Interview With The Landlord From Property Investment Project

We’ve recently started reading Property Investment Project, a site for all those letting out property run by a mysterious individual known only as The Landlord. The Landlord is a twenty-something property investor who charts his progress in the property market, the ups and downs of landlording, and the things about his tenants that really make a landlord mad. We were lucky enough to talk to The Landlord on Twitter and he agreed to be interviewed for Bethemiddleman.com

The Interview

Q) Firstly, a bit of background – how long have you been a landlord and how did you get into it?

TL) Hmm…4 or 5 years, I think. It’s all a bit of a blur. Not because I’m always high or under the influence of alcohol, but because I generally have a dire memory.

I was inspired by my sister’s ex b/f. I met him when I was 15; he was in his early 20’s and he had already developed a respectable BTL portfolio. This was way before the boom; this guy obviously had his lights switched on. After having various conversations with him, I was hooked on the idea of being a landlord. I liked the idea of planting a seed, and watching it blossom with money leaves. Effectively, that’s all BTL is if you do it correctly and wait long enough, right?
 
Q) Are you a full-time landlord, or is it a side project?

TL) I’m definitely not a full-time landlord – even though I probably could be if I wanted to. But that would involve a lot of being idle – and that’s just not me. What do full-time landlords even do with their time when they’re not counting pennies? I’ve always wondered.

Q) What do you know now, that you wish you’d known when you were starting out?
 
TL) Oh [insert profanity], I’ve had so many “if only I knew” moments in my landlording career that I should feel embarrassed. Fortunately, I’m pretty shameless and I’ve learned to lie about my mistakes.

I know so much more now than when I first started out that I don’t even know where to begin. The thing with being a landlord is that you learn so much while on the job and it’s inevitable you end up with regrets. There’s actually always one scenario which stands out in my mind, which makes me want to slap myself repeatedly…

I remember my first ever tenant was on Housing Benefit. At the time, I had no idea what a DSS tenant was, but my letting agent made the idea seem awfully appealing (as they do), so I just went with it and signed on the dotted line without doing any research.

In hindsight, I was an idiot. I paid 1k to a snake-oil letting agent to find me a dodgy DSS tenant when I could have gone directly to the council and got a DSS tenant for free *slaps forehead*

Q) Obviously the property crash has affected a lot of people and there’s been a rise in ‘accidental landlords’ as well as landlords who can’t get finance. What advice would you give to landlords who are maybe struggling with negative equity, or trying to get a good return on their investment during the downturn?
 
TL) A big part of being a successful landlord is actually about minimizing outgoings while maintaining the same level of service. It’s not all about quickly pushing tenants through the door and sitting back while waiting for the rent to roll in; it’s largely about streamlining and becoming more cost efficient, just like any other business.

Every landlord should always be looking to reduce their outgoings wherever possible, but especially in this current climate. Whether that means removing letting agents from the equation, getting several quotes before undertaking maintenance jobs, or going onto several money comparison sites for home insurance. There are always ways to save money; it’s just a matter of taking the time to do it.

Negative equity can ultimately be a short to mid term problem; the important thing is to stick in there and not panic, because eventually the market will pick up. BTL has never been about short-term success, it’s a financial investment which grows over time.

In the mean time, it’s important that homeowners realise that saving money in the bank isn’t the most efficient practise right now. Your money would be working a lot harder if it was reducing debt. Interest rates are at rock bottom, so you’ll get little return by saving.

If you have money lying around, consider reducing your mortgage. If you can afford to, consider making overpayments on your mortgage each month. Either option will not only reduce the mortgage life, but will also reduce the amount of interest paid and slowly rebuild equity. Even paying as little as £30 extra each month can make a huge difference in the long run.

There’s no real mystery coloration here; reduce outgoings where you can, and use the money saved to reduce debt.

Q) The government have taken an interest in landlords recently - soon you’ll have to sign up to a Landlord’s Register. Do you think this is a good idea, and will it have a positive effect on the landlording profession?

TL) Terrible idea. Have you ever seen the movie “Enemy of the state”? I’m one of those people that actually believe the Government are tapping every line of communication.

I don’t like the idea of the Government knowing everything about everyone. I feel it violates our civil right to be free men. I have no problem if they track female landlords, however. Only joking.

What’s most worrying is that we’ll reportedly have to pay £50 a year for this privilege. Why do the Government keep dragging in laws which ultimately have a financial cost on Landlords? First there was the Tenancy Deposit Scheme, then the EPC, and now this Landlord Register. Don’t they realise we’re going through a recession?

A similar compulsory landlord registration scheme has existed in Scotland for three years and has been shown to not work with one in four rental properties not registered. Many have already said that it seems more like a landlord tax; I can’t really argue with that.

Q) We read a lot in the press about problem tenants – do you think that landlords also need more protection? 
 
TL) Definitely. I think tenants have a lot to blame for a lot of landlords getting repossessed, and that’s primarily because the law has a harness made of cotton around tenants.

All it takes is for a tenant to fall into 2 months arrears for a landlord to fall into financial ruin. I’m all for tenant protection UNTIL they breach contract.

Unfortunately, tenants still have a lot of legal protection when they breach contract, that’s what I find unfair. If a tenant hasn’t kept to his or her end of the bargain, why should the landlord suffer? It seems ridiculous that a tenant can stop paying rent, and continue to live in the landlord’s property while the court case drags on for months. Where is the justice in that? I could ramble on all day about this issue.

Q) Finally, since Bethemiddleman.com helps landlords to let their own properties – we have to ask – do you use a letting agent or do you prefer to find your own tenants…and why?
 
TL) I used a letting agent for the first year of my landlording life. I eventually woke up and realised how extortionate they were. I wasn’t getting a bang for my buck; I was actually getting a little premature squirt.

I used to pay 12% of my annual rental return for an agent to find my tenant. That would be anywhere between £700 and £1000. I now spend about £50 on local advertising and various online portals. It’s a no-brainer as far as I’m concerned. I won’t be using a letting agent again unless the internet breaks, or something.

Post-Interview

We’d like to say a huge thanks to The Landlord for answering our questions – some good advice on the housing downturn and we love the insider’s view on the Landlord Register – do you reckon the government will take note?

Remember, The Landlord is on Twitter and Property Investment Project is updated frequently

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