A landlord, Frank Hesketh bought a two-bedroomed property in Cemetery Road, Ribbleton, Preston, for £88,000 in 2007 with a £64,000 mortgage.He then rented it out for £450 a month to a young family.
The tenants then left after falling out with Mr Hesketh over rent, but first they left him a few little gifts, including dog excrement in the oven, obscenities on the walls and ripped up floorboards. Many thanks.
Whilst he's been trying to sell it the house has been burgled a number of times, causing further damage. Just great!
Fly-tippers have also been dumping rubbish endlessly in the back yard. Sweet!
He considered auctioning the house off after attempts to sell it through an estate agent failed but was told it would only make around £50,000.
Mr Hesketh comments“I’ll probably have to make myself bankrupt.”
This sad tale reinforces the warnings we were giving back in 2007 about the risks of investing in certain areas, not just because of the risks of capital price falls in secondary areas but also the inherent risks of renting to tenants at the lower end of the rental market.
Why not speak to the local authority to see if they'd take the property over with a guaranteed rent so they can use it to house ex-offenders etc. Just a thought?
ReplyDeleteIt is generally not worth bothering with LHA claimants for your property as there is so much hassle renting to the lower socio- economic classes.
ReplyDeleteThis as you can stand to lose everything.
You need to always be able to obtain Rent Guarantee Insurance on tenants.
Therefore buy in an area where you could attract decent tenants.
LHA claimants will very rarely be able to qualify for this insurance so the landlord is exposed to losing everything.
This as it can take up to a year to get rid of non-rent paying tenants due to the useless county court system in England.
There are more than enough decent tenants who would qualify for RGI so that the landlord can sleep easy knowing if things did go wrong his rent would be paid by the insurance.
There is an RGI policy out there which for £9 per month gives you £50000.00 cover for legal and rent costs per claim!!
If had done what I am suggesting I would not have had 2 properties repossessed due to wrongun tenants!
Learn from my mistakes!?