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Original poster

Any accidental landlords around? Small 1 bed flat.

54 replies

DeeplyMovingExperience · 09/12/2020 19:30

I'm in a real quandary about whether or not to become an accidental landlord, renting out a 1 bed flat. I've heard so many horror stories, but surely there must be an upside somewhere? I have no intention of becoming a property mogul so it would only ever be my little flat.

Anyone with good experience or any tips? I need to make up my mind and stop sitting on the fence.

OP posts:
MistletoeandMoccasins · 09/12/2020 21:14
  1. not pipes bursting - insurance took care of that. For new boilers, guttering, front doors etc
CarHire101 · 09/12/2020 21:25

I disagree my job requires moving around which is often temporary and so many choose to rent out their property to save paying rent and mortgage for a year. So it is very possible to be an accidental landlord if your next career/work progression prompts a temporary move to a completely different location.

BackwardsGoing · 09/12/2020 21:34

If you are going to do it but are clueless/busy/inexperienced then get an agent and an accountant.

The financial returns are pretty low now so do your sums to see if it's worth it.

FirstOfficerDouglas · 09/12/2020 22:07

Seriously - too risky. (I did it - couldn't sell. My flat was only two years old and interest rates had doubled and prices halved!!).

Tenants broke the key off in the lock (how???), emergency locksmith, blamed "faulty lock" - no way. Broke the loo seat, made a huge drama about the washing machine "making a noise and being dangerous" and called an engineer, burnt the carpet with an iron, damaged the walls moving furniture and skipped out without paying the last two months' rent. (Thought myself lucky as at least they had gone)

Now, so many tenants just pay one month's rent, then wait to be evicted. The landlord can do nothing for up to nine months. No income. There is no longer any shame for tenants to do this. They are encouraged to do so as it puts them on the Council list and they believe (often mistakenly) that it will get them a council house

Can you live without rent for 6 months or so and pay court costs on top of all the fees, (EPC, PAT, Agents, Inventories, )?

The risks are huge!!

Didyousaysomethingdarling · 09/12/2020 22:58

If your property has gone up in value since you bought it and you sell now, you'll KEEP ALL THE PROFIT. If you rent it out and then sell, you'll have to pay capital gains tax. This tax could amount to much more than the total rental income you receive. The longer you let the property the greater the tax liability (amount of time main residence vs rental). Especially if your flat is in the South East/London. Also there are whisperings this tax is going to rise significantly! Please read up on S24 and S21. Pop over to PropertyTribes, Property 118 and HousepriceCrash and read up on all the changes in policy, recent and proposed.

PiersMorgansYogaTeacher · 09/12/2020 23:08

Really, don't do it. It sounds like you don't have a clue so it's just not your area of expertise.

There are so many things that can go wrong and for people saying 'get an agent', they're not regulated and a lot of the time they'll take your money and do fuck all for it and there's no one to complain to.

Really, just sell and invest the money. The housing market isn't falling yet and it's a good time to invest in shares.

Wauden · 09/12/2020 23:15

It depends on the mortgage and expenses compared with the rental income. If no profit, or v little, why bother.

Wauden · 09/12/2020 23:17

One reason to bother is that you hope that the value will keep.

Depends in what you want in life also.

Didyousaysomethingdarling · 09/12/2020 23:20

But the longer you keep it, the more tax you pay proportionately.

Keha · 09/12/2020 23:24

I'm scared to comment on here in case it's sods law and everything goes to pot with our flat...but we went out our old 1 bed flat, have had reasonable tenants, no big issues, the odd phone call and it's a bit of a hassle when they move on and we need new ones. Don't make a load of money, perhaps £200 a month. But for now it's worth it and if it becomes a problem for us we'll sell it hopefully.

Wauden · 09/12/2020 23:27

@Didyousaysomethingdarling

But the longer you keep it, the more tax you pay proportionately.
Sure, but that's offset by the profit.
Redtartanshoes · 09/12/2020 23:35

Have you thought about Airbnb’s going it or letting as a holiday cottage?

Doughnut100 · 09/12/2020 23:55

I let my London flat out for a year. Chose a young couple, picked them very carefully. They were a bit clueless, asked me about silly things like how to pay council tax. They painted the walls and got some on the floor. But ultimately they were fine. I did it all myself, I read up on it loads beforehand, got all the insurance and certificates etc. I'll be doing it again soon. I really don't want to jinx myself but it was easy and fine! I suppose I got lucky.

Chocolate1984 · 09/12/2020 23:55

We became accidental landlords in 2012. We had bought a house, couldn’t sell our flat (even at a £15,000 loss) and couldn’t afford £800 a month costs leaving it empty in the hope it would sell. We decided we would rent it for a year and hope things pick up. We employed an agent who does everything for 15% of the rent + VAT. We have not had a bad tenant in 8 years, the current tenant has been in for nearly 3 years. When we are looking for tenants our agent deals with everything. Our agent usually says the tenant is perfect on paper, good references but I just didn’t get a good feeling about him/her and we essentially let him pick who to rent to. We mainly rent to single professional women in their late 20/30s. It’s a two bed new build but the small bedroom is so small it’s used as an office.

Our flat is nice. The furniture is our old furniture, we maintain it, if something breaks we replace it quickly, we haven’t increased rent. I think we treat our tenants well and they respect our flat.

We don’t make money from the flat - it costs us £2000-3000 a year. Our mortgage is still our repayment mortgage so we have always paid tax on the repayment part. We still have to pay factor fees for communal building insurance, lighting and garden maintenance. We’re not in it to make money. Just to keep the flat ticking over. The flats seem to be selling for £40,000 more than we paid but I don’t think we would sell. We certainly wouldn’t evict our tenant to sell it.

Get a good agent and decent landlords insurance and you’ll be fine.

earsup · 10/12/2020 01:33

I have two let out. Get the rent guarantee insurances etc. I charge low rent and long contract..no issues...great tenants..no hassles...I am lucky ??..

Original poster
DeeplyMovingExperience · 10/12/2020 09:43

This is all incredibly helpful. There is no mortgage on the flat. It's also just around the corner from our house (literally 1 minute's walk). We are in a pretty university town which attracts lots of visitors. I was also thinking about AirBnB or holiday lettings.

Thank you @MistletoeandMoccasins for all that info. Food for thought.

OP posts:
TinkersRucksack · 10/12/2020 10:58

I have a house rented out through a letting agency who complete quarterly checks on the property, and I've had the same tenants for nearly 9 years now, had absolutely no issues other than replacing fixtures and fittings.

They're good tenants and we're good landlords so I guess we've been lucky. It's not rented to make a profit, just as a long term asset.

daisyphase · 10/12/2020 11:04

If there is no mortgage, then it is still possible to make money. Think about the likely annual rent (less costs) as a percentage of the market value of the flat and you'll perhaps have a return on equity of 5% or so. Lots of people decide this is reasonable enough and worth the hassle and risks over holding a basket of shares. Having it close to where you live is also better as it eliminates time and travel costs every time you have to check out a problem. If it's a purpose built flat with concrete floors and few maintenance issues, all the better. If you can let it unfurnished and without white goods, all the better. If the rent you can set will mean that your flat is targeted at a single professional working person on more than minimum wage, that is also better as that person has more financial freedom and is perhaps less likely to require social housing in the future (meaning less likely that they wait until you evict them so that they can get social housing). You'll still pay more on any capital gains on housing than on shares and still have more work to do. Booking holidays are a problem as you'll never know when your tenant needs you. However, with no mortgage, you may be in a position to pay an agent 15% to free you up from being on call 365 days per year. Good luck if you decide to go ahead!

earsup · 10/12/2020 12:44

Lots of good points made above to help you...we dont have loans on the 2 houses so its good income...we have been very lucky with the long term tenants but they do pay about £400 a month below market rent..so they deal with any small repairs,...they are builders so dont mind doing bits... we obvs replace appliances etc...we have a great local co to do the gas cert each year...£90, every 5 years we do the electrical cert about £200, and we pay landlord licence...£500 every 5 years....You must get the homelet rent insurance as covers loss of rent and any eviction costs and bailiffs fees...that costs about £240 a year now...do a short contract initially....you will soon know if they are going to be a pain and demanding....then if ok...extend...long lets are good as no agency renewal fees etc....we have rent collection only with the agency and pay one month rent in fees for that.

CodenameVillanelle · 10/12/2020 13:10

@FirstOfficerDouglas

Seriously - too risky. (I did it - couldn't sell. My flat was only two years old and interest rates had doubled and prices halved!!).

Tenants broke the key off in the lock (how???), emergency locksmith, blamed "faulty lock" - no way. Broke the loo seat, made a huge drama about the washing machine "making a noise and being dangerous" and called an engineer, burnt the carpet with an iron, damaged the walls moving furniture and skipped out without paying the last two months' rent. (Thought myself lucky as at least they had gone)

Now, so many tenants just pay one month's rent, then wait to be evicted. The landlord can do nothing for up to nine months. No income. There is no longer any shame for tenants to do this. They are encouraged to do so as it puts them on the Council list and they believe (often mistakenly) that it will get them a council house

Can you live without rent for 6 months or so and pay court costs on top of all the fees, (EPC, PAT, Agents, Inventories, )?

The risks are huge!!

Nobody encourages tenants to stop paying rent. This would lead to them being intentionally homeless and they would not be entitled to housing. Also you don't have to wait til the end of the tenancy to evict for non payment of rent. I know under covid things are different but in usual times I believe it's 2 months rent missing then you can start proceedings
daisyphase · 10/12/2020 13:19

@earsup you are very lucky to have builder tenants! It must make a huge difference to have a tenant that knows how to fix things and doesn't allow the place to deteriorate.

Charging below market rent is a great way of keeping tenants happy for the long term and avoiding the major stress of new tenancies and void periods. It would however concern me if I was looking to exit the business at some point in the next few years. The horror stories that we hear about tenants refusing to leave fundamentally arise because the tenant cannot afford to move. If they look around and anywhere suitable is going to cost them £400 extra per month, there is a chance that they will dig in and you will end up having to evict via the courts.

earsup · 10/12/2020 14:06

[quote daisyphase]@earsup you are very lucky to have builder tenants! It must make a huge difference to have a tenant that knows how to fix things and doesn't allow the place to deteriorate.

Charging below market rent is a great way of keeping tenants happy for the long term and avoiding the major stress of new tenancies and void periods. It would however concern me if I was looking to exit the business at some point in the next few years. The horror stories that we hear about tenants refusing to leave fundamentally arise because the tenant cannot afford to move. If they look around and anywhere suitable is going to cost them £400 extra per month, there is a chance that they will dig in and you will end up having to evict via the courts.[/quote]
Yes great tenants....they are Romanian and pop home each summer for a few months to build their own houses....they also have TFL contracts here so always in work and pay on time...they are so lovely and send me honey from their hives back home....but i understand it can go wrong and lead to stress and damage...my friend had horror stories about his tenants....I am selling that house next year and will give them 6 months notice...i dont worry about them not moving out...and i have the homelet insurance which is actually excellent and does cover loss of rent and all court costs as my friend claimed on it several times...

TwoBlueFish · 10/12/2020 14:35

My DH is an accidental landlord. He inherited his mums flat and the flat upstairs about 2 years ago. The upstairs flat has a long term tenant. We renovated downstairs and how have lovely tenants who have been in for about 12 months and I think will be long term. Both flats are fully managed. He does make money on them (probably £9k a year), he is unable to work due to mental health issues so it is his income.

It can be a hassle sometimes when things go wrong but overall they just tick over.

Polyxena · 10/12/2020 16:16

This reply has been deleted

Message withdrawn at poster's request.

earsup · 10/12/2020 19:55

@Polyxena

Charging well below market rent just ensures that tenants won’t tell you about repairs in case you put the rent up.
Not in my case...the roof leaked and they couldn't repair it as no ladders tall enough to reach the apex....its very high....they rang me and I got it done...they repaired a leaking shower and damage to ceiling below...I have a good relationship with them as mentioned above....they have invited me over to Romania etc for holidays...