Five years ago, we became “accidental landlords”. We’ve had A LOT of ups and downs since then! In a world where finances are incredibly complicated and family life even more so, it’s becoming increasingly common for people to fall into becoming a landlord.
What is an “accidental landlord”?
Many landlords rent out houses professionally, they do it to make money. Professional landlords may rent out houses as their “job”, it’s their sole source of income and their full-time profession. Other landlords may purchase a house on a buy-to-let mortgage with the sole purpose of renting the house out with a view to making a profit from the house long-term.
An accidental landlord never set out with the intention to rent out the house. They’ve fallen into being a landlord due to circumstance.
How we became “accidental landlords”
We lived in our two-bedroomed terraced house quite happily for a fairly long time. My husband bought the house way before I knew him and once I moved in we re-mortgaged and owned the house jointly. We had our two children and inevitably they had to share a room. The bedrooms were fairly big though and this wasn’t a major issue for us.
The problems came once I started childminding. The downstairs space became far too small. Initially, I was only minding one toddler alongside my own two very young children and it was manageable. The children would have the (fairly spacious) living room to play in and we’d use the kitchen table for crafts and mealtimes. As my children started school though, I started to take on other school-aged children too. My business grew rapidly and with all of the children before and after school, I felt as though the walls were closing in on me. We were in a very difficult position. For various reasons, we weren’t in a position to buy a bigger house. Our only option was to rent somewhere bigger, but then we didn’t want to sell up and rent as we saw that as dead money.
Before my childminding days, I’d worked full time in an office. When my eldest was a baby, I returned to work when he was five months old. I found the perfect childminder and was immensely relieved. Unfortunately though, she became ill before Big Man started with her and she wasn’t able to care for him. Sadly she died a couple of years later. In a weird twist of fate, when I became a childminder myself, a childminder friend told me that this lady’s house was empty. Her husband had moved away and was debating renting the house out for a few years. The house was a big three-bedroomed semi with an extension housing a playroom. It was perfect! Things kind of fell into place from there.
We approached the mortgage company about getting consent to let on our mortgage. It’s important to point out that you cannot just rent out your home when you have a mortgage. You need to get permission. This will usually involve a slight increase in your interest rate but you’re more than likely breaching the terms of your mortgage if you don’t do it. The bank agreed, the paperwork arrived and we were all set.
Initially, we wanted to do everything as cheaply as possible. We didn’t have a lot of spare cash and we went about pretty much everything the wrong way. We didn’t have a clue what we were doing and were very unprofessional (probably because we weren’t professional landlords!). We do things very differently five years on.
We’ve had some awful tenants over the last five years and life got incredibly stressful on many occasions. We’ve had complaints from the neighbours over our tenants streaking down the street, shouting through letterboxes, having all night parties and we’ve even found drugs and blood stains up the wall after one tenant departed. We’ve had chunks weirdly cut out of carpets, urine in wardrobes, fist holes in doors. It’s been tough!
When you consider that at one time this was our family home and we got on fairly well with our neighbours, you can perhaps understand that these times were very difficult.
Part of the problem is, you will never know how a tenant will behave until they’re living in your property. Every single tenant we’ve met has seemed lovely before they’ve moved in, but you just can’t tell!
I should say that we currently have a wonderful tenant and things have settled down tremendously since she moved in around 18 months ago. Fingers crossed she stays there for a while! After our first three disastrous tenants, we handed the whole job over to an estate agent and now we deal with them rather than the tenant, much less stressful in many ways but then estate agents come with a whole host of issues too!
Using an agent
Initially, we used an online estate agency to advertise our property. The agency allowed you to advertise one property and draw up contracts free of charge. We advertised online and we quickly found tenants. Unfortunately we had lots of problems though and we didn’t have a clue how to handle many of the legal details.
Following on from there we used an estate agent on a “find a tenant” basis. This meant that the agency advertised, showed potential tenants round, drew up the contract and handled the deposit. Once the tenant was in, we’d take over the running of the tenancy. The tenant had our contact details and the estate agent had no further dealings with them.
We had lots of problems with this tenant though. She was verbally aggressive, the police were constantly at the address and she was constantly late with her rent. This was a really difficult time. After a year or so, we handed control back over to the estate agents. It meant we paid them a fee every month but she was their problem. Rent was still consistently late and the neighbour problems continued but we had some breathing space from her.
With the last tenant, we went straight for fully managed from the start. The house was in an awful state initially following on from the previous tenant leaving and it took a lot for us to continue to rent it out at all. We were so tempted just to sell up. But, financially we knew that continuing to rent it out made sense. We made a deal with the agent that they would waive any finder fees and we’d simply pay them a monthly fee once they found a tenant. Eventually we were given two tenants to choose from, rightly or wrongly we decided against meeting them (it hadn’t proved anything in the past) and went off their situations.
So far, this tenant has been in the property for about 18 months and things have been good. Rent arrives on time, problems are reported when they need to be, neighbours are happy and the house is being kept well. We really hope things continue!
There are lots of legal requirements when you rent out a property and you really need to look into this very carefully before going ahead. The law changes regularly so please make sure you do your own research.
You can find lots of really valuable information here.
Our long-term plans
At the moment, we’re continuing to rent out the house we own whilst we live in another rented property. We’ve moved again since we moved to the house with the playroom to be nearer to my family who needed support due to illness. Renting made this so easy for us to do. It meant we didn’t need to wait for our house to sell before we could move – one month’s notice and we were off.
We’re planning on buying a house in the town we’ve moved to in a few years. We’re now both employed and finances have improved dramatically. We want to get in a better position though before we take that plunge as the house we buy will have to be our forever home. We’re really happy in our current rented property and the rental income is continuing to pay off our mortgage so in 3 or 4 years we will be in a much better position. Every spare penny goes to saving up for that next step.