Landlord Blues: Renting out the house from hell

We therefore had to do what we’d always dreaded and let out individual rooms on separate tenancies. We knew this would be a permanent change and we’d be in for a rough ride. The rooms were to be let furnished, but exclusive of bills and in this way, we gradually filled up the house again. Over the next few years, we dropped the rent for each room from £195, to £180, to £160. The area was going downhill fast and we had to take what we could get. As predicted, we experienced hassle from the beginning, with some tenants standing out as particular nightmares.

After Cho moved out, Tracey moved in. This was just a few days before we were due to go to France for a week, after a very busy summer sorting out the houses. Before letting the room to this woman Adrian had spent several thousand pounds re-decorating and re-carpeting the entire house, and putting a new bed, wardrobe, desk and chest of drawers in her room. We hated spending money on a house which, by now, might have been in negative equity (it had been valued at £115,000 at one point and we had increased the mortgage to £93,500 and it was now worth maybe £90,000), but it had to be continually worked on and maintained in order to attract tenants.

A couple of days after Tracey moved in, we were lazing on a pristine, sandy beach in Biarritz when the mobile rang. Adrian pulled a face, so I answered it. It was Tracey.

‘There are quite a few things I need you to do at the house,’ she started. ‘Firstly, I need you to paint the wall outside that faces the kitchen, as it looks really ugly when I’m washing up. Also I would like you to change the toilet seat in the bathroom. The one now is a really horrible colour. And I need a fridge in my room, so if you can get me one as soon as possible, that would be good.’

‘Actually we’ve just spend thousands on the house,’ I replied, ‘and we’ve got no intention of spending any more. We won’t be painting the wall, changing the toilet seat or giving you another fridge. We don’t supply fridges for bedrooms. I’ve never heard of such a thing.’

‘Well I don’t  find that acceptable. I demand to see Adrian.’

‘We’re on holiday in France,’ I replied.

‘Adrian didn’t tell me he was going away!’ She was outraged.

‘He doesn’t have to tell you,’ I pointed out calmly. ‘He’s your landlord. Just as you don’t have to tell us if you’re going on holiday.’

‘Well, I really think it’s not asking much for Adrian to change a toilet seat and get me a fridge,’ she repeated.

‘Forget it,’ I said. ‘There’s no way we’re spending money on unnecessary works and there’s already a large fridge-freezer; we are not supplying individual fridges,’ and I ended the conversation.

Maybe it was a cultural thing with Africans, because when we let the room to a Nigerian man a few years later, he telephoned to ask for an iron. As often happens with these requests, he added that it would not cost a lot.

‘Well, if it doesn’t cost a lot, get one yourself,’ Adrian answered. ‘We’re not running a Travelodge. We provide you with a bed, bedroom furniture, living room furniture and kitchen equipment. The rest is up to you.’

Adrian was fuming when he told me about it.

‘If he wants hotel standards he can go and bloody stay in one for £30 a night.’ The man would not give up, though, repeating the same request over the next few days, texting and ‘phoning, giving his opinion that it was not much to ask for, until Adrian warned him:

‘Look. If you don’t stop calling, you’ll get your notice.’

Since he was paying a hundred pounds less than he’d been paying in the city, had friends in the area and the bills were included, he finally did shut up about the iron.

We later heard from the other tenants that he was in the habit of going into the kitchen each morning, switching on the electric oven, opening the door and leaving it on for hours as a form of heating. This was because the heating on the first and second floors was electric and we paid the bills, but it was gas central heating on the bottom floor and this was the only thing that the tenants would have to pay for themselves, by putting money in the gas meter which none of them ever did; they’d rather freeze to death or misuse the electric cooker. When we confronted him with this allegation he denied it.

Ugandan Tracey did a runner after only a few months, not paying the last month’s rent, saying we could use the deposit. She had ‘phoned to say she was leaving to go back to Uganda for good, because her mother was ill. A few months later we saw her at a local train station, so she was telling a porky. By then another gem, Simon, had moved in.

At the time Cho was a tenant, the mortgage was £600 a month, with only one room occupied for three months over the summer, at a half-rent of £95 a month. We made the mistake of leaving all the other rooms unlocked to facilitate viewings and later discovered that Cho had family and friends staying there most of the time. As we were very hands-off at the time and were spending a lot of time away, and because he had seemed so pleasant (he gave me a Chinese fan one day, to butter me up) we would arrange for him to show around any potential tenants, so that we didn’t have to go to the trouble of finding and paying someone to go to the house to do the viewings. Surprise, surprise those who viewed the house never took a room. Cho was then able to carry on benefiting from the entire house himself (he could have been charging rent to his friends and family for all we knew).

I started to suspect he wasn’t what he seemed when, one day while I was at the house, he said:

‘It’s good you have the £95 coming in from me each month, isn’t it? At least you get £95 profit every month.’

‘How silly of him,’ I thought, ‘to assume we pay no mortgage, water rates or other costs and that the princely sum of £95 is for us to spend on ourselves.’

But we had a mental block, refusing to budge from the notion that it was a student house, because that had always been the case; if one professional moved in, council tax would have to be paid and that would screw up the whole let and make us liable to pay another £900 a year. It took a while to realise that the situation was unsustainable and we would have to let to ‘professionals’ or unemployed and pay the council tax ourselves (or include it in the rent, if possible).

When this light-bulb finally went on and we realised we would never get another paying tenant unless we gave Chinese person his marching orders, we did just that. We knew that letting out the rooms individually in that area would be a high maintenance solution, but the alternative was to leave the house empty or with one or two student tenants if we were lucky.

We proceeded to rent the house out for several years to groups of four students on joint contracts.

As we had nearly always let the shared houses on joint tenancies, to people who knew each other and had decided to move in together, we were mostly shielded from their internal disputes and issues.  We had a few rude students; people who wouldn’t offer the handyman a cup of tea while he worked there all day, and while making constant cups for themselves, but there were no earth-shattering issues during the initial few years of renting it out.

The boring bit, about rental returns for those interested (otherwise skip this):

What’s more, during those first few years, we received a good return; at best we were getting £195 x 4 per month, for 9 months of the year, and then a couple of hundred pounds as a ‘retainer’ over the summer months, which were interpreted as lasting from mid-June to mid-September in this small town (but only July to August in the city). We therefore grossed about £7,500 for a few years, which represented a 14% return on the £53,000.

In terms of our investment, we had put down a 15% deposit, that is, £7,950. Together with furniture, decoration and so on, we laid out about £12,000, initially, in order to be able to rent the house out. Mortgage interest rates were high at the time and we were paying about £600 a month at the peak. This meant that our annual gross profit (rent minus mortgage payments) was about £300 at one point, and the costs of insurance, maintenance and so on meant we were operating at a loss. The annual water bill alone, for which we assumed responsibility, came to £700. We weren’t perturbed, being mainly focussed on capital gain over the long term, and prices seemed to only go in one direction - up.

So we rented to groups of students until the town seemed to undergo some kind of crisis, with a disappearing populace. We just couldn’t find tenants to fill it and friends who rented out a house nearby went through the same thing, managing to get maybe two tenants at any one time for a four-bed house.  It turned out that the reason for this inability to find students to rent the house was that unbeknown to us, many of the students at the former polytechnic were now being taught in large, new premises in the city and others had decided to save money by studying whilst they stayed in the family home.

To understand this brief post, you will need to read my previous post on this blog and the first comment that has been made. I have decided to write a new post, rather than just a comment, as it raises some issues I face from time to time and I'd like to deal with them once and for all.

This is my answer to the comment:

One problem with my latest critic is that she has drawn a conclusion (that I am rubbish in business and make 'odd' decisions) without knowing all the facts, so I shall now outline the points I feel are relevant.

When we were buying our 'house from hell', several years ago, house prices were increasing rapidly each month; this is why the seller started to regret having agreed to such a cheap price of £50,000 for a large 4-bedroom house. Also, at the time, the area where the house was located was not particularly 'rough' and we didn't have a crystal ball to show us that it would go downhill in the future.

By the time we completed on the house it was probably worth about £55,000 (and we paid £53,000). A year later it was worth about £75,000 and a few years after that was valued by a mortgage company at £115,000. If we had offered an extra £500 to seal the deal the seller would have laughed in our faces. I reckon the £3,000 was about the minimum extra to clinch the deal; maybe I was wrong - maybe I could have offered £2,000? No-one will ever know. But that's all small fry in terms of what we gained by the increase in value of the house.

The other issue I would like to draw attention to is the tendency these days for some people to assume that when you are buyer you are king; that you can beat a seller down, insult them with 'cheeky offers' and so on and they'll roll over and agree to anything. My experience tells me that this is not the case. In the rising market in which we bought most of our houses, we often paid the asking price or just a couple of thousand shy of it (and sometimes were in direct competition with others also looking to buy the same properties). We did very well out of this.

What's more, the commentator has also missed the point of what I try to achieve with my writing. I put some of the bare figures in for those who are interested, but mine is primarily a holistic account and much more concerned with the psychological implications of being a landlord.

This all, of course, leads me to question the motives of people who comment on my blog in a way in which they try to put me down, whilst puffing themselves up. What's behind it? Do they need reassurance that they're successful, that they're better than other people? Is that what's behind it? I'd be interested in alternative theories people might have. It's an important question as there is so much posturing going on on the internet, in addition to the insults and the bullying.

I am going to suspend the serialisation of my first landlord book for the time being, as it is already available as an ebook (I know. £1.99 is a lot to pay, and I too like to get the free books – but if you are a landlord, you can save a lot more than that if you learn from our experience).

Anyway, all is not lost for those who like free information and entertainment, as I am instead going to start serialising my third book on life as a landlord, which is a work in progress.

But a word in your ear first. If you don’t like slanging matches, abusive text messages, male nudity, talk of paedophilia, blood and gore, suicide attempts and a ranting landlord, please STOP READING NOW. And for those who carry on reading regardless, I ask, not unreasonably, that you refrain from moaning at me afterwards (you know who you are).

Introduction:

Okay. The house wasn’t from hell. It just seemed to attract the lowest life forms. For this reason, the property took on a loathsome character, an evil that seeped into its walls and carpets and mattresses (along with the urine-soakings inflicted by the incontinent alcoholics). The house became filth incarnate.

The descent was gradual and mirrored the slide into ignominy of the entire area. As the local polytechnic/pretend-University re-located its centre of teaching down towards the city, the place became a ghost town and we had to accept whatever tenants we could get. And as the cast-offs of society took up residence they not only wrecked the fabric of the building, they also tainted and polluted the house, so that we would dread thinking about it or going up to see it and inspect the latest bout of damage. As long as some money was coming in (usually from the State benefits system), we could let it slip and slide until our once sparkling, freshly-carpeted and painted furnished property became a druggy and alcies’ hovel.

And after it had all started so well.

Picture the scene: a nondescript, terraced valleys house, stone walls, brown, slightly worn wooden front door, smoke-stained lace and curtains pulled tightly against the outside world. Who can imagine the goings-on inside? Fear not, dear reader, as I am about to open up this world and allow you to enter and catch a glimpse of the lives of the dregs of society.

The main characters:

Simon: Tall, overweight Cumbrian in his 20s, with body odour problems and an over-bearing, arrogant manner.

Gerald: Short, diabetic, one-eyed, diabetic darts player, early 50s.

Nigel: Thin, scruffy, valleys man, perpetually smoking a rolly, mid-40s.

Jason: Dishevelled Welshman aged 30, perpetually hooded, anaemic, skinny with wasted body and always with cuts and bruises from falling over.

Okie: Short, thin Nigerian office worker aged 28, shirt and tie to work; underpants and vest in house, even during council inspections.

Paul: Dark, stocky Welshman in his late 30s. A trained carpenter, fallen on bad times for reasons initially unknown.

Small walk-on parts:

Cho: Ingratiating, sly, pseudo-friendly Chinese chancer, late 20s.

Tracey: Big, fat, immaculately-dressed Ugandan, in colourful clothing, with bossy, demanding demeanor.

If I could write plays and there was an easy way to express text messages then the story which follows would be ideal for the stage (or maybe a TV mini-series). However, as I can’t be bothered trying to work out how to write a script, I shall instead set the scene in my usual prose format.

Buying the house:

We viewed this four-bed house and offered £50,000, which was accepted.  The process then went quiet, making us wonder whether the seller had changed his mind. A couple of months after the offer, the estate agent rang:

‘Sorry to have to tell you this, but the vendor has said that because house values have increased since the sale was agreed, he wants you to up your offer.’

The agent was clearly embarrassed and Adrian was tamping.

‘What a damn cheek! He can get stuffed. There’s no way he’s getting a penny more.’

‘Hey, hold on,’ I advised, ‘Let’s not cut off our nose.’

We slept on it and the next day I told the agent we’d go to £53,000, but not a penny more. I didn’t think that would be enough, but it was worth a try. Later that day the agent called to say the owner agreed to this amount and the sale went through.