Financial Assets’. Interestingly, they didn’t have a real estate/property option, so threw my properties under “other” and listed the addresses.
    • 7. Check details.
    • 8. Pay £90 for a single will (or £135 for a couple).
    • 9. Wait for confirmation email from Farewill stipulating that everything is in order with your will (every will is double-checked by one of their experts). Sidenote, my confirmation email landed up in my spam/junk folder.
    • 10. Print the will and get it signed & witnessed.
  • Support / Expert advice: They have live chat and phone support, but I didn’t take advantage.
  • TrustPilot: I’m a TrustPilot fiend! Even if I was looking for someone to wipe my cat’s ass, I’d hunt down TrustPilot reviews to ensure I was using someone that deploys the best and most gentle techniques! At the time of writing this blog post, FareWill have a rating of 9.6 /10, which ain’t bad by anyone’s standards. Check it.
  • Solicitor / Financial advisers: When I was explaining this online will gig to a [well-off] friend, he said that he liked creating his will with his specialist Solicitor face-to-face, because he was advised to reconsider certain choices after being explained legal technicalities. I guess that’s the trade-off.

    However, I took a few things into consideration while choosing to go down the online route. Firstly, my circumstances are bog-standard; there’s nothing obscure or hairy about it. If I had a more complicated situation (i.e. complicated estate, kids from another marriage, manipulative blood-sucking ex-wife, a bastard son that I wanted to compensate etc.), I may have thrown on a suit and reluctantly sailed down the face-to-face Solicitor route.

    Secondly, I haven’t ruled out the fact that this will may end up being a “for now” and “better than nothing” solution. If my situation changes I may end up groveling to a snotty solicitor so I can be properly advised through each asset (and pay through the ass for it, I’m sure).

    To quote FareWill’s FAQ page,

    Wills aren’t actually too complex it turns out, so it baffles us that they usually cost so much. We keep things simple and to a high standard, so £90 it is.

    I like it.

  • Inheritance tax: Yeah, you see, I just don’t know about how any of that works, and this is where colluding with a tax specialist may help at some point. Ultimately, I don’t want to burden anyone with tax bills, but I’m not sure I should be overly concerned since my beneficiaries will be getting a house or two for fuck-all.

    However, what I do know is that the law demands 40% tax on any assets worth over £325,000 that you leave, so those valuable houses could cost your beneficiaries a small fortune. One way to reduce or completely avoid the burden of inheritance tax is by giving your assets away before you die (it works on a sliding scale, between 3- 7 years). More details on the GOV website.

    In any case, the tax implications is an issue for another rainy day. Maybe decade.

If anyone’s interested, here’s a link to Farewill (which I promised my mate I’d share in an obnoxious fashion)…

Check out Farewill →

What happens if you don’t leave a will?

Oddly, I only looked into this AFTER I wrote mine. What a baffoon! I ‘spose anyone with half a brain would have done the research first (even though it wouldn’t have changed the outcome). In any case, here are the basics:

Dying without a valid will is called ‘intestacy’. Intestacy law is different in England, Wales, Scotland and Northern Ireland, but there are some common rules:

  • Any Inheritance Tax that your estate/beneficiaries has to pay might be higher.
  • If you die with no living close relatives, your estate will be passed to the Crown. This law is known as ‘bona vacantia’.
  • If you’re not married and not in a civil partnership, your partner is not legally entitled to anything when you die.
  • If you have children or grandchildren, how much they are legally entitled to will depend on where you live in the UK. But if you make will, you can decide how much they each individually get.

Source: moneyadviceservice.org.uk

To round off, if anyone does want to know more about wills, probate and inheritance, a good starting point is the Gov website.

Right, that’s me done.

If anyone decides to use Farewill or any other online will solution, please share your thoughts/experience!

Merry Christmas and seasons greetings everyone!!! Hope you all have an awesome break! See ya’ next ‘ear xoxo

P.s. I hope none of you die! Ever!

Another scary headline in the news this week: Nearly one million mortgage holders experiencing “mortgage stress”

But when you read more into the stats, things aren’t nearly as bad as they may seem. Mortgage Stress

Over the last 12 months there has been a decrease in the estimated number of mortgage holders considered to be ‘At Risk’  and those ‘Extremely at Risk’ .

New research from Roy Morgan using a formula that takes into account household income, costs, and mortgage repayments classifies 20.8% (949,000) of mortgage holders as in ‘mortgage stress’.

Despite this being a marginal improvement from 12 months ago when it was 21.3% (974,000), the current level remains high and would present difficulties if there were an increase in mortgage rates an increase in costs or an increase in unemployment.

But here’s what most commentators are forgetting…

With the economy being sluggish, property values falling, minimal or no wage growth and a federal election around the corner, there is no reason for the RBA to raise interest rates in the near future, or in fact in the medium term.  

1-percent

And as for rising unemployment, we’re creating more jobs then we ever have – so that should be an issue leading to mortgage stress.

Clearly a number of households have extended themselves  financially, but there are very few households in mortgage arrears – which is different from the above definition of stress.

The main location experiencing mortgage arrears is regional Western Australia – remember those old mining towns?

But when you read about Mortgage Stress that’s different thing to not being able to pay your mortgage, it’s a reflection of the percentage of your income required to pay your  mortgage payments.  but we know Australians will do anything to hang onto their home –  they would rather eat dog food than give their home’s back to the bank.

Decrease in ‘At Risk’ and ‘Extremely at Risk’ mortgage holders

Roy Morgan report that over the last 12 months there has been a decrease in the estimated number of mortgage holders considered to be ‘At Risk’  and those ‘Extremely at Risk’ .

In the three months to August 2017, 21.3% of mortgage holders were ‘At Risk’ (974,000), this has decreased to 20.8% (949,000) in August 2018.

Over the same period the proportion that were ‘Extremely at Risk’ also decreased from 14.9% (658,000) to 13.5% (596,000), a very significant drop of 62,000 or 9.4%.

Mortgage Stress – Owner Occupied Mortgage Holders

Source: Roy Morgan Single Source (Australia), 3 months to August 2017, n = 12,778 and 3 months to August 2018, n = 12,914. Base: Australians 14+ with owner occupied home loan, 3 months to August 2017, n = 2,690 and 3 months to August 2018, n = 2,541.

Mortgage risk higher in Sydney and Western Australia

Analysing mortgage stress across Australia shows levels of mortgage stress vary extraordinarily across Australia with higher levels of ‘At Risk’ areas including Sydney residents (26.4%) and those in Western Australia (23.8%) above the overall market average of 20.8%.

Norman Morris, Industry Communications Director, Roy Morgan Research says:

“Our research shows that although fewer people have a home loan compared to 12 months ago, the average balance of their loans hasn’t declined. This indicates that loans aren’t being paid off quickly, potentially as a result of low interest rates and the use of redraw facilities to use funds for other purposes. Emotional Stress, Bankruptcy, Finance.

“The decline in the level of mortgage stress over the last 12 months is due to a marginal increase in the after tax household income as a result of reduced tax rates and a small reduction in the average standard variable rate from the RBA.

“With the potential for a number of major events to impact mortgage stress levels, such as the Finance Royal Commission, interest rates and declining home prices, the future direction of mortgage stress has considerable uncertainty.

“When rates eventually rise, existing mortgage holders who have borrowed in a low interest rate environment are likely to face increased levels of mortgage stress. The final impact however will also be determined by what happens to household incomes, which are currently showing very modest growth.

“To understand more about mortgages in the full context of household finances, ask Roy Morgan.”

Summer has truly been in full swing this year, with record-breaking weather and a heatwave to rival 1976. With such extreme temperatures seen this year so far (who remembers the Beast from the East?), seasonal maintenance is essential for landlords.

Specialist Landlord Insurance provider Just Landlords understands how important it is for property owners to fix small issues now, to prevent them becoming bigger – and more expensive – problems in the future.

During this rather parched summer, Just Landlords has highlighted the seasonal maintenance tasks that all investors should aim to complete before the cold weather hits us once more. By ticking off these jobs, your property will be in the best position possible to deal with the difficulties that both autumn and winter can pose.

Conduct a periodic inspection

The very first thing you should do this summer, if you haven’t already, is to undertake another periodic inspection of your property. These visits should be made every quarter for new tenancies, or bi-annually for those you feel confident in.

After you have arranged a suitable time to meet your tenants at the property, make sure to check the conditions against the initial inventory report. This highlights any changes that either you or your tenants must make. Then, make sure you ask your tenants if they’ve noticed anything that needs dealing with; they may not want to email you about such issues, but feel they can raise them in person.

After making these checks, finish up with an inspection report that details what you and your tenant must complete before your next visit. This sets out your expectations as a landlord and informs the tenant of your commitment to maintaining the property.

Please note: If you use a reputable letting agent, they will typically complete these checks for you and provide you with a comprehensive report afterwards.

 

Look out for damage caused by hot weather

We usually think of winter being the devil that destroys our homes, but summer can be equally as devastating on a property, especially with the sky-high temperatures we’ve recently experienced. On your property visits, it’s wise to take extra care in looking out for damage caused by these extreme conditions.

Cases of subsidence, for example, are known to increase during hot, dry weather. This can drastically affect the state of your property, as it causes the foundations of the home to become unstable. Look out for new cracks in the walls, particularly around weak spots (doors and windows) or an extension.

At the same time, make sure that your landlord insurance covers you for subsidence, as its effects can be long-term.

 

Set your expectations for the garden

The garden, too, may be another area that has suffered at the hands of the sun in recent weeks. While it may just be a case of waiting for the rain to bring it back to life, your tenants must understand their responsibilities relating to gardening.

In your inspection report, make sure to include a section on the garden, stating the condition it is in and how it must be maintained before winter. It is essential that the grass, plants and shrubs are cut back before the cold weather arrives, to keep it looking clear and tidy.

An overgrown garden can invite unwanted pests to your premises, as well as making it difficult to get the property back to a lettable condition when your tenants move out. Inform them that you will be checking the state of the outside space on your next inspection.

 

Look at windows and doors

The summer provides a fantastic opportunity to do some work on the outside of your property, especially if your tenants are going on holiday and the home is empty. Two of the most prominent areas to focus on are the windows and doors.

You must ensure that they all open and close properly, while inspecting the window putty on the outside of glass panes. It’s also a good idea to apply lubricating oil to hinges and replace any draught excluders that are worn out.

You may need to get a contractor in to complete some repairs, such as removing rotten wood, but this will be worth it in the long-run, as your property will be in the best condition possible to weather the winter storm.

 

Check your roof and chimney

If you’re not comfortable with heights, you may also need to hire a contractor to complete a thorough check of your roof and chimney. Again, summer is the perfect time to conduct this work.

A good tradesperson will clean any leaves or debris from the area and check for signs of cracking or leakage around roof flashings. You should also have any loose or fallen tiles replaced or fixed more firmly, to keep the roof strong over the winter.

Sorting out these minor issues will prevent larger problems forming during the cold weather, so it’s worth arranging this work sooner, rather than later.

Take the opportunities that this summer is giving you to get outside and complete these seasonal maintenance tasks on your property – your tenants will definitely thank you, and so will your finances over the long-term!

Hole in Wall & Blistering

Hello everyone 🙂

So, this is a tad risky.

There’s a terribly good chance my tenant is in the process of Googling his rights in order to build a defence for the D.I.Y disaster we’re currently grappling with, so the buffoon may just Google the relative keywords and land up on this page, and then put two and two together- realising he’s been thrown under the spotlight, and he’s the buffoon I’m actually referring to.

I sincerely hope that’s not how this all unravels, but if it does… GET OVER YOURSELF, I COULD BE TALKING ABOUT ANYONE! Why do you make everything about you?!?

The tale of… the weird shit on the walls!

*Ring* *Ring* *Ring* *Ring*

Urgh! Bollocks! It’s my tenant (who I’m going to refer to as Travis for today). My stomach starts to sink…

Should I? Shouldn’t? I shouldn’t!

I, reluctantly, do…

Hi Travis, what’s up? [please don’t ruin my day]

Hi Landlord, there’s something wron…

*Day ruined*

…g with the walls

WHAT? What do you mean? What’s wrong with the walls?

Initial thoughts? I hope that whatever shit he’s done, please don’t let it be as stupid as I’m imagining right now.

I painted the walls and now there are bubbles everywhere. It looks like the house is suffering from a chicken-pox epidemic, and so far the causalities are the hallway and two of the bedrooms!

It’s officially stupider.

Hmm… strange. It sounds like the walls weren’t properly prepared. Who painted the walls?”

My dad’s friend, he’s a professional painter and decorator, so everything was done properly. He thinks it’s the actual walls that is causing the problem.

I don’t know him, but I hate him with a passion. Your dad, too.

Okay. I’ll pop by tomorrow to see it with my own petrified peepers.

*Knock* *Knock* *Knock* *Knock*

Hi Travis. Ok, let’s see the dam-ag…OOOOH, fuck me sideways and call me Sally! That looks worse than the acne on your mum’s face [and the colour you have chosen is bloody awful, you tasteless goofball].

Here’s an example of what I’m talking about (not an actual pic from the scene of the crime):

Blistering/bubbling walls

Bubbling walls

Imagine that crap smothering the hallway and two of the bedrooms 🙁

My friend’s dad said there is something wrong with the lining on the walls.

I doubt it, because the walls don’t have any lining [this “professional” of yours… don’t ‘spose you found him in a dumpster?]…

*silence*

Are you sure it’s not due to the [shit] paint you used? Or [manky] paint rollers? Or something related to the preparation (or lack there of)? Or perhaps, limited ventilation after applying the paint? I’ve painted this entire house 3 times, top-to-bottom, side-to-side, hip-to-torso, ass-to-toe, and the walls have never contracted this weird anal-disease I see before me.

I used good quality paint. My dad’s mate (‘the pro’) said it was either the lining [which doesn’t exist] or a dampness issue.

*I touch and sniff the wall*

Err… there doesn’t seem to be any dampness. In any case, the walls were fine before you painted them, right?

Yes, they were.

For the lack of better words… Fuckity-fuck!!

At least with something like a broken toilet you largely know what you’re dealing with, but bubbling walls (also known as ‘blistering’), it’s just… I don’t know… messy.

What’s more annoying is that I had the entire house freshly painted before the turnip moved in. Why do people have to disrupt neutral colours?

The whole ‘making a property into a home’ malarkey is just a recipe for disaster when it’s more than psychological conditioning i.e. just allowing your body and mind adapt to the new environment.

Who’s responsible for this D.I.Y disaster?

Firstly, before anyone crawls into my dazzling afro and gets uppity about the superficial disdain I’m showing towards my shit-for-brains tenant, I just want to say that I like my tenant. He’s a good guy; I’ve never had any issues with him. And I still don’t. Whatever sickness is man-handling the walls is just ‘one of those things‘, albeit a highly unwanted and irritable little booger (which I’m confident my tenant is responsible for, and the reason for why my life is currently ruined). But despite my dramatised prima donna dialogue, I don’t really blame my tenant, entirely.

100 x *deep breathes*

Secondly, it wasn’t difficult to detect the fact the work wasn’t done by a professional. The remains of the workmanship (if you can call it that) could have only been left behind by someone superbly under qualified; patchy application of paint and clumsy spillages on the skirting boards, just to name a few of the tell-tale signs. Not to mention the shambolic misdiagnosis of the problem. In fact, I wouldn’t be surprised if I was looking at the result of the local nursery’s half-term art project.

My unprofessional diagnosis? When I walked into the house, the one thing that hit me like a tonne of vegetarian farts was a man-made heatwave. The house was heated up like an iguana tank. I suspect Travis, the buffoon, had painted the walls and allowed them to dry in his Mediterranean sweatbox, and that’s what caused the blistering. Or at least, it was one of the contributing variables. The heat certainly couldn’t have helped matters.

In any case, from my point of view, which I also believe is supported by law, is that my tenant is obligated to:

  • Repair or pay for any damage caused by them, their family or friends
  • Return the property in the same condition as it was received (minus wear and tear)

With that in mind, I’m inclined to believe that it’s my tenant’s responsibility to pulverise those ghastly boils into an oblivion, and not mine. I did articulate my position to Travis, and judging by his response, I think he felt his choices were limited. (IF YOU’RE READING THIS TRAVIS, THEY ARE LIMITED! So stop researching for escape routes!)

But that didn’t stop him from taking one last swipe before toppling over; he made the point that the problem could have been with the coat of paint which he painted over. Reluctant as I am to believe that steaming bullshit- sure, it could have been. But I highly doubted it.

I admired Madam’s fighting spirit nonetheless. Either way, his fearless efforts didn’t negate the fact that the property didn’t come infected with diseased walls, and the problem was given birth to after his intereference.

Sidenote: please God!! I sincerely hope I don’t get swamped by ‘Painting & Decorating’ boffins with erections, foaming around the mouth, ready to give me a full blown analysis on what caused the bubbles. I honestly don’t think I can take that!

Very interesting fact: the last time I talked about penises/erections in one of my blog posts, a very disgruntled reader unsubscribed from my blog, with the following comment, “stupid use of the word pecker and penis in the last blog – not necessary – goodbye”

I’m not too fond of losing subscribers, but I thought that was hilarious. Oh, and speaking of which, if you haven’t already subscribed to my newsletter, and you’re the type of person that wouldn’t mind receiving occasional reading material on landlord stuff and peckers- both flaccid and stiff- then feel free to sign up.

Anyways…

The reality is, Travis and I could have played the pointing game and surrendered to our primal instincts by slinging our own faeces at one another all day long. We could have even conducted some tests to determine where the truth lies. But it all seemed like a terrible waste of time. I just wanted to amicably resolve the problem as quickly as possible so I could return to picking my nose and procrastinating, and fortunately Travis felt the same.

I genuinely hate prolonging repairs, especially when they’re inevitable. I also feel uneasy knowing that my tenants are living in an environment which makes them feel uncomfortable, because that makes me feel iffy.

Resolving the problem

I feel it would have been effortless to stand firm and simply demand the old boy to shut his pie-hole and resolve the problem himself. The beauty with that game plan is that I’m not sure he would have had any recall (for the reasons mentioned). I’m also confident that many of the less wimpy hard-nosed landlords would have chosen that path. No judgement from me, I’m just saying.

Ultimately, I believe Travis was responsible for repairing the walls, so if he had refused responsibility, I would have felt comfortable deducting the costs from his deposit without facing too many problems. However, I took the following into consideration:

  • He’s a good tenant; he pays rent on time, he’s courteous, and generally doesn’t climb up my ass and cause a commotion.
  • I’d like to keep him as a long-term tenant.
  • The potential cost of throwing salt over the situation (which is trivial in the grand scheme of things), probably wouldn’t have been worth it.
  • It’s easy to build a defence from both sides, even if one case was remarkably more floppy than the other. But, it wasn’t a black and white scenario, like fist holes through the walls.
  • I’m a team player, so I prefer working together to resolve problems.
  • I’m a nice chap 🙂 Yes, really.

That was enough for me to be compromising, or at least, not utilise the full force I felt I had available at my disposal.

I ended up getting a few quotes from local handymen to determine how much it would be cost to remedy the widespread infection, because I’d be damned if I left it in the incapable hands of the local nursery and their stupid initiative arty-farty schemes again.

The general consensus was that the walls needed scraping and sanding down, cleaned with sugar soap, and then primed with latex, before a new coat could be applied. (Also, it was *most likely* my tenant’s fault).

Yup, a real slog of a job.

After gathering the quotes, I approached Travis with what I felt to be a fair proposition, which was to handle it like a modern day date: to split the bill. At least that way no one walks away feeling like they should have got laid after paying for both covers. A feeling I never wish to experience again.

Travis seemed happy to proceed (probably because he conceded to the fact that he’s lucky he didn’t have to foot the entire bill), and more importantly, I feel like we managed to keep our healthy and flourishing relationship intact. Although, I wouldn’t be entirely surprised if the Devil on his shoulder convinces him to feel like an underappreciated employee, and consequently piss in the kitchen sink from now on, and steal the bog-roll holder on the way out. Time will tell.

Final word on the matter

I guess, if my experience highlights one thing – other than the fact my doofus tenant is a liability – it’s that it’s always worth looking beyond the legal rights, because there are usually other practical factors in play that are more important.

From my point of view, the law rarely equates to ‘fair’ (regardless of which side you stand), and some times it’s wiser to be fair compared to getting away with what you can, legally speaking. But then again, I wouldn’t be entirely surprised if some of you ghastly rascals find my route to resolution completely absurd, and perhaps unfair.

Of course, each situation should be assessed by its own set of circumstances; some times it’s perfectly reasonable to make the tenant pay through their eyeballs to cover the cost of their own bumbling stupidity, and other times it’s just cool to work together.

What would you have done?

I’m hoping to open the comical floodgates with my next question: have you got any decorating disasters worth sharing? If so, what happened and how did you deal with it?

Love & Peace ya’ll xoxo

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