How to avoid illegal evictions. book

 

What is a slave? The Rat Race,

What is a slave? If you remember the main difference between people who were slaves and free people in the past was ownership. The slaves by definition did not have the right to freedom and did not have the right to ownership. They plainly were not allowed to own anything, they themselves were owned by their slave masters who bought them and possibly sold them later to other slave masters.

You can define slavery also the lack of freedom. Lack of freedom to do what you want with your time, go were you want, I shall expand this a bit more of this concept: a slave is who cannot eat what he wants, live where he wants, do the work he wants to do, someone who is not free to express freely their mind…

On the contrary if you  have ownership of your time, this is to a certain extent real estate, but not all real estate, only that type of real estate that makes you truly free financially by putting money in your pocket. . etc. Therefore if there is something that will allow all the fredoms of movement,

This is my definition: someone who does not own any property or especially assets. Someone who depends on a single earned income for a living. Remember what our overlords from the World Economic Forum want for us… what they want is that we “own nothing and be happy”. Happy slaves! In this way they can dictate whether we need forced medical procedures to keep our income, dictate any other impositions as they see fit as you normally do with cattle.

So why if you have a job you are a slave? If the events of 2020 and 2021 did not teach you nothing on your body autonomy I do not know what to say. A good number of governments decided to hold peoples’ livelihoods at ransom ” if you do not accept this medical treatment (Covid  Jab) you are fired!”. How does that feel? If you have a job to keep you going, do you see how fragile you are?

Remember our overlords who control our governments world wide have most of their wealth in real estate themselves. They control the main steam media, the education system and much more. Why would they want you in competition with them? They want you a slave, therefore “you” shall ” own nothing and be happy”, a happy slave . A happy slave of theirs!

In essence the more assets you own the less of a slave you are and the more in charge of your life you are, the less controllable and the more you will be able to own your own time. In in other words the more real estate you own the freer you are. There are no half terms.

So, do you want to get out of the “rat race” (slavery in other words), set out to own Real Estate, and own loads of it! Own as much as you can. Do not accumulate (save) currency (cash) in the bank, instead accumulate real estate, especially that real estate which is called “income property”.

The more you are in real estate the more you will learn that real estate can be a true money multiplier. No job or standard profession compares to the power of real estate.

I sincerely hope this book will help you get out of slavery and become financially free.

 

What is the purpose of this Book?

The purpose of this book is very simple:

Hrlp you undertsand the power of Housing in Multiple occupation and why they are such a powerful strategy in the UK. Iwll tell you all the tricks of the trade to create the best HMOs ever so you do not have to go though the major pitfalls.

Help you get rid of the fear of owning real estate especially the best one… the residential real estate. One of the main fears of novel or want-to-be landlords is “what if I cannot rent the property or get a bad non paying tenant?” This is one of the main reasons why many do not become landlords. Residential Real Estate in many parts of the world is over regulated and as we will see there is a good reason for it. Spoiler alert …the real reason is not to protect tenants from bad landlords…..

First of all lets us address the fear of the property not being rented. There is a very important reason for residential property to be far more valuable than commercial real estate just looking at the per square meter price. In-fact the minute you convert a commercial real estate into residential, its price goes up dramatically and you will find it much easier to get a mortgage on it. This is because residential real estate is a necessity, people need food, water and a place to live. Commercial maybe discretionary but residential is not discretionary, you can avoid going shopping but you can not avoid having a roof over your head at night.

I remember when I had just finished the refurbishment of my HMO in Nottingham in 2012. It was easier for me to rent a room than find employment for myself. And I had a master degree, I spoke 4 languages and I had a proven sales record. This taught me a very important lesson, my assets were far better financial security than myself (my own labor).

More particularly this book will focus on the eviction problem due to non paying tenants.

1 If you are already a landlord: This book will increase your residential real estate revenue by minimizing the need for formal evictions and in case of rent default manage to remove the non paying tenant without requiring in a formal eviction speedily and painlessly. In this book we will provide the correct strategies to avoid trouble tenants and in the unlikely case you have one, how to remove the unwanted tenant painlessly.

2 If you are not a landlord and you are considering investing in residential real estate, this book will dispel some of the brainwashing you have gone through TV and mainstream media in general, were our overlords are trying to scare you out of investing in real estate (effectively becoming their uncontrollable competitor), a landlord who is financially free. Remember, our overlords are landlords themselves and they do not like competition!

For over 10 years I have rented both single family homes and housing in multiple occupation and so far the maximum arrears I have had to deal with is two months. Over the period of lock-downs in 2020, when the UN imposed eviction bans , when it was not possible to evict a tenant legally because the court would not grant any eviction order I had zero arrears through my housing stock.

How is that possible?  In this book I will gift you the strategies I have used for years

1 to avoid bad tenants. I will show you how.

2 how to get rid of trouble tenants relatively quickly and without almost any major financial losses.

Why is it important as a landlord to be able to avoid expensive evictions, trouble-some tenants?

We now know very well that the system controlled by our overlords does not like to have the general public involved in the best investment there is currently in the world: Residential real estate. This is because residential real estate is the best way to get out o the rat race by making you financially independent. Our overlords (from the World Economic Forum ) would like us to “own nothing and be happy” by their own words. Owning Residential real estate will make you own your financial freedom and be very happy indeed, therefore no controllable by the elite.

Trouble tenants are the reason people are scared  to ever start in real estate and also the reason for people to sell off their housing stock to retire. In fact no landlord owning good residential real estate ever needs to sell their housing stock Ever!

 

Why Real Estate?

Real estate is the only asset glass that banks will lend on. Let me correct it, one of the few asses classes Banks will lend on. The do not lend on Stock, mutual funds etc. There are  a number of reasons for it:

1 Real estate value will never go to zero like stocks, Shares ect It will always have some value.

2 It is hard to be destroyed (except Fire)

3 It provides rental income

4 It cannot be printed into existence. Not yet…

6 it outlives you. It also outlive any of the most profitable companies you know about, do you think Facebook will be with us in 100 years? At the time of writing it is already called Metaverse and in very bad shape. On the other hand very likely your real estate will be there fore your children (if you plan tax properly of course)

The most valuable of all ids residential Real estate. This is because it is needed by people, it is not optional, people need it.

So real estate is a must for most people. You either own it or you rent it. I personally would rather own it. I still rent hotel rooms from time to time, but this is only out of necessity and convenience, but I own it with banks as partners.

So own real estate, if you do not buy some. Do not wait to buy, buy and wait once you bought it.

 

What makles real estate one of your favorite tools to get rich?

You have a job? Well if you do your inncome will stop when you stop working and and stop sumbitting to the system. Dop not get fulled about holody pay benefits etc, it is all a scam. it is not a good deal at all you are selling your life short. Mark my words your income is not scalable as there is only one of you and the income will stop as you stop working.

A trading Business. Lets not confuse you being self employed with business. A business is an entity that is capable to function without your direct daily imput. If you get out tof the business and the business collapse relaitively shorltly then it is not a business, it is a leverage of yourr capabilities. The more the business survives and strives without you the more of a real business it is. Although  different typpes of business have different potential, the general rule is that businesses have most of the time thoretical unlimited upside. There is not physical limit to the output of the business, it is dictated mainly by the demand for their products or services. If more product or servicesa re required then the business can hire more people.

Howeever there is a downside to most businesses, this is that the business no matter how good it might be it will be subhject to competition. Thereofe if the owners are not on the ball it iwill eventually collapse. Therefore almost all business do require a cetrain level of work and contstant attention from their owners. As IBM, GE, GM are now a fraction of of what they used to be all businesses will face eventual extition exspecially without the porper attention formt hge owners.

So with a trading business you have potential unlimited upside, but you never really know ehen it will get decimated.

Real Estete, and especially residential real estate is not the same. With Real estate you do the work once and get paid forever, literally, forever.  Real estate if the only asset class that allows you to work once and get paid forever despite you do anything at all . This is why it is the most heavily regulated, and controlled. However its potential is limited by the capacity of the real estate. There is usually a cap to the occupancy pf a building, unless you expand it but you cannot expand it ad infinitum.

So with residential real estate you can acquire an apartment building, have it to work and go away and work on your next project while your previous work still pays you. To this day I stell get p[aiid for work I have done in my late 20s and I will keep  getting paid unitl I pass to the next life. Is it not that amazing? Today I still receive income formt he development work I have done in my early 30s. When I am 50 I will still get paid not only from the work I have done in my late 20s , in my early 30s but also the work I have done in my 40s. Real estate is one of the best tools ever for someone who plans to become rich, truly rich. Rich meaning that no matter what you do and do not do your income will not be taken away by competition or change in the market environment. A trading business can go and will eventually go to zero but real estate does not. While your turn over with a trading business will ebvventually decline if you do not constantly innovate and pay attention, the turnover of real estate eill rarely or very unlikely ever decline.

 

 

First and foremost prevention.

An ounce of prevention is worth a pound of cure. This is true in the residential rental business, especially due to the highly regulated tenant friendly legislation in many parts of the world.

Where you invest your capital is very important. Some countries are not as tenant friendly as others. Given the option it is always better to invest where the law makes evictions easy. However things can run very smoothly also where eviction laws are very tenant friendly. If you can invest in landlord friendly countries do so otherwise this book will help you;

Tenant selection is the most important part of the equation. You need to select tenants who either have a good stable job or do have a strong Guarantor. Today in all our properties I try make sure I have a guarantor in place for each tenant,however this is not always possible. I reckon that as the writing of this book 70% of my tenants do have a strong guarantor.

Part of the prevention is have a high number of prospective tenants. In this way you can select the very best ones.  But how can you have high demand for a property? Very simple:

, 1 Great Location in high demand

2 Extremely high unbeatable standards of accommodation

3 lower prices Than t he competition.

If you have all three of these points going to you then you are guaranteed high demand and therefore you be the one who vets the tenants and not the other way round.

Location. This is very straight forward always look for buildings that are as central as possible and as close as possible to major train stations, Universities, Hospitals and large employers in general. In this way there is always a large pool of people who is potentially interested in living in your building.

Standards of Accommodation. This is also very important, because you are providing a great product that people want to live in your building. I always have steam showers, Jacuzzi, Underfloor heating in each bathroom is a minimum standard for all my housing stock. I recently started installing smart toilets , smart taps and many other features that establish true  monopolistic advantages to our housing stock.

Price. Despite all these high standards which nobody has in their buildings I make sure the price is even lower than comparable accommodation in the area.

This ensures natural high demand coupled with highest standards and lower prices. The result is almost 100% occupancy rate, low or non existent payment default and almost non existent management expenses.

 

What advantages do you get by renting the property below the rental market value. The hands off  and rent guarantee strategy.

If you have a large apartment building complex of 50 units or above this will not apply because you may have in-house management and maintenance. In such case it may be worthwhile to find strategies to maximise the rental income from each unit, however this requires very tight management control, this is of  course possible and a very good strategy. However what do you do if you, like me, have some small units scattered around the world and you do want to keep them? Remember: “real estate is forever”. So , how to retain this scattered real estate while still being able to select the best tenants and keep them.

I have premises all over the place and I want the maximum peace of mind which means guaranteed rent, low maintenance and literally no hassle. Being a real estate owner is all about having an easier life. The real estate needs to elevate your standard and quality of living in any circumstances otherwise you will need to get rid of it.

Of course all my housing stock is high standard and in sought after location which guarantees a steady flow of  high demand. The strategy I use is renting my housing stock at a lower rental market price. In other words I under-price my real estate when it comes to rent it out.  So basically what I manage to do is rent  high standard premises at a lower price (between 10 to 20%) than the going market rate and the accommodation is high standard. My accommodation is well above average standard but rented at a lower price than the average market rate for an average property. If for example a standard room in the area goes for 350 pcm, my room is rented for  320 pcm and it has a steam shower and a smart toilet and many other perks.

I do not use any letting agents, this is because they are useful only at taking money and nothing else. there is simply no reason for them to exist in my opinion. I fail to see any value they provide to anyone.  They, in my opinion, add no value to anyone, neither to the landlord nor to the tenant. All they do is place ads online (which you as a landlord can do), carry out viewings and get ongoing commission on the rent of the property for as long as the tenant is in situ. But do not worry, if something goes wrong they may fix it at a very high price, far higher than the going fair market rate. They are a real rip off and what you find is that they usually have their own housing stock they rent out, any other house or building they have in their books is extra income, so they can afford not to rent your real estate and also they can afford to lose you.  So what I have decided to do is simply pass on the commission that I would pay to the letting agents which varies from 10% to 15% to the tenants themselves. This strategy has worked wonders so far because this allows me to rent the premises at a lower price than otherwise I would need to. It eliminates waste (the useless middleman) this in turn attracts and retains more tenants.

1 attracts more tenants because the value for money is much better than other properties. This makes more people apply for your accommodation. Hence you can select the type of tenants you want. So you can discard people on benefit and those that provide low levels of guarantee. You can ask for guarantors and perform deeper levels of due diligence and if the prospective tenant gets annoyed then the

2 This strategy retains tenants. This is because tenants do know that they are getting value for money and therefore if they tried to find alternative accommodation they would not be able to get the same type of quality on the market place for the same money, they would inevitably need to pay more for a lesser standard property. Hence they tend to stay longer.

 

The Guarantor

Provided that you have a very desirable accommodation in a very useful area at an unbeatable price then you can use my trump card.

Guarantors is my trump card for ensuring peace of mind. My attitude is that if you lived in the UK and you do not have a guarantor there is something wrong with you. You may not be trustworthy, or you can be, but I am taking a chance? I had cases when people who had brothers and sisters and parents all alive and would not have any guarantor. None of their family would step in. My question is: “if someone who knows you for a long time would not trust you with a financial commitment to rent a place to live in why would I?”

Said that I assess any potential tenant one by one. At the moment in my housing stock 30% of tenants do not have a guarantor and they pay rent no issue at all!

It is not true that having a guarantor alone will guarantee that you will have no trouble. I have learned this lesson first hand a few years ago when I have rented one of my flats to two young girls . These two young girls had menial jobs, so I asked them if they could have a guarantor. They had one of their mothers to act as a guarantor. The three of them (two goirs and the mother of one of them) met me in the flat and we all together signed the contract. They were all happy and there was no sign that they would cause any issues with payments.

It only took 3 months for the issues to arise. One of the girls moved out and the one who had the mother as the guarantor decided to stay but could not afford to pay the rent. The contract was joint with a guarantor and lasted 12 months!

I was patient and gave her a little longer to pay but nothing.. she simply did not make enough money on her own. Please bear in mind that the rent was well below the market price and it was only £319 per month, it was nothing!! And yet she could not meet the payments! Unbelievable!

So at a certain point when I realized that by being patient I would have simply lost out so I decided to ask her to move out. It was not worth my time! There were tenatns who would fight to have that flat at a higher price let alone at the price she was not paying for  it at! She needed to get out and soon.

But before I told her it was best for her to move out, I called the Mother who was also the guarantor. I was very surprised at the Mother’s (Guarantor) reaction. First of all please bear in mind that I called the guarantor while I was in China. I am telling you this to let you know that in order to be managing your residential housing stock you do not necessarily need to be close by. In fact for several years I lived outside the Uk and my housing stock is spread ed all around the UK so I cannot be in the position of visiting the premises every time there is an issue.

The phone conversation went along these lines:

Me: “Madam, I am calling because your daughter is not paying the rent and she had decided to stay in the flat on her own and take over the contract, it is fine by me but I would kindly ask you to please clear her arrears.!” I assure you I did not say anything untoward, nothing that could be offensive.

The guarantor replied: “I have  no money and there is nothing I can do.”

Me :”Madam you are responsible for the rent by contract alongside your daughter who wants to live in the flat, can you please pay the arrears? She cannot continue to live in the flat without paying”

The guarantor :” She cannot afford the rent, therefore you have to claim the money from social services, go speak to them”

This was completely made up. No social services owed the rent money to me…completely made up… Also her tone was polar opposite to what it was when she met me in the flat to sign the contract.

I replied : “Madam as far as I know I do not have a contract with Social services. As long as your Daughter is in the flat the money is owed by your daughter and yourself….” To that she hengup., I tried to call immediately after, I redialed and somebody else answered:

On the phone “Hello?” A male voice replied.

Me” The line got cut off can I please speak to Mrs Smith?”

On the other end of the phone: ” The line did not get cut off , she hung up on you and please do not call again! Goodbye.” He hung up too.

That literally shocked me. It was completely unexpected.  At that point I knew the mistake I made was not checking on the guarantor. I literally did no due diligence on the guarantor at all. What I realised was that I never checked if he guarantor had a job, owned the flat or house she lived in …nothing, I just took her as a guarantor because she was a grown up and looked cordial at the time when I met her to sign the contract. This taught me a lesson which saved me from similar situations later on and in the future.

What I realised is that essentially that guarantor  had nothing to lose therefore she did not care about being sued or having people chasing her for money, this is why she did not step in to help her daughter. I realised that if she owned anything at all she would have paid immediately or have her daughter to move out in case she did not want to pay the rent.

From then on I had to treat the guarantor as if he is a tenant, meaning that I had to perform the appropriate due diligence on the guarantor too. However the advantage of the guarantor is that he/she more likely to own property (like the house he lived in or even a business). The fact  that someone owns a property is that it provides a clear indication that they are reliable, keep their financial commitment and even if they wanted to escape their debts they have a real asset that cannot move. This is a great advantage for the landlord. It is so good an advantage that If a guarantor owns a house or flat then all I do I check they really do own the piece of real estate, I then do not need to check if they have a job, what their credit file is like, affordability etc.

As you will see soon after this lesson saved me recently.

Going back to my experience, I was lucky enough that her Daughter living in my flat understood the situation. I thought of the best possible tactic to get rid of this non paying tenant. What you do not want to do as a landlord or property manager is pressing them to get out immediately, this is not a good idea in my opinion, it is best to still provide a bit of leeway. After the conversation with her mother,  I immediately called the Girl in the flat and said: “Look I spoke to your mother and she does not want to pay  your rent. Let me make this very clear, you are both liable for the arrears for the length of the contract and as long as you decide to stay in the flat. Even if you want to stay in the flat, it is not going to be a stable situation because not matter what it cannot last. Therefore deciding to stay in the flat without paying is not a very good idea for both you and your Mother. Here is what I suggest… As we both know, you are already in arrears, I am willing to give you two weeks, if you move out within these two weeks I will forfeit both contract and any arrears you have, I will even forfeit  the rent owed for these these two weeks I give you. This is a very good deal and I am sure you agree, so you have plenty of time to move out and find alternative arrangements.,,,!”

She understood. What I am sure she thought was: “if I insist in staying I accumulate arrears and my Mother will be liable for it too. After all I cannot stay here without paying, it is not going to last anyway. Do I want to do this to my Mother and myself all at the same time?” Obviously the answer was “NO.” She would not take the risk of accumulate arrears in her name and her Mother’s name. So she decided to take on my offer, which to be fair, was a very good one.

This is an approach I always take when people fall in arrears and I am sure they are not going to pay, because they do not have that ability, they are broke. So there is no point on trying to get the money of the rent back and It is detrimental to keep them in the premises, Because the same premises could be let out to a paying tenant. The best strategy is to get rid of them fast by incentivise them, while giving them the impression that they have got away with something for free at the landlord’s expense (which is true).

I always play the same card, because it has always worked. Which is “the free two weeks to vacate and if they take it  I forfeit all arrears”.  The funny thing is that so far I did not have to even meet any non paying tenant face to face to get them out. This had been arranged over the phone so far.

So her reply was, and I believe she did not even think twice about it: “I will vacate the flat within the next two weeks. I will try to make payments towards my arrears into your account” . I said nothing about the payment of the arrears, to me my goal was very clear, get her out of the flat

To be fair she moved out, well before the two weeks were up,  without causing any damage. Additionally I received very small payments from her after she was out of my flat. Obviously she was a girl of good will…

Why is this two weeks grace period important? It is very important because it provides good will in the eyes of the struggling tenant:

1 You are being accommodating and understanding but at the same time firm in communicating that the tenant owes you money.

2 It provides a great deal to the tenant, because you offer to forfeit a debt the tenant has with you. Therefore the tenant feels, and it is true , that he/she got something for nothing at someone else’s expense. In this case your expense and this is true.

3 it makes clear that if they insist in remaining in the premises then there is no more negotiation, they are being unreasonable and you will inevitably take action. Make clear that it is a matter of time but they will be out, and I sometimes (when I deem it necessary) make that very clear too. This third point is usually implied but sometimes, depending on the person and their attitude I would make this point very clear while being vague about the type of action.

After all they do not know how I will get them out, whether it is though legal means or others… (I try to leave this to their imagination, and their imagination will do the work for me).  They need to be clear that they will be out and soon! It it wise to have them to second guess you and not be sure of your next actions, make sure you are unpredictable in their eyes, this will make their imagination do the work for you. Imply the consequences but never say exactly what you are going to do. No matter what never bring up court proceedings unless they do it first. In that case there i another strategy that works very well. But we will explore it later.

Over 10 years ago I had a lodger who really upset me for a number of reasons I prefer not to discuss here, it was to do with money and other stuff….One night when I request payment we had a disagreement, but ask be excatly whatb it was about I cannot remember. I only remember that she staterted to mention rights and something of the likes, (she was a lodger so no rights whatsoever). I am telling you I got furious with her, I remember saying the exact words : “be clear about this, I guarantee you are going to stay tonight but about tomorrow I am guaranteeing nothing!”.  While very coky the previous night she vaporized before 12 am! It worked really well! To be fair I would not have changed the lock or anything, I was not prepared to do it. I always see my tenants as people who need money more htan I do, I regard myself as the bigger man so I would in reality try everything I could before changing a lock on them and placing them in an embarrassing situation.

SO use your voice firmly and use anger wisely, because these tools will work very well in most cases.

This is another very interesting story. This how i convinced  my last paying tenant to leave forthwith. I had this guy moved into one of my rooms in Lincoln and the rent was only 280 pcm including all bills . The house is immaculate and very high standard, I make sure that the rent is well below market price to make sure I can select the best tenants and keep the rooms always full (which they are most of the time). This gentleman from Romania only paid the first mimonth rent to mobe in because I do not charge deposit for most Romanians as they are very good tenants usually, he was the exception. I checked when his rent was due and never paid, I contacted him and he said he would have paid in 2 weeks and he apologised, The two weeks came and went, and he never contacted me and never paid. At that point I called him again dod not answer as expected, but please note this is an HMO and I only need to make sure I ask some of my other tenants to make sure he answer the call. SO the tenants knocked on the door and he called me back. Once he called me back I said “wait, I will call you straight back via Video call”. This was important . I wanted him to see my anger! I called him back and I said to him “you have been taking the mickey for too long, I am not going to let you rob me …understand? This I can promise my dear I will not let you rob me! So, my advise is that you get out real fast in no longer than two days! Understand?”, He retorted “yes I understand” All this was in Italian because his English was not good. While I said the above, I made sure he could see all my anger through the video call (fake anger by the way…I could not care less). As usual this was so effective he was out within the timescale allotted.

I did not do any checks on Him before he moved in because he is Romanian and I almost only had very good experience with Romanians, I may be lucky who knows.

Therefore it is better that you also have in place a strong guarantor.. When I mention a strong guarantor I mean a guarantor who Either:

1 owns a house or land. In such case I only request proof of ownership and this is it. I do not need to see any bank account statements of perform credit check or anything. The simple ownership means that the person is more than trustworthy with his financial commitments. So far no guarantor who owns a property has ever failed me. In this case the tenant may even be on benefits and I would not mind as long as they are of decent character.

2 owns a limited company. It does not matter if the limited company is new, this shows me that the person is responsible, Owning a limited company (even as an empty shell) is a strong indicator of reliability. In this case I only require the company name and perform a check on company house.

3 has a strong job and or owns a car. This is another good indicator but I start asking for payslips and bank statements.

4 If the guarantor has a low paid job I can still accept it but I would ask for bank statements, payslips and I would perform a credit check. I would also be very wary of performing as probing as possible of the tenant.

These are the checks I have used successfully. I am always of the opinion that having a Guarantor is better than no Guarantor. So even if the guarantor is not perfectly meeting the standards above I always prefer to have a guarantor.

Remember that even a poor guarantor is better than no guarantor. SO always ask for a guarantor.

 

What Makers a good Guarantor.

A good guarantor is someone who owns properties or have a UK property. This is important because, as you have seen in my story, ny experience tells me that when the s..t hits the fan and the tenant tries to misbehave in one way or another they will think about ot twice if the guarantor does own a UK property. After all the tenant can disappear but the guarantor can be sued no problem and he cannot escape. Also as we know people who own properties are more reliable than people who have nothing to lose.

So whoat do I ask from a guarantor:

Proof or wownership ( picture of land registry title, picture of building insurance policy, or mortgage statements)

Proof of address (any recent untility bills)

ID Any picture of passport of driving license will do the job

 

 

Multiple Guarantors.

Nobody in law can limit the number of guarantors for any determined tenancy agreement, so if a guarantor is not a great one, always ask for multiple guarantors. It does not cost you anything to ask. But if you get more than one guarantor you have added safety. But you may ask yourself how can you get away with asking for so much? Very simple, you are never sure you can get away with it but…. if the tenant likes and need the property then she/he will try to accommodate you. Therefore in my opinion it is always paramount to have the upper hand and have unique piece of properties in very sought after locations.

In our contracts we have space for multiple guarantors to guarantee for the same tenant. So you can have guarantor number 1  Guarantor n2 Grantor n3 etc. Guarantor n1 could be a parent, Guarantor n2 could be a cousin etc.

In case you have multiple guarantors then you would have a very strong indication that default on the rent would not occur, but most of al you would almost have the guarantee that the tenant would not take the mikey and try to stay in the premises without paying rent. There are far too many people to fall back on and the in case the tenant would try to stay without pain rent then you gar to many family member would get upset.

So remember if one guarantor may be not very good then try asking for more and you will find that if the tenant like the property they will find the guarantor, and you will find peace of mind in the knowledge that their rent will be paid on time. .

 

 

When a Guarantor not Possible, what to do?

As I mentioned earlier in the region of 30% of my tenants do not have a guarantor and they are doing perfectly fine. This is the case of those people coming from abroad , who have been in the country for only half a year up to a couple of years In this case it is perfectly understandable that they maybe struggling t o have a guarantor. Said that many foreign students do still manage to find a guarantor since they may have family in the country. So it is always better to ask anyway.

If the foreign national has been in the country for longer than 2 years I can become slightly suspicious of the foreign national who can not find a guarantor, however this does not mean that I may not accept the foreign national as a tenant without a guarantor. As a matter of fact foreign nationals are usually the best tenants you can find, generally speaking of course because there are always exceptions. In any case I always prefer to have a guarantor rather than not.

Foreign Nationals are much better renters than British:

1 they have a strong attitude to work and responsibility , This is true in the vast majority of the cases but not in all cases.

2 They do not usually have access to legal aid and other benefits therefore  in most cases they might not qualify for legal aid. This would make it hard for them to sue. However what you find is that the vast majority of foreigners are very good at keeping up with their payments.

The other case is of those who are 40 and above and do have a job. Generally the over 40s have stronger jobs than their younger counterpart (tenants int heir 20s and 30s), hence if they show that they have a very good job then I do away with a guarantor if they struggle with one. However please note that they need to have a very good stable job.

Also people ofver 40 may not have a guarantor. And this could be fine  because good tenants over 40 usually have an advanced career and a relatively higher earning power than those people who are in their 20s or 30s, therefore just their carreer alone can be enough.

Also there is something called gut instinct. Sometimes even if a potential tenant does not meet all the requirements including having a guarantor then they can be so good, you can get so many good vibes that you just know they are going to be good and pay and do not cause any issue. However beware of those who are good pretenders because there are many and unless you are certain I would advice any landlord to avoid risks because they can be costly. An empty property is better an a property occupied by a tenant who does not want to pay and insists in staying no matter what. The empty property you can let the property occupied by a bad tenant you cannot let to any good tenant until the bad apple is out.

 

Use your intuition and question a lot.

The above are the basic rules but remember at the end of the day you are always screening for good people. No good person in their right mind would want to rob you form your rent no matter what.Therefore use your common sense a,d if someone gives you bad vibes you maybe have to listen to the vibes, no matter whether they have guarantors good jobs etc.

Conversely if someone may not meet all some of the criteria but sounds like a very good person you are unlikely to go wrong.  Remember the story of the girls who had a her mother as the guarantor who did not pay for her doather. It was because her daughter was a person of good will that I did not need to go the hard way to get her out.

What I find is that I press a lot in terms of asking for guarantors, proof of earnings, bank statements etc. These things can be time consuming however the response you get from the prospective tenant is very indicative of their overall attitude. Do they complain about this level of due diligence? if yes in most cases I let them go very fast, the application for accommodation is lost on the spot.

I recently had gentleman placing a holding deposit on one of my rooms and I asked

By the way…whenever they refer to me as “MATE” their application is void, if they do not have manners they do not pass my basic test, unless they have an extremely strong guarantor who owns a UK property of limited business

 

Estate Agents and peace of mind. A fallacy.

The fallacy many landlords I know many landlords who have been burned in many ways by letting agents. You haver to understand that letting agents have real etate themselves and will priorities their own housing stock no matter what. So they will naturally try to attract the best tenants for themselves not you. They may be talking the talk but you will find that tghey do pretty much noting. They are generally slow at renting your places, they will charge you an arm and a leg for simple maintenance, if the tenants stop paying they will not care and you will need to deal with them yourself.

In turn for the non service they will take 10 to 15% for the non management of the premises. Yes the Non management, becasue when the real problems arise you will still need to deal with it yourself. They will not care. If you do not believe me try high street estate agents as a landlord and you will love them!

What you will find is that, when maintenance issues arise they will either igore them, or overcharge you for any work they manage to get done. By talking to your tenants you will likely only hear they hate your letting agents, but do not worry, if you manage the proetrty yourself they will think the same about you….

The only solutions is to create systems of remote control of the issues which will arise.

 

What is an illegal eviction?

An illegal eviction is an eviction which is enforced without a court order with or without following all the steps set out the law required to evict a tenant. In theory if a tenant refuses to leave you need to obtain a court order for the eviction and even after you have obtained the court order for the eviction has to be enforced this has to be done in a certaion wy. You cannot just show the court order and frag your tennats out…. you need the bailifs (and they cost money and time too). The entire porcedure is well set out by the law.

As you can imagine This is an expensive and time consuming exercise, all of the while you do not receive any rent.

If the tenant is forced out by any other means you could be culpable of illegal eviction. Once again this could constitute an illegal eviction, this does not mean that it is an illegal eviction. Only the court can establish that an illegal eviction had taken place and no other body like the council police etc.   In any case any illegal eviction has to be proven to have been carried out in court to be classed as such.

So understand that the only recourse that a tenant has is court proceedings against the managing agent or the landlord after the fact. Court proceedings can be expensive, meaning that the tenant may be required to pay for the legal costs upfront. But not everyone wants to pay upfront for this type of action.

Remember that although this type of court proceeding is costly to start with the tenant maybe entitles to legal aid meaning that he/she would not need to pay for any legal costs.

So you may be worried more about a DSS tenant then a tenant who is on full time employment and is not entitled to legal aid and requires to pay for this type of expense upfront. Dss tenants are those who are entitled to legal aid and they have all the time in their life to look for lawyers because they do not have much to do anyway, and they do not need to pay for any legal costs most likely.

Conversely tenants who work

1 do not have time to look for  a lowyer in the same way a someone who does not work does.

2 they need to pay for the legal expenses in full all in advance.

So they are less likely to sopend their time to spend in a lawsuit.

There are many ways to effectively evict a tenant without a court order and still do it within the law as long as they will leave on their own accord without recourse to violence or undue coehrsion. Remember words, firm and persistent attitude are very powerful tools that can save you loads of money and time in formal court proceedings. Asking politely but firmly a tenant to move out is not an illegal eviction and it is very unlikely  any court would constitute it as such. After all you are only asking very firmly and this is not considered an illegal eviction. As long as the tenant packs up his/her stuff and leaves by his/her own will this is not considered an illegal eviction. You do not know how easy it is for the tenants to move out on their own accord by simply asking for it very firmly. You have to push as far as you can within the limits of the law and you are going to be fine. Remember words are very powerful tools, if you have the right tough, fearless and firm attitude you will succeed most of the times.  You will be surprised at how quickly and easily you can resolve many evictions situations without going to court just by being very firm.

I always consider each tenant on an individual case. No tenant is the same  I always try and figure out as soon as possible if they are taking the Micky.  You normally know if they are genuine pretty easily. For example if they always paid rent without any issues for several months and then they call you to let you know they are in financial difficulties. Then it is safe to assume they are genuine and they will try their level best to pay. I always try and accommodate genuine tenants, even if I might lose out a a little. However if they start not to pick up your calls and they do what they say. But if they are not picking up the calls and not returning the calls there is no space for negotiation, they are out. Believe me my words are very powerful when I want someone out. Maybe it is my physique, my anger at being screwed over I do not know but so far I have been very effective.

Every now and then you will find a very minority of tenants who will stand their ground and try to stay in your accommodation without paying. This is despite your requests for them to move out on their own accord.  What you will find is that those people who will try and resist your verbal requests to move out usually use the same techniques:

1 they will not pick up your calls

2 once you will confront them face to face they will try to find excuses and say that they will pay part of the rent on such and such date etc. Usually, if they tried to avoid me over the phone there is no negotiation on payment terms I know they are taking the mickey so I focus directly on asking them out of the premises  as soon as possible. I negotiate only on the terms of their exit.

3 sometimes they will complain about the quality of the accommodation as an excuse not to pay to which I always reply: “I understand so please go find an accommodation you deem suitable instead of trying to stay here without paying rent.”

If you become a rent collector you will find these techniques used over and over. They are standard.

In those cases where you have established that they are taking the mickey in order not to pay their rent what I do is focus on their exit from the property and never negotiate rent payments. Negotiating rent payments with them it is going to be a nightmare going forward and you will need to evict them anyway.  For example, they say: “I will pay half the rent in two weeks” and they are already one month behind. I promise”. My reply is: I appreciate the offer, however you will have to move out. I do not want your money anymore I just want you out as soon as possible. All I can do for you since you proposed to pay in two weeks time is that you have two weeks to move out and if you comply I will forfeit the rent that you owe me. This is a very good offer. I would take it if I were you. Given the situation we are not welcome in this property so you will leave, this is for sure, we would rather you did it in an amicable way.”  It is important to emphasise the amicable way” after all the tenant , although may be aware of the law on the matter, he/she may not know for sure what you are going to do. You have to give the impression to be unpredictable, which means, they might think, you could just throw them out no questions asked. I assure you most people who do not pay rent do not live in a very peaceful state of mind, and they feel guilty unless they are sociopaths.

In case the tenant is in shared accommodation it is usually even easier to get rid of the one apple. This is because a bad payer is also usually someone who causes trouble to everybody else. They may be overly messy, plainly disrespectful etc, It is stereotypical for someone who does not want to pay rent in a shared accommodation to also be a nuisance to the other tenants. So your job is even easier, this is because the pressure for the bad tenant to move out can be also exerted from the other tenants. So as soon as you and the other tenants join forces usually the pressure for the bad apple is sufficient to give up and go. Despite the law on evictions ect, the issue is that, if there are a number of different tenants in one house, say 7 for instance, and one is causing issues to all the others what happens? Will all the others leave? This is most of the time not the case. Usually the majority of paying tenants will be on your side and come to help you get rid of the bad apple. Remember that despite what the law might say we all live in the real world and the rules of common sense apply in 99 per cent of the cases.

In all cases whatever you do make sure you find the most efficient way to encourage and incentivice the bad apple to move out on his/her own accord. Some landlords have even successfully recurse to monetary payments to convice the tennat to go. Thiis means that yes the landlord paid the tennats who did not py them to go. This is nothing I have done yet but I could see how in some cases it would not be a very bad idea.

What is illegal Eviction.

A case of an illegal eviction could be you changing the lock to the house, flat or room of the tenants and not allowing the tenant to get back in. Of course you would pack their stuff for them and leave them outside. This is a clear illegal eviction.

However there are much middle grounds, like you changing the lock with an excuse and yet  allowing the tenants back in if they ask for it. If they do not then you can prove that you have offered to give them the new keys via an email or letter message and they never got back to you. This works especially if the tenants disappear for a long period of time without paying rent. This is called abandonment.

An illegal eviction is not always going to bring you financial losses. This is very important for any landlord to realize. There are not any fines enforceable for illegal evictions. The only way to enforce compensation from a landlord is if the tenant files lawsuit in the appropriate court against the landlord for illegal eviction and he /she does correctly all throughout. A single mistake can have the whole case to fall to nothing.   Because of this this has to be done by a lawyer. The tenant himself/herself can technically file such a lawsuit in the UK appropriate court but it is very unlikely to be successful unless a proper lawyer who has experience in these types of cases is in charge of teh suit. This is very important to understand. By all means also it is important to understand is that there are many different circumstances to illegal evictions and there fe can be gray areas and attenuating factors for the landlord too.

If you look at this situation from he tenant’s point of view

What the tenant has to do is:

Look for a lawyer. This is not always straightforward but it is possible. Please note that if the tenant is working to male a living then he/she will not be having too much time to investigate the matter. The most dangerous tenats are those who are on benefits and have plenty of time in their hands. they will haver all their time in their life to look for lawyers go to court etc. PRoductive people do not want o be bothered with this, generally.

Once the tenant found the lawyer then they have to pay for the lawyer in advance unless they find a no win no fee lawyer. Usually no win no fee in this type of circumstances are not very easy to find, but not impossible. In case the tenant qualifies for legal aid then they have the upper hand, they will not need for fork out any money for the lawsuit and the case will go full steam ahead. The lawyer will be incentivised to take on the case and will hound the landlord till the bitter end so to speak. However please note that these cases anrwe not usually black or whilte and the landlord can have many defenses which can make the case harder for the tenant’s lawyer. Remember the lawyer need to PROVE the illegal eviction and depending on the circumstances this is not always easy to prove.

So in order for the Landlord to face the consequences of an illegal eviction many things have to fall into place just right. But of course this deas not mean that landlords have not been punished int he past for illegal evictions…

If the lawyer has managed to prove the case to the court and the judge is satisfied that illegal eviction had taken place then the compensation will be issued against the landlord and this can vary from 5k to 50k or more depending on the circumstances. Please note that compensation will include a percentage of the lawyer’s fees. Usually the compensation paid to the tenant will be lower than the lawyer’s fee.

There are many circumstances where there are gray areas. For example If a tenant has disappeared for a long while then you can serve appropriate notices at the address and claim repossetion though abandonment. If the tennat returns to claim the property then you have a string defence. Please note that this defence is not always valid if challenged, however it is so string that a lawyer may be discouraged by it and give up. It is always a balance of likelyhood of vicotrry and rmember that in the suit for illegal eviction the party that has to expend the energy is the tenant not the landlord. Thereofre the tennat or the tenant lawyer has to ponder whether the effort spent in order to pursue such a case is going to pay off.

I do not advocate illegal proceedings, there are many ways to convince the tennant to leave volountarily. You need to have a pair and show you mean business. This cannot be tought in a book. In all my years of renting out and managing my housing stock I never had to evict anyone throughb the courts. It was not necessary.

In theory after an illegal eviction you could be successfully be sued for amounts up to 50K plus. Brut remember it is not a straight forward process and it requires a lawyer in order to be successful in court. Please note that in the Uk lawyers are expensive and therefore if the tenant does not qualify for any legal aid there is no way they will be able to fork out the money for the upfront cost of a litigation lawer. Also see it from the tenant point of view, if they work for a living the most they can get is 5 to 10K usually , the other costs  to be paid by the landlord are made up of legal fees to be paid to the litigation lawyer. However it is not always the case that the judge would grat the landlord, or agent to pay 100 per cent of the legal fees.

Once again I am not saying you want to evict anyone illegally but what I am saying you always have to look at the situation from the tenants point of view. What is the likelihood they would even sue you? Please note that in rare cases thetre are people missing payments and mesing landlords around on purpose sso that they will lose their temper and evict them illegally. Please note that this has happenned a number of times. This has happenend to those landlords notorious for illegal evictins, the words goes around and the right people then rent one of their houses or rooms and and given the fact that they have a litigation lawyer in their family they later win hige compensations in court. They know how to collect evidence and they know all the legal process so if you are foolish to rely on illegal evictions it is a matter of time, sooner or later someone will make you pay for your past mistakes.

The ultimate rock-fort of avoiding evictions and arrears.

What you are about to see here is the best way to avoiding bad tenants altogheter so that you do not have to deal with any arrears, complaints, evictions and most other types of mees caused by bad tenants. The best way is to avoid them altogether.

Over the years after dealing with loads of tenants and being lucky enough not to need to go to court to evict any I have deviced the best way to rent residential premises on a short-hold tenancy agreements without any fear of future hustle.

The ain way i guarantee the rental income for my properties is making sure the tenants will not take the mickey. But how do I do it? Is it though credit checks? Although credit checks provide you a good indication whether the tenant is a good payer it is not a guarantee and in the long terms you will realise it yourself. There will be one or two slipping though this referencing system. This is because if they have missed payments on other accommodation it is unlikely the landlord had gone to court to obtain a CCJ against the tenant. So in souych occasions you will not filter out the smart fraudulent ones. The ones who will try all the tricks of the systems to defraud you while trying to get away with it.

You may thing that adding a landlord reference to the credit report is a rock-fort too, but it is not. I personally know people who prodided fake landlord references and did so successfully. After all a savvy fraudster will find ways to pass all these tests and secure the tennacy with all the legal rights that it entails. So when they decide to start playing you you will find yourself in hot water.

The way I have devised is securing a strong guarantor with the contract. When I mention a strong guarantor I do not mean a guarantor who has a high income although this could help. What I mean is a guarantor who owns a UK Property and or a limited business that had been running for a while. This means that unless an improbable catastrophe would ensue the rent is guaranteed. Of course this is because the guarantor will be responsible for any arrears and he has nowhere to hide like a tenant would. In the unlikely case the tenant stopped paying rent then in theory you could sue to guarantor for any arrears, win in court and the guarantor could only rely on selling all properties and businesses as quickly as possible in order not to pay. This is of course very unlikely.  Therefore this type of guarantor will literally guarantee your rent.

It is not to say that I do not accept any other types of guarantors who have a good earning income or similar, but what I mean is that I always ask for a guarantor who has a tangible assets ownership so that they cannot escape any dept accrued by the nonpaying tenant.

I had one case in which I rented a flat to two girls on a joint tenancy agreement and I had one o the girls mother to act as a guarantor. This was years ago and I though this was bullet proof. However once the

What I invest in.

So far my forcus is in investing in proerties that have the higest possible upside. For this what I do I make sure that what I invest in is:

As central as possible and

As large as possible

As cheap as possible

My recurrent dream is that I find myself in one of my buildings and I get lost in it. I find new large, enormous rooms beautifully decorated in places I hardly remember. This is because the building is infinitely huge. Lots of potential. I had this dream over and over for years now.

I guess my investment philosophy is deeply ingrained in my subconscious for some reason.

The reason to be central is obvious. You find Starbucks, MacDonads and several other large brands in the centre and close to the centre, this is because this is where the action is going on . The same applies to the big brand hotel chains.They are there ans you should be there too.  Central locations attracts tenants just because of the location. Central location means safety!

As large as possible does give you upside. A large building owned by one person has a higher intrinsic value than a small building per square foot in my opinion. This is because you have control of a large building all in one area. Look at the hotel chains, they all have high number of rooms and they are in large buildings. This is because being large allows you economy of scale there fore it is an upside in its own merits.

Cheap price is essential. This is because this will allow you room for development. The cheaper per square foot the more development you have room for and therefore  you have room for added value to the property.

 

 

Are residential housing investments still worthwhile despite the regulation? 

The increasing amount of regulation in the residential housing market is discouraging most newbie investors, however it certainly does not discourage me at all. Neither does it discourage the institutional investors, it does not discourage banks either.  Remember BIG money is tied to real estate in general as well as residential real estate.  This is because residential real estate is one of the most valuable investment vehicles (depending on cost and cash flow of course). This is because despite all the ups and downs of the economy people will need food , water and shelter no matter what. The human being cannot escape this fact despite the state of the economy. Therefore residential real estate is an excellent investment in general.  It is hard to take  away the demand for a comfortable place to live at a good rental price and it is hard for the price of a building to go down to zero.

As we have seen residential real estate is full of regulation. We have also seen how evictions for rent arrears are potentially very time consuming, expensive and you could end up losing rent for over a year if you are sloppy. As we have seen above there are many ways to minimize this likelihood. But in reality how much do landlord lose out in this game due to regulation? Is this increasing regulation making the prospect of becoming a new landlord not viable? The answer is, of course, “it is always much better to be a landlord than not being a landlord!”

How can I say that? It is simple, remember, “the game is rigged”. All the regulation is designed to do is to discourage the small player so that the bigger ones have more opportunities, and this is done in the guise of protecting the tenants. In other markets regulations designed to protect the monopoly of the big players ares also similarly pitched as ways to protect the consumers.

Remember that all the big money are in real estate and the rules are written for the big money power structures. And all the big money structures and families put most of the wealth in residential real estate. Therefore the same people that write the rules are the same people that invest in real estate. Now, these rules, in my opinion, are made to discourage the small investor. For example the teacher, firefighter, police office etc who want to invest on the side for his/her pension. If you have a full time job it is difficult for you to deal with these regulatory intricacies especially as a small landlord who does this as a side hustle for a small future pension. Remember, most people crumble at the first sign of hardship this is why they are employees in the first place. Therefore a small amount of regulation is usually enough to discourage the average guy.

Obviously ,these eviction laws are not there to protect tenants, are there to preserve the monopoly for the big money and prevent the little guys to get into real estate.It is quite clear why these are not rules to protect the tenants. Lets say, the eviction could be shortened to 2 months from rent arrears and without the need for a court order. All of the sudden, renting premises would be very easy, there would be less or no  background checks on the tenants and if you wanted to become a renter you would have an easier life renting higher end accommodation without great hustle. More small investors would get into the property game and more accommodation would become available and the real estate price would be pushed up. This is not speculation this is what always happens when you get rid of regulation and red tape. The market flourishes and customers ultimately win!

In reality what happens is that people want to pay for their accommodation, and generally you will not have issue with payments for most average accommodation. This is unless the accommodation is horrible and can only be rented to scumbags, but even in such case there is the government that steps in with a bunch of housing benefits so you would generally get the rent anyway. So in general it is always much better to be a landlord than not being a landlord, despite the amount of regulations.

Also do not be afraid of the new regulations that the government might put in place, they are generally good anyway if you focus on being  landlord, this is because at the end of the day the rules are written by people who hold their money in real estate and their only focus is to make sure their investment is safe.  So if you are not in real estate yet forget about everything and get in it. You may regret is in the short term when you have to refurbish premises and deal with builders ect, but never in the medium term, and you will love it in the long term.

In essence there is generally no safer place to put your time, money and expertise than residential real estate in my opinion. Of course you always need to be cautious in your investments and generally know what you are doing.

 

 

Will residential  real estate investments be worthwhile in the future?

The only problem would be the regulatory system and the politics. The politics to be aware of is Communism which is the most corrupt and damaging for independent investors. Communism is the highest form of egalitarianism, it is the concentration of wealth and power in the hands of the most tiny group of people where there is the greatest difference in wealth between the ruling class and the population. Regulatory powers are at their peak and trading without regulation is illegal.

If you are considering investing in a communist country you can either become wealthy beyond measure or die of hunger, there are no half measures and safeguards. But we will try to stray away from investments into communist countries which is profitable if you know how to bribe well. Bribing is a skill to be learned if you want to be doing extremely well in wealth creation even in the so called free western countries.

Apart from communism one of the policies to be aware of is rent control.

Rent control is usually brought about in the name of keeping the cost of living down but , it is not what rent control does. Rent control, like communism, sounds very good and people buy it very easily. After all  it sounds like it is only good and it acts against these greedy business owners. People love that. Rent control is easy and straightforward to advertise as landlords are very well off compared to the rest of the working class. Who from the working class does not like to get something from nothing from these rich greedy landlords? However what rent control does like communism does too, brings deprivation and squalor.

Rent control is the main threat to residential real estate. There are several legislative threats to residential investment real estate, but rent control is the one that have proven the most detrimental. They are trying to bring it back to the UK at the time of the writing of this book. However I could be wrong but it is only a way to discourage small landlords and small independent investors. Do you know how I know why? Because the big institutional investors are moving into the UK residential investment sector. So this in my opinion and time will prove me right or wrong, but I bet this is only a temporary move to discourage the small investors. If the government brings some sort of legislative rent control it is only going to be temporary, it will last just as long as necessary to keep the small independent investors out to allow space for the institutional investors to get in at low prices.

It is so incredible how well known the dire consequences to the supply of rental properties does rent control. It is well established that whenever you put rent control in place the supply of housing goes own dramatically. The detrimental results of rent control are well known despite that some puppet politicians still try to bring it forward.

What is the consequence of rent control. Diminishing supply of rental properties, clear and simple, especially the high end first and then it trickles down to the average rental property and lastly the low end rental property. As soon as the state intervenes to control the price on private rental properties this marks the end of the supply of rental properties. Rental control has been tried in many countries and at different times and the result is the same: Dereliction, deprivation  and bad neighborhoods, lack of rental properties of any type let alone the middle or high end rental properties.  The results are the same all the time with no exception. As soon as rent control is gone, supply appears again, the housing stock increases, neighborhoods improve as private investment increases.

Why is that? This is because private business is disincentivised to invest in rental real estate, therefore apartment purchase prices go down and no more builders are able to build anything profitably. This lowers the housing supply. The existing landlord do not have any financial incentive to repair and maintain their rent controlled housing stock because there is no return on investment. Hence the quality goes down. No existing landlord will be incentivised in creating prime or luxury rental property as there is a clear cap to the rental income the landlord can achieve. The net result is lowering in supply and poor housing standards. The bottom line is that like communism rental control takes all financial incentives away and the market collapses, in this case the quantity and quality of housing market. This is not conjecture, this happened every time governments tried to implement rent control, and it happened without exception.

So why do they implement such policies despite the fat that the effects are known? Likely the puppeteers what to collapse the market to get in cheap, simple! Therefore this is not a measure that can last in the long run. It usually lasts as long as required to drive the supply and the prices down.

 

Eviction bans is another way to make the real estate investment impossible, but once again do not be scared as a small independent investor. They will never make it impossible to evict tenants, this is always a temporary measure to discourage small investors, while the insiders of the institutional investors move into becoming landlords. How do I know that? Again if they banned evictions forever then the housing will have literally no value to the banks either. And the people who control  the government are the big money (banks and institutional investment banks) so there lock down eviction bans are only temporary to try and destroy small landlords who cannot afford non paying tenants,. while large institutional investment banks can afford a few people not to pay rent for a short while. Then when enough small investors have been repossessed by the banks the institutional investor s have more low priced assets to acquire. So the big guys always win because they are insiders and are large enough to whether any room. (by the way the storm is caused by them as they control the government).

In essence, look at the interests of banks and institutional investment banks, if they are getting into the residential real investment market then (because they make the rules) things Will inevitably work out very well in the long term .

Now that you know what to watch out for remember Residential real estate is where the very rich store and multiply their wealth, this is because:

1it is a commodity which is needed, shelter is needed like food and water.

2 It cannot be printed out of thin air like cash is.

3 it can be leveraged with banks money, most other investments cannot

4 it provides monthly cash-flow no matter whether you are working or not.

5 the value of the real estate you invest in will never go to zero no matter the market conditions. This is not true for stock and other not real estate investments.

It can multiply capital like no other vehicle in several different ways. So if you want to be rich get into rfeal estate the earlier the better. So if you have any cash put it into real estate and if you know what you are doing you will not regret it in the medium long run. Maybe you will regret it in the short run but not in the long run, promised!

Will residential  real estate investments be worthwhile in the future? Yes 99% of the time, unless threre is rent control implemented , but then even under rent control real estate could still be valuable.

The Risk of Development.

Development  iss one of the inherent risks of real estatge. Obviosly it is assumed you have palnning permission or prermitted development to make the changes you want. But by far the hiest risk and opporunitoes lie in the development of real estate.

This is because

1 many dirrent skils are required ito achieve the end result you want. Usually one person does not hold all the skills required so you are likely to needing to hire a number of people over time to see a project to completion. You will see people attempting to cut corners, People will let you down , some will make mistakes and take no resposibility and leav the cost of fixing their mistakes up to you and much more.

w2 the costs can spirel out of control. It is very easy to miscalculate the cosgt of a project. It is true the say thatg any project usually cost more that you think and take double as long. I have seen a nyumber of builkdings being sold by the banks at auction becasue the developers could not finish them on budget and given up hence got reposessed.

3 Surprises. Usually bad ones, as you sterto do works on existing buildings  you find that you need to knock walls down and rebuld them. Koists a are rottean and need to be repaierd. And many other unplesant surprises which are beyond your control

How to mitigate the risks of a development? Easy tight control. Never leave sirte onlyy leave if you need to go fetch materieal . Guard the site like your life depends on it, live on site if necessary. The riskks of vandals setting it on fire exists if peolpe think there is nobody tin the building. The risks of having people robbing your wires does exists too., Risks of mutiny and dabotage from your workers, and the burden of the risk is all on you so you canot afford to leave site until the mainbulk of the wprk is done and you have the building fubnctional and more imporanly occupied by paying tenants.

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