In today’s world, where people can make money from something as simple as posting a photo of themselves wearing a new coat to endorsing the latest vitamin, it blows my mind that there is still the perception that ‘landlording’ is not a real job.
Nowadays, the traditional 9-5 is just one option, but lots of people also earn money from unconventional jobs, as well as a variety of side hustles. Yet despite being more hands on and time consuming than most would ever imagine, and providing people with one of life’s greatest necessities, a home, being a landlord is still largely not accepted or valued.
Landlords are providing a service which they are paid for and that they pay tax on. It may not always be a full-time job, depending on how many properties a landlord has and how much work is required to maintain them, but being a landlord is certainly a job
Someone recently wrote to me saying they were presenting to the parliamentary housing committee on behalf of landlords in Ireland. The chair of the committee asked “How many hours does a landlord work every week?”
She rightly noted that he implied landlords work very little for large returns, which pretty much sums up public perception, forgetting that landlords have mortgages, management/ maintenance and taxes to pay, not to mention the risks, legislation and now inflation.
What’s more, does anyone ever think of the endless hours of hard work that the landlord has put in to afford that property in the first place. Granted, some made smart decisions at the right time and their investment paid off. But that is not the case for a large majority, and either way, should they be penalised for that? Most landlords own one or two properties, purchased to supplement their income and/or pension.
I think what people often do not appreciate are the challenges that come with being a landlord. Not just financial aspects such as maintenance/repairs, void periods, compliance, damaged or event trashed properties and now increased mortgage rates, but also being a mediator and sometimes even a social worker.
I’m increasingly frustrated by the portrayal of private landlords. I appreciate professional, competent landlords, providing safe and secure homes for their tenants do not make for an interesting story or good viewing on television, but the heavy focus on landlord bashing is fuelling the growing resentment and tarnishing the reputation of good landlords.
By way of highlighting one particular mis-representation that landlords evict tenants in huge numbers, I’d like to point out the government-issued Ministry of Justice (MOJ) Mortgage and Landlord Possession Statistics, which refutes this idea. In actual fact, there is a long-term decreasing trend in landlord claims, orders, warrants and repossessions using the accelerated possession procedure (Section 21).
Not all landlords are bad landlords, just like not all tenants are bad tenants – and pleasing all of the people all of time just isn’t possible. Of course, landlords have a responsibility to maintain their homes to good standards and keep it in good working order, but it would seem that more and more is being put on landlords with fewer options to turn to when things go wrong.
Landlords are slowly losing the right to determine who lives under their roof and yet it is increasingly challenging to remove tenants who fail to respect their property. We know evictions are time-consuming and expensive and the court systems are not set up to handle an increased volume of cases when Section 21 is removed.
Ultimately, over the last five to ten years, the government has taken action to deter private landlords from the buy-to-let market. The ‘plan’ was to fill that void with Build to Rent schemes and the building of new houses for sale so that home ownership was more achievable. Right now, this outcome is ebbing further and further away, and yet private landlords are already at the door. People will always need somewhere to live and constant Government intervention in the sector means it is no longer worthwhile for many of the good guys. Now we have a situation where renters are ultimately the ones who will suffer.
With all this said, I’ve been in this business long enough to know that this is an ever changing, fast-paced market and the pendulum can swing back the other way at any time.
Demand for rental properties is extremely high so landlords who are able to remain in the market or have cash and wish to expand their portfolio are in a favourable position. The day of the amateur landlord is over, and this is no bad thing. The industry needed to raise standards and deter rogues. I also believe the days of landlords being able to self-manage and remain compliant are numbered, but those who approach ‘landlording’ as a job, conduct themselves professionally and do things the right way can still prosper. I hope in time we can change the perception of landlords.
So, here’s my question to you, what bit of golden nugget advice would you give a new landlord starting out?
* Paul Shamplina is founder of Landlord Action, Chief Commercial Officer at Hamilton Fraser, and is on Channel 5's "Nightmare Tenants, Slum Landlords” *
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Right on the money Paul! My whole December will be spent renovating a property after tenants of 10 years leave. I will get paid nothing for my labour and I have no say in the timing - the tenants gave 1 months notice - so I will be juggling renovation with Christmas preparation. I am not complaining - just pointing out that land lording is not just easy money.
My golden nugget to future LLs - don't bother, invest in other assets where you can avoid CGT, rogue individuals and a Govt that is set against you.
I spent 10 weeks doing exactly the same through the hot summer months, likewise I'm not complaining, there's a lot more to being a landlord than sitting down with the laptop watching the money flow into the bank account, as some out there like to think
I've have to do a great deal of work, too.
The system sees rental money as "unearned income". That is so wrong.
Labour would tax us more harshly as well on that erroneous basis. They should be supporting the workers, not the work-shy.
Same. I've just spent 7 months refurbing a run-down property, working for free, ploughing in another 30% on top of what I paid for the property. Majors works, top spec, a previously empty property now a lovely home...will I get any recognition...unlikely.
I'd have to agree with Tricia... 100%. I'd never point anyone in the direction of landlording and can't wait to get out of the game. My portfolio is in Bonnie Scotland 🏴
My advice would be the same as that of Tricia.
Also, I'd say put additional money into buying a better house for yourself. That won't produce any income, but life will be less complicated, less stressful and you won't be under constant threat of losing your assets, or a signficant part of the value of your assets, through government intervention. Also you won't be at the beck and call of tenants 24/7.
When you reach retirement age you can downsize and the money left over from the sale of your own house can be used to fund a good retirement.
RETIREMENT ! Ellie, what's that ? I'm 69 and not found out yet (not that I want to)
I understand Andrew. Some people like the interest of running a business which they have built up during their life through an enormous amount of hard work. And you should be allowed to run your business without constant threat of your assets being appropriated. Unfortunately, opportunity makes the thief.
Yes HM0 require you to provide 24 hr contact, maybe give them 101 or 999 am I getting cynical on my old age.
And that doesn't only apply to HMOs Michael
Landlords are demonised but tenants are treated as saints.
The other aspect missed off the list is how capital intensive being a Landlord is. Huge numbers of business are run with nothing like the capital base of a property business. Actually, the return on capital isn't that good for residential property compared to running a 'real' business and we don't hear of every other business being demonised on a regular basis.
Better ask the banks, they want your marketplace. Some of the developments are very high density, will be slums in a few years, but they will have unloaded them on Chinese or similar investors.
I think what people don't realise is that it's a 24 hour job. I've had tenants ring me when im on holiday and complaining neighbours call in the middle of the night. I have student tenants from overseas and they need a lot of support from picking up at the airport to how to fill in an application for a bank account. There's also the stress of finding replacement tenants. My commercial tenant left recently and finding a new tenant is time consuming and worrying. I'm taking the opportunity to undertake major safety improvements which is expensive, time consuming and won't pay back in terms of value but need to be done as a matter of conscience.
My advice would be to remember your tenants are human beings not just £££££.
They often have ideas that may be somewhat different to yours. That's not necessarily a bad thing but can make life unpredictable.
They come in multiple types so work within your comfort zone.
If you understand the benefit system and have some empathy with low income households fine. If you don't then probably stay away from that part of the market.
If you generally like students and can overlook the occasional unfortunate event consider students. If they wind you up stay away.
If your comfort zone is professional families it's a big part of the market.
HMOs are a specialist thing that are hard work to get right. Good ones are fantastic, bad ones are hell. It will usually be the compatibility of the tenants, not the quality of the building, that is the main factor in that.
If you don't want to self manage find an agent who understands your tenants are human beings not just £££££.
Of course tenants are human beings, they are also our customers, I have no problem with low income so long as it's worked for, workshy scroungers wind me up as do most students and their parents, HMOs personally not for me, working singles, couples, small families, and the retired suit me best, as you rightly say we all have our preferred groups
Paul, thanks for being our Shop Steward I have seen you about for 20 years at various venues.
I agree with most of what you say but not everything.
Landlords responsibility to do the maintenance which we always done but very difficult now that we are excluded from the property no use anyone telling me different.
Amateur Landlords haven’t you all come up in the World forgetting your roots, your so called Professionals started as amateurs with their overalls, now swapped the overalls for a suit & lap top and hey presto you are all professionals good riddance you think, think again those are the hands on landlords, show me one of your professional landlords and I guarantee he is just doing administrative computer bull sugar work. Agree LL’s don’t generally evict or haven’t been doing so in the past because they had some peace of mind knowing at the end of the day with Section 21 they could get their property back, not too much to ask is it.
Roll on Remove S 21 at your peril you have your answer already, landlords have exited in big numbers and crashed the Market even before the war.
Paul you gave up on this too soon and accept it’s going without understanding the implications or questioning why it was introduced did you not know its the very foundation of the Private Rented Sector on the other hand I don’t expect you to know you weren’t around or involved,
Many thanks 44 years a landlord well before your computers / laptop highjacking the Business, we had actual real tools back then not professional button pressers.
Jo
I've often wondered who you or what you stand for. You seem to be living in a politicians type of world, ie what you would like not what it is. Murder is common place in big cities, where do these people live ? Large council estates have been demolished, because they "aren't popular with the tenants" ie it's a sink estate trashed by lowlife.
Paul, since when have Lloyds Bank, Barclays Bank, John Lewis everbeen PRS landlords ? They are the amateurs, but they will be expiothdrs to pick up the tab, especially the taxpayer.
I don't know much about Mr Shamplina, i expect he has a big ego, not bad in itself though!
His comments above are very accurate and descriptive as most of us on this forum will agree. However, I don't see this industry as fast moving or fast paced unless he is referring to mortgage rates. The writing has been on the wall since about 2006 with changes for rental market. Back then, when every other person in the street were talking about becoming a landlord and homes under the hammer was clearly produced to show how easy it was! When the wheels came off for a lot of people in 2008-10 this image did not go away. Falling interest rates and this belief that we did very little to have this income fuelled resentment and jealousy. Osbourne tapped into this in 2016 and now some Landlords will need to sell as they will not be able to afford these rates and pay their tax. Looks like when we sell we may also be paying more CGT, it never ends. This will get worse next year and possibly 2024 if your current fixed deal comes to an end, same for home buyers. Therefore a 10% dip is very likely though due to shortage of properties (iMO)i think unlikely to be worse than this.
I disagree with Paul as I do not see an end to these changes that are being proposed, just listen to the news about COP; how can they not insist on insulation now. Section 24 will not be reversed as it will be deemed supporting the rich etc etc.
It will be better for those with small or no mortgages, hence my sell off now to put myself in that position. The change in the rules I can handle, paying out more money is not so appealing.
Advice for new Landlord's, examine why you want to do it closely and only do it if you have a 60% deposit. Otherwise you will lose your money!
Andy. Well said Paul is a great guy really I know him for years to see & listen to but not a personal acquaintance. He is about 22 years on the circuit done some good work for Landlords to get their property back, former Bailiff if still not current. Unfortunately he was head hunted by a landlord Insurance Company so not sure if he has divided loyalties.
Andy sorry to disappoint you as you won’t be selling your personal annual Capital Gains tax relief allowance of £12’000 in being cut, also the 28% actual C/gains tax on any equity above x left is being proposed to increase to 40% this month, to stop you leaving or fleece you on the way out, the Big Boys are not ready to take over our Business yet, so we are required to give those brand new amateurs a chance to take over our Business.
Hi Michael, yes I agree that it is highly likely that I will be fleeced further as I reduce my portfolio in this market place, but the houses have paid their way and will have a healthy profit when I sell.
I do not intend to spend a penny of this money but to pay off mortgages which, even after tax, will put me in a better financial position. I have had another tenant give me notice and now need to decide if I wish to sell this property also.
Well done Paul for speaking up for landlords instead of saying more should be done about bad landlords. You still have a long way to go! When are you going to get round to exploding the myth there are no bad landlords? yes there may be a few but too few to talk about and dwarfed by bad tenants by thousands to one. I still never had an answer to why would tenants put up with bad landlords! I have had tenants leave because I did not act quickly enough about them having a spider in their room. Tenants leave if things are not perfect or you do not look after them. Then Paul when are you going to question all this pointless housing legislation which has no value on a cost benefits analysis? Just criminalizes landlords and adds to the cost and complexity of being a landlord
Thank you all for talking down being a landlord as it will keep the competition away and from the sound of most of you, you will be selling up so reducing the supply of rented property which will increase rents.
I love being a landlord, it is amongst the best jobs I've done. Providing accommodation is a worthwhile job. I compare what I do with a housing officer and I'm not saying I feel sorry for the housing officer, who is depressed as she realises what she's doing, enforcing pointless standards on my hmos, pushing the cost of accommodation up and even closing desperately needed accommodation. It has dawned on her that her job has no purpose and is causing harm to society. When she started in the job she thought she was protecting tenants she now realises she is part of the problem.
I do not know of any better job which serves a better purpose and provides better financial rewards than being a landlord. If you can tell me as being a landlord is not perfect and if I could do better for less I would consider it
Jim Haliburton
The HMO Daddy
I think the only competition that is going to be kept away is other private Landlords. Michael is right in that the big companies are taking over and investing heavily into the market place. Not so sure that they wish to buy older properties though. How long this will last is anybodies guess, but certainly more time than I have!
I do not disagree in your comments about being a landlord, I will continue to be so, just need to de-leverage to manage the incoming storm.
As you know it is the incompetent officials and useless politicians that are creating the issues and I am fed up with it but will manage.
Yes James my friend I can’t tell you that now after the event.
I can tell you when you started you didn’t have all those Rules. Regulation’s and massive Costs bestowed you, need big outlay or have the Capital expense of today relative to income. Just buy a slum cheap and rent it out without lifting a finger I seen people do that for sure.
No I can’t tell you how could even begin to get involved in the Business you love today,
Best wishes.
Jim
I thought that 85 % of your tenants kept the money when the government started paying benefits direct to them. It would be alright being a landlord if we had law and order. Most jobs l have had have been better than being a landlord. Maintenance and refurbishment costs have been too high, and if course, gardening !
I thought you had been a lecturer before being a landlord, at the time you got inflation linked pensions !
In answer to Paul's question, my golden nugget advice for any potential landlord starting out is to put their money back in their pocket.
Yes Edwin you are correct most of my DSS tenants kept the rent so we apply for direct payment once they are two months in arrears. Another way of looking at it is if you take a DSS tenants you lose two months rent. I’ve stopped taking DSS tenants now but I love them because once they’re settled you had a tenant for life, a small price to pay for the loss of two months rent!
Yes I have also been very lucky in life I also loved lecturing who is better than educating people to get on in life who wanted to learn. The pension though is inflation linked and is only 40% of final salary which is not that great and takes 40 years to build up. 40% of not a great salary is not a great pension! My first HMO within 17 years produces net income of three times my lecturing pension. You can see why I love Property.
Jim Haliburton
The HMO Daddy
Interesting point Jim, although totally off subject, '' educating people to get on in life who wanted to learn'', I saw that from the other side of the fence, myself and friends hated school and school teachers, but out to work as apprentices on day release to Norwich City College being taught by lectures that treated us as equal adults and about useful things that we were interested in we loved it, a lot of us went onto do extra courses way above what was expected of us, bring back those apprenticeships they served us well as they did generations before us.
Though again off subject completely agree. My brother was an electrical apprentice in late seventies and he profited well from his work and looks back at those times with affection. Neither of us were that keen on school but left with reasonable results back then. I went a different route of HM Forces and would also highly recommend that.
Not everyone can be a graduate and the country really needs tradesmen now, the schools should be focusing on that as well as health care workers.
Good to hear Andrew and Andy
Jim Haliburton
The HMO Daddy
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