Negotiation, Negotiation, Negotiation

UK Property Investment news and comments from Mark Harrison of YourPropertyExpert.com

Archive for the ‘Landlording’ Category

Investors Chronicle article – “Property Swindles Exposed” and the need for licencing of landlords

Posted by markharrison on November 9, 2008

The current issue of Investors Chronicle has an excellent article alled Property Swindles Exposed. (You can read an outline of the article at their site here.)

Without wishing to re-post the key findings of the article, the author went along to a series of property seminars, and was horrified by what (s)he found. (I’m assuming that Claer is a she, but I’m honestly not sure.)

However, several of the (justified) complaints about the property seminar industry in the article seem to boil down to some key points. [These aren’t the points the article lists, by the way, but my overview synthesis of what the complaints the article lists have in common. The article is well worth reading, and I’d strongly recommend you go and get a copy of IC to read if in full.]

  • The information provided is basic and aimed at building a dream, rather than actually giving insight
  • The presenters (massively) underplay the risk of a number of strategies
  • Some of the “deals” presented are, frankly, incredibly poor
  • The whole concept of BMV investing relies on exploiting people

To take these one by one.

The information provided is basic and aimed at building a dream, rather than actually giving insight:

I’d agree with that. I’m horrified at what a lot of companies charge for. I’ve seen seminars based around no more content than my “Below Market Value – Parts I-IV” newsletters (where are free starting here!) sold for £500+

The presenters (massively) underplay the risk and effort of a number of strategies:

I’m glad to see other people finally comment on this. Looking back, I first started writing about the risks of property investment back in 2004, and my 2004 CD set talked about the WORK of being a landlord, and tried to dispell the myth of passive income.

Some of the “deals” presented are, frankly, incredibly poor:

Yup. I’d go along with that. I’ve worked with some good finders in the past, but generally people who were sourcing for me on my terms. My worst deals have been through “portfolio companies.” (I’m not saying that they’re all bad, only that I’ve not found one I’ve been able to work with for more than a single transaction!)

The whole concept of BMV investing relies on exploiting people:

I’m not denying that this happens. However, I’ve also seen examples of times when landlords buying to rent-back have worked strongly in favour of people who otherwise were on the brink of homelessness. The comments the article makes about “I caution would-be investors about how they’d feel about evicting a family which defaulted on a tenancy” is hardly specifially about BMV.

I can see that there is a difference between A: simply letting a property on an AST, and then evicting the tenant because you want to live in the property, or sell it, or refurb it to find a higher-paying tenant, and B: buying someone’s house at a cut-down rate, renting it back for 6 months to them at a cheap rent, and then evicting them because you want market rent.

My complaint about the article in this regard isn’t that I’m denying the problem happens, but that the article is seeming to portray “predatory landlording” as either common, or something that seminar companies teach. In my experience, this isn’t the case, and that most landlords do a professional job.

For this reason, I am in favour of the FSA regulating Sale and Rent Back schemes. In fact, in the light of the Rugg report (about which, more on a future date), I’m not opposed to the licencing of ALL landlords, though I’d rather see “Part P-style” accreditation in which organisations like the NLA, the RLA and (if it’s still independant) the NFRL are able to accredit landlords rather than having another central government department responsible for so-doing… or worse, a different accreditation by each council, so that a landlord with 5 properties in 5 towns (which to be fair, isn’t something I’d recommend) needs to pay 5 sets of accreditation fees.

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Posted in Landlording, Property Investment | Tagged: , , | 4 Comments »

Landlord Inventories – top tips

Posted by markharrison on July 9, 2008

I’ve been sent a review copy of Toby Hone’s excellent ebook this week. (More about that in a few days, when I’ve finished my comments to him.)

I’ve made a couple of suggestions to Toby about adding to the section he writes on page 42 about the importance of decent inventories, so I thought I’d blog about this subject.

If possible, I always carry out check-in inventories myself. I’m afraid that I’ve yet to find an agency who carries them out to the level of detail I expect. I regularly get feedback from agents along the lines of “I’ve never seen an inventory that detailed.” There are two things I include that virtually no-one else does, but that have certainly been worth their weight in gold.

  1. If I include appliances, I include the make and model, as well as age. It is not unknown, alas, for an inventory to read “a fridge”, and find that the fridge returned at the END of the tenancy is smaller / older than the fridge provided
  2. If possible, take round a digital camera, and photograph the condition. This is, again, particularly important for any furniture / appliances you include, since it provides proof (once the tenant has signed the inventory) of what was left.

Obviously, none of this removes the fact that you CAN’T claim against a tenant for “reasonable wear and tear”, but this isn’t about protecting yourself from good tenants (the vast majority) – it’s about protecting yourself from bad!

For the record, in 14 years, I’ve only ever made a deposit deduction twice, and one of those was made by an agency I used on a full management basis from the days before I learnt to manage my own properties.

[Declaration – if you buy the ebook as a result of clicking the link above, I will receive a small commission. This does not affect the price you pay. Our policy is always to declare commission/affiliate links, but only to recommend products based on personal experience.]

Posted in Landlording, Property Investment | Tagged: , | 3 Comments »

National Federation of Residential Landlords…

Posted by markharrison on June 25, 2008

At the risk of blowing my own trumpet, I’ve just been appointed a Director of the National Federation of Residential Landlords (NFRL.)

The way it happened was slightly odd – back in April, at the last General Meeting, the Board had put a resolution in front of members asking for permission to enter into merger discussions with other landlords associations. (Technically, to renew this permission, which was granted in, I think, 2004.)

Because of the way the motion was worded, I spoke out against this motion (as did Mike Stimpson, one of the Directors!)

The meeting wasn’t fun and games – the majority of people who had turned up in person voted against, but an overwhelming majority of members who’d filled in a postal vote had voted for, hence the motion was carried.

Bizarrely, however, after the meeting, three of the Directors (the pro camp) came and found me, said that they’d been impressed at the way I’d argued against them… and asked whether I would be interested in becoming a Director!

A couple of weeks later, I managed to get together with Mike Stimpson, and ask what he thought, and he advised me to accept their offer if they made it formally.

Well, this morning, they made the formal offer, so I have just accepted the Directorship, and attended my first board meeting.

Interesting times ahead for UK landlords – the regulatory environment is changing, and while it’s making some great steps to protect the most vulnerable members of society, there’s always the danger that the wording of legislation intended to protect the few will, in fact, place onerous obligations on the many that were never intended. It’s part of our job as a UK Association, to lobby on behalf of private landlords to ensure that the right balance is struck. Fortunately, in Mike, the NFRL has a master of the game, and it’s an honour to work alongside both him, and a board who sought out a dissenting voice to give better balance!

Image Copyright: umjanedoan – used under Creative Commons licence

Posted in Landlording | Tagged: , | 1 Comment »