The media thinks you’re cramming 12 people into a small studio flat. The general public think you’re stealing their houses out from under them (and you’re the reason their kids won’t leave until they are mid 40’s). The government think you’re too rich to make a profit, and your vote doesn’t count.
What’s the truth about being a Landlord?
Who are we?
First off let’s just describe who most Landlords are. Hardworking, financially astute, entrepreneurial, optimistic, socially minded.
Any of those qualities sound about right? Generally speaking Landlords are the middle and upper-middle classes. They don’t own hundreds of properties, but maybe 1-5 properties that they have built up over several years of hard work and putting their money to good use.
They want to provide a good level of accommodation and service in return for a reasonable rent that will cover their mortgages and hopefully put some extra savings aside for the future. Very few Landlords actually live off their rental income profits… in fact very few Landlords make enough profit to live off them.
The vast majority of Landlords aren’t “professionals” either. By which I mean they don’t have any formal training in property or Landlord & Tenant issues, therefore will rely on the expertise of a managing agent (eek!).
And overwhelmingly Landlords are supportive and understanding of the pressures facing first time buyers and renters alike.
How did we end up as Landlords?
Usually a good healthy dose of hard work and a bit of luck. Often times it’s a former property that is kept and rented out. Sometimes it’s a property bought for kids entering university. Sometimes it’s a more planned and reasoned purchase that has been bought to supplement or provide a pension on retirement.
Whatever the opportunity that presented itself, the fact is that each and every Landlord took the decision to hold onto the property and to rent it out to someone else. Thereby providing the basic human right of shelter and providing a valuable service that appears to have stopped being the remit of the government.
Nowadays there are very few ‘accidental’ Landlords who are so far in negative equity that they don’t have the option of selling.
Why are we good people?
So, all very well and good but how does this mean you’re making a positive impact on society at large? Seems nobody else thinks you are doing.
If it wasn’t for the private rented sector, there would be 3 million properties not being rented out. Now does this mean that prices would be lower and people could afford to buy them for themselves? Well, probably some of them yes.
I’m going to use a hugely unscientific survey with a sample size of about 12 of my friends and colleagues, but around half of renters actually want to be in rented accommodation. It suits their circumstances and preferences.
I’ve already stated I rent, not because I can’t afford to buy, but because I can better utilise my money elsewhere. I’m something of a vagrant at the moment and have no real need to be in any particular location, so renting gives me the flexibility to move around when I want.
So what would happen to the other 1.5 million households that want to rent, if the PRS didn’t fill the gap? Government have stopped building homes for social tenants. Companies have stopped building homes for their workers. Institutions can’t be arsed owning hundreds of single private residences as it’s a nightmare to oversee.
So what happens? I dunno actually, but I imagine it would suck.
The PRS fills the gap for those people who have a job and don’t qualify for housing benefit – let’s not start on whether or not there are enough of them (there aren’t) – and for those who don’t want to live in a block of rented apartments within a city.
The institutions can take the job of housing those young professionals who want and need to work in a town or city centre, and probably even the older generations who need and want to live in a facility somewhere.
How about everyone else?
That group of people who don’t want to live in an apartment complex with 20 other identi-kit houses and people. Those with larger families who want some space or yearn for the countryside. People who are trying out a new area or breaking a sales chain and want to go into rented for a short period of time.
You, the small and private landlord, give people the options of living where ever they want without having to commit to buying a property and all the headaches that go with homeownership.
And due to the type of people you generally are, when something goes wrong with one of your properties, you feel personally responsible to make it right as soon as possible – but bearing in mind you aren’t made of money – will be as efficient as possible with the repair.
If the letting agent is a bit crap, that can look a lot like your Landlord doesn’t care, but chances are they just aren’t aware of the issue or problems you’re facing.
98% of the Landlords I’ve met have been nice folks. People who you wouldn’t mind being stuck on a train next to. They’d probably offer you a polo mint if they had one.
They aren’t out to screw up your or your children’s plans of homeownership. They aren’t trying to become the next Rachman or become a billionaire. They are just everyday normal people who have done well for themselves and want to take care of their family (or just themselves) in the future.
Something that if we’re honest, most of us want. In fact I’d suggest most people who bad mouth Landlords are just jealous and would invest in property as soon as they were able to if they could. That doesn’t make them bad people. It makes them human.
We’ve been let down by Government – both sides, and Capitalism for decades. (Don’t worry, this isn’t me launching a political career… or is it?!). Historically most people were housed by the Government or their employer, and then if they were very lucky owned their own property. Fortunately they generally had the good sense to die as soon as they retired so they weren’t a burden on the rest of the economically active.
As times change, everything else needs to as well. Property investment is the most recent mass marketed investment, and it fundamentally beats investing in shares or UK Government Bonds. It provides a tangible benefit to everyone linked to the property.
The owner gets rent, the tenant gets a house, the corporations get an employer in a location that suits them, the Government gets taxes (council, income, capital gains).
So why all the bad press?!
Possibly because of that 2% of Landlords who are just dicks. Who break the law, who overcrowd houses, who revenge evict, who don’t repair properties quickly and to a reasonable standard, who avoid paying taxes. So if you know one of them, tell them to sell their house and stop ruining our reputation.
So until next time, keep being good!