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New Slum Landlord


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We have today decided to build up a portfolio of lower end properties and become slum landlords.

Seems there is the opportunity for making good profits and we'll be keeping the slum property portfolio as a totally separate company so that it doesn't interfere in any way with our normal higher end residential lettings.

The opportunity to let to benefits claimants, poor people and an even lower underclass of undesirables is there for the taking. We'll also be taking advantage of all the opportunities such as upgrading the properties with any available grants and using the Green Deal and other offers to improve capital values.....where we can.

Buying the right run down properties at the right run down prices is key and not needing to spend much if anything on decor and unecessary new kitchens, bathrooms or general fittments should improve profits considerably. With this class of tenant I guess it doesn't matter much if the plaster is falling off in places, if it hasn't been decorated for a good few years, if the garden is a tip or the rooms are small,& dingy. I can't imagine any of these tenants are particulary interested in EPC certs and I won't need to worry about fire labels on soft furnishings......there won't be any soft furnishings supplied.

We'll let you know how we get on......I'm quite looking forward to it.

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Is this for real RL? :D

Will you be joining me in a rather large country West of England and East of Ireland? :D

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Yes its for real but I'm in the south east.

We have run down, semi derelict slum property here that hasn't had a penny spent on it for 30 years or more and there are plenty of run down tenants who will be queuing up for them.

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One of the setbacks of being a slum landlord is the low rents being paid out by the local government / DSS because lets face it this is going to be your target market.

I guess you could do the minimum of a make over on them for your target tenant.

2 years ago I refurbished a very nice 1 bed house in a very nice location but the place itself needed a really good sort out of bathroom and kitchen decor etc etc. I was very surprised to get an offer from a person who wanted to take it on for 1 year before anything was actually done because it was really run down and worn out.

Hindsight being the exact science I should have taken them on and refurbished much later because I did buy this place for a knock down price.

Hey! Ho! chalk up another error in a long list of errors over a lifetime. :D

No wonder my Sunseeker yacht keeps sailing away from me.

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Well if you want any help in setting up a HB tenancy let me know.

I have a nice 1 bed garden flat where last week my tenant of 2 years has just given notice to quit, He is DSS and he has been no trouble at all but of course his rent payable is governed by the going rate for DSS rents. In this case it was £425 max. which was far too low really as 5 years ago I was getting £465 pcm and he was initially receiving £450 in DSS allowance but that was cut to £425 last year.

It will be going on the rental market for £475 pcm and I am expecting an orderly queue at the door for viewings.

Nice location and nice area as well.

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Why would you want to?

1. Attractive margins on rental income ie outstanding yields.

2. Run down property in run down areas have more potential for capital growth than more conventional property purchases. Buying the right ones in the right area which then gets an economic, social of development boost can be extremely profitable.

3. Not having to spend much (perhaps any) money on repairs, maintenance, keeping tenants happy, furnishings, keeping up with the neighbours etc etc..... can only be good.

4. I have the ideal person who can manage the portfolio.

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When I go for my next BTL I will also look at HB rates in the area.

As it is where I am at the moment the council pay between 850-870 pcm (3 bed) so I wouldn't go for a property that would demand a higher rent unless it was a steal or had other potential to make profit on. This way I have the option for either working or HB tenants.

This means any 3 bed property (could be a flat) that would normally achieve a lot less pcm is worth considering for a hb tenant. The property would also have to be good value for its price.

I try to steer clear of HMO's but I do wonder if I am missing a potential revenue stream.

I also think there is a lot of leasehold properties out there you can get for a good price if the years left on the lease is low. I puts off a lot of buyers who don't understand your rights for a lease extension which can be done during the process of the sale. A high percentage of leasehold properties that have been on the market for a long time is due to a short lease and you have a good chance of putting in a silly offer and getting it accepted.

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Bloody spam on this topic is a nuisance! I have reported it to the Mods to go through the topic and clear it all out. Let's all hope it is some time sooner rather than later..

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I reported it yesterday - they don't seem to care 2 figs!

I do believe there are no forum Mods. around at the week-end to remove the Spam Mortitia.

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We often consider our position of buying good quality housing and having tenants capable of paying the bills and the deposit. For a long time i have been aware that the financial return we get would be potentially doubled by buying rougher, cheaper properties and changing the type of tenants we look for.

Always I have rolled over and considered a damn good nights sleep the better option.

I'm no Lord Sugar, Branson etc. I enjoy what I've got and I've got enough, but I'll never have the yacht or the private Island. Horse for courses.

Dave

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