Why DIY landlords may not save money
I’ve recently read a story on a landlord’s forum that serves to prove why doing things on the cheap is never a good strategy when you’re a landlord. The mistakes you are about to read are all too commonly made by DIY landlords. The baulk at paying a fee to a property manager. They rely on friends to introduce new tenants, rather than pay the cost of advertising and tenant vetting.
In their desire to save as much money as possible, DIY landlords cut corners. Then they find themselves with a tenant who:
- Makes erroneous complaints continually
- Takes up ridiculous amounts of their landlord’s time
- Causes cost after cost to mount up
- Gets the landlord a bad name with local tradesmen
- Refuses to pay rent
Rookie DIY landlord mistake number one – Not vetting a new tenant
When explaining their predicament, the landlord, who admits they are new to the game, says that they accepted the new tenant because she was a friend of the previous tenant. The previous tenant had been a colleague of the landlord, where the landlord works.
And there it is! Mistake number one. The landlord took the word of a work colleague who had been the landlord’s tenant. I suspect that the previous tenant (the work colleague) was trying to do a good thing and had been a good tenant themselves. But, you should never – I repeat, NEVER – take the word of someone else as to the character of a prospective tenant.
Whoever you may be letting to, always carry out comprehensive tenant vetting. It is essential to avoid nightmare tenants.
Rookie DIY landlord mistake number two – Helping your tenant out of a financial hole
The landlord in question is obviously a caring landlord. Unfortunately, they are also one who doesn’t understand the financial rules of being a landlord.
When the tenant first moved in, she was caught with Universal Credit problems. This was just before Christmas. What did the landlord do? Well, they didn’t want to see the tenant’s little lad have a miserable Christmas, and so let the tenant off a few hundred pounds’ rent.
“What a good human being,” I hear you say. And this is probably true. However, as many DIY landlords have found out to their cost if you give an inch, it usually costs you a mile. (You might like to read our article “Why successful landlords never let to tenants on benefits” to find out more.)
If you want to help a good tenant financially, by all means, you can do so. Never let them off their financial obligations entirely. That rent is your money, and you are in business.
Rookie DIY landlord mistake number three – Thinking the tenant will turn good
Letting the tenant off a few weeks of rent wasn’t the end of the landlord’s financial problems with the tenant. Over the next few months, the tenant was late paying her rent on several occasions – and not just by a few days.
What the landlord should have done was issue a notice to quit. Instead, the landlord gave the tenant a new six-month tenancy agreement!
That was in July. Within a few weeks, before the end of July came, the tenant phoned the landlord to complain that the cooker was no longer working. The landlord arranged to have a new cooker delivered by a well-known retailer.
The cooker was delivered, but the retailer could not fit it, as they said there was a fault with the electricity. The landlord arranged for the electricity company to come and inspect. They did so and said there was no problem with the electricity.
So, the landlord rearranged for the retailer to install, but they could not do so for a week and a half. The tenant shouted and screamed at the landlord, and she said to cancel the fitting as her brother was an electrician and she would get him to do it.
Rookie DIY landlord mistake number four – Letting the tenant arrange works
Now the story gets more interesting. The tenant couldn’t get hold of her brother. (I have a feeling I know why!)
With no other course of action open to her, the tenant picked up the phone to the landlord. She started screaming and shouting that she couldn’t contact her brother and she wasn’t prepared to wait any longer. She demanded that the landlord arrange for an electrician to visit immediately.
Within a few minutes, she was back on the phone, demanding to know when someone was coming to fit the cooker. Then she told the landlord not to bother, and that she would sort it out and invoice the landlord; it never happened. So a few more precious days were lost.
Eventually, the landlord arranged for an electrician to go and fit the cooker, but not before the aggravation had caused the landlord to be sent home from work because of the stress.
Rookie DIY landlord mistake number five – Sending tradespeople on wild goose chases
The tenant complained to the landlord that the boiler was making loud noises. The landlord had a technician visit and check the boiler. There was nothing wrong.
The next day, the tenant called to say that the pump had broken. The same plumber went back. Nothing wrong.
The day after, the tenant made the same mistake. The technician refused to go out. So, the landlord arranged for a different plumber to visit. Everything was fine.
A day later, the tenant made the same complaint. The pump wasn’t working. The second plumber revisited. Nothing wrong.
Now, the landlord has two plumbers who both refuse to go back to the property while the tenant is still there.
Rookie DIY landlord mistake number six – Not heeding the warning signs
Once you have made that first mistake of not vetting a tenant properly, you’re on a slippery slope. The warning signs were all there. Continual complaints, late rent payments, crying money problems to avoid paying rent before Christmas.
Now, with five months left on the tenancy agreement, the tenant has said she will not be paying any more rent. And, she has blocked the landlord’s phone calls and texts. The landlord can’t even get hold of their tenant!
The landlord wishes they had paid for property management
The landlord is facing another five months, at least, of having a nightmare tenant. One who is refusing to pay the rent, and who cannot be contacted. I fear that the landlord will need to take the legal route to evict, and they should do so as soon as possible. They will probably have a large repair bill to pay, too.
All this could have been avoided if only the landlord had been prepared to pay a property manager to look after their investment. One that vetted tenants properly before letting a property. One that has the experience to know when enough is enough, and that a tenant shouldn’t be offered a new tenancy agreement.
The landlord wishes they had done this. They have approached two property managers and asked each to take on the property. Both have refused. Each has said that due to the result of their checks, they would not have let the property to the current tenant.
If you are adamant that being a DIY landlord is the best strategy for you, then I wish you good luck. I really mean it. I don’t want to see any landlord get ripped off – which is why we set up Ezytrac. So that all landlords can benefit from our experience, processes, procedures and systems, and avoid the mistakes made by so many DIY landlords. Isn’t it time to contact us at +44 0 1522 503 717 to discover the benefits of effortless property management?
Live with passion,