Property Hawk the landlord's homepage since 2006
Free Tenancy Agreement FREE tenancy agreement
Free Landlord Software FREE landlord software
Home | Property Manager | Free ASTs | Landlord Forms | Mortgages | Insurance | Inventory | Magazine | Landlords Bible | Directory | Forum | Training | News / Blog |

Saturday, March 01, 2014

Underperforming property investments

Any landlord with a portfolio of property is likely to have one.  Be it because they acquired in haste or even accidentally.  The property sticks out because either it's value has not performed as well as other property or it's always difficult to let and when it does the tenants always seem to be the ones that cause you problems.  What do you do?

My experience
I have just such a property.  I brought it specifically to do up and sell on (I managed to get it at a bargain prices because of ownership complications).  Just as the refurbishment was finished we hit the down turn and selling at a realistic price was not an option.  A change in my circumstances meant that it became a welcome home for several years.  However,  I've recently moved out and being a ground floor maisonette it was not at all easy to let, despite it being freshly decorated and in reasonable condition.

I did eventually manage to let the property but because I had no direct contact with the tenant having moved away it was all done through a letting agent.  I was not happy with the tenant they had found but with the security of a rental guarantor in place I  took the plunge and agreed the let.  Needless to say, a year on and the tenant has stopped paying the rent.  I hope her uncle is prepared for the fact that when it's all over and I have regained possession of my rental property he is likely to be facing a big rent bill and a size able legal bill too.  Probably not great for family relations but hey ho...not my problem.

Once I get my property back I'm faced with the problem of letting the property once again.  Having checked out the Rightmove data it's clear to me that this property has dropped over 15% in value since the peak and has suffered from the fact that there are more purpose built apartments near by which many of my core rental market clearly prefer.  So the option is to persevere and try and let out again to an unsatisfactory tenant or to get rid.  I am like many landlords incredibly stretched with other personal and business commitments and whilst the rest of my portfolio ticks along with long standing tenants I really don't need the hassle of one property and set of tenants taking up all my time.

My conclusion
It seems clear to me that at this juncture the sensible option would be to trade up.  I need to get rid of my under performing investment, pay a little extra and perhaps even drop my yield a little, but ultimately buy a more lettable property after all I have plenty of cash as my investment portfolio continues to throw out considerable rental profits.  Being a successful landlord and businessman (the two are really one of the same) is about grabbing the low hanging fruit and making life easier for yourself and this sometimes means admitting that you have the wrong property.

Landlord insurance - expert brokers - professional rates

Bookmark and Share

1 comment:

Catherine Cotton said...

Hi, have you considered selling to a tenant buyer? Could solve all your problems in one..