So many landlords and property investors only talk about their successes, staying silent about their mistakes. However, I think it’s good for us to share what we’ve learned so far.
After each project, we should reflect what went well, and what might have gone better, if we’d approached it differently.
When I bought my first buy to let in 2019, the above Victorian house, I thought I had it covered. After all, I’d been an accidental landlord with a property I already owned, and that had gone well. However, I made a number of classic newbie buy to let landlord mistakes.
I’d got the basic fundamentals right: good size and layout in a popular location with high demand from renters. The mistakes I made were more of the “how” rather than the “what”. What I mean about this is how I went about things.
In this blog post, I fess up about what I got wrong with my first buy to let, and share what I do differently now. I hope that being open will help others learn from my mistakes as they go about their journey as a landlord!
My 5 biggest mistakes at a glance
Mistake 1: Being in too much of a hurry
It might be surprising that I think my number one mistake was that I was in too much of a hurry. Normally it’s the other way around, with landlords getting into financial trouble because of mistakes leading to delays. Let me explain why I think this earned its place as number one.
When I bought my first buy to let property, a pretty Victorian house in Maidstone, I was anxious to let it as soon as possible, so it would produce an income. It had been let by the previous owner, and seemed to be in fairly good condition. I appointed letting agents the day after completion, and asked them to start viewings straight away.
However, what I’ve since realised, is that I should have taken a bit more time to get to know the property and refurbish it, while it was empty. I did a few things, like repainting the exterior woodwork and taming the neglected garden. But, with hindsight, I should have done a more extensive refurbishment, taking time to replace carpets, put an extractor in the bathroom and redecorate it throughout internally.
I’ve been playing catch up ever since, bringing it up to the same standard to the properties I’ve bought since, which I did refurbish. I’ve replaced the carpet, put insulation in the loft and cellar (suspended floor) and have replaced some of the windows.
Doing these few improvements has been difficult, as the family living there complained about the dust and upheaval. Even though it improved the house for them and they’d agreed to it. I’ve learned from this and will decorate the rest of the house when they choose to move on.
Mistake 2: Under-estimating the cost of upgrade to EPC C
Legislation is planned that will require landlords to upgrade their rental properties to an EPC C, capped at £10,000, by the end of 2025.
The Victorian house also had an EPC E when I bought it in 2019. However, I admit I didn’t fully appreciate just how expensive the energy efficiency upgrades would be. If I had, I’d have deducted the £10,000 from the purchase price. Alternatively, I’d have chosen another property that already had an EPC C, or a high D.
I learned I shouldn’t rely on the estimates given in the EPC, as they’re out of date. For instance, the EPC stated that the total cost of UPVC windows would be £3,300 – £6,500. I found out cost of the bay windows for the front elevation alone would cost £6,000.
Work on improvements is also disruptive for tenants, and is best done when the property is empty. Click here for a blog post on my experiences of upgrading the energy efficiency of this property.
Based on what I know now, I’d be very reluctant to buy another house with an EPC E. I’d only consider it with substantial deduction for the cost of the upgrades and the loss of rent during the building works.
Mistake 3: Under-estimating the cost of refurbs
Under-estimating costs of refurbishments is a very common mistake for new (and not so new) landlords. Especially in these inflationary times. Until you’ve bought the property, it can be difficult to discover what really needs doing. Even with a survey.
In some ways it’s easier with a back to brick full refurbishment, as you budget to replace everything. What’s more difficult, is a project that seems only to need a light touch refurbishment, but you end up needing to do more than you originally thought.
For my most recent project, I had a list of things that I knew needed doing. However, I over-estimated what I could do myself in terms of decorating, in the time I had available. Once the property was empty after completion, I could see that every room needed decorating, and a myriad of repairs doing.
I had already budgeted for the main jobs, and the contingency went on the extra decorating. However, the following £6,000 of unexpected costs that came to light during the refurbishment:
- I thought the carpets would come up well with a good clean. Once the tenants had moved their furniture out, it was clear the carpets needed replacing: £1,500.
- The composite front door looked fine, but shortly after completion, it became clear that the door window clip in the door was broken. It had been stuck back, but it came away. This was an accident waiting to happen. Unfortunately it couldn’t be repaired or replaced, and a new door cost £1,575.
- The boiler had a current gas safety certificate, but when I got it checked, it was condemned. The gas engineer said it had never been serviced. The replacement cost me £2,200, including the Google Nest smart thermostat.
- The heated towel rails in the bathrooms looked fine, but on a closer inspection had started to rust. Another accident waiting to happen. Both needed replacing: £575.
- Replacing the rear guttering and down-pipe: £376.
- The flushing mechanisms of both loos needed replacing: £118.
Maybe I should have anticipated these? Another time, I will add an even bigger contingency to my refurbishment budget, plus an extra 10% to cover inflation. I’ll also check each of these things more closely before I exchange. That’s what comes from experience.
Take a look at my blog post to find out how to avoid the classic mistakes that landlords make when refurbishing rental properties. I also share some tips on how to minimise costs during refurbs in this blog post.
Mistake 4. Not checking the house myself between tenants
One of my tenants asked to leave her second fixed term tenancy 7 months early as she was in financial trouble. It was in March 2021, during lockdown. I agreed she could leave with one month’s notice, without insisting on her staying or paying for the remaining 5 months. She wasn’t in arrears, and I knew I’d be able to find another tenant quickly.
My mistake here was a variation on mistake #1. I was anxious to reduce the void to a minimum, so I asked the letting agents to start showing the property before the tenancy had ended. The new tenants moved in the day after the previous ones moved out. Just enough time for a contract clean, an inventory, and a quick check by the letting agent.
Efficient, I thought. Too quick, I now say.
I was away on a short break in Wales that week, which I’d booked a few months earlier, hoping the travel restrictions would end in time. They did, and I wasn’t going to cancel our holiday. Consequently, I wasn’t able not check the property myself before the new family moved in.
It turns out that there had been heavy wear and tear on the house, that didn’t show up in the check-out inventory. Disappointingly, the letting agent didn’t flag anything either. For instance, the ceiling had started coming down in the cellar. There were also lots of holes in the walls from where the previous tenant had screwed things in, without making it good.
Everything looked that much more tired than it did 18 months earlier. I’d not done my usual full landlord inspection in the previous months because of the Covid lockdowns, which meant I’d not seen the state of the property.
With hindsight, I should have waited until I could check the property myself, allowing time for repairs and redecoration, before new tenants moved in. If I’d done this, I’d have nipped quite a few new problems in the bud.
If you’re not able to get to the property yourself, you can arrange Viewber to do a full property inspection on a contract basis.
Next time I’ll allow for at least a week between renters, and not worry if it takes a bit longer. As I now self-let using OpenRent, I’ll have full flexibility over when I market the property for letting. Which leads me onto my final mistake.
Mistake 5: Using letting agents
Like most newbie landlords, I assumed I needed a high street letting agent to find tenants. They’d told me about all the checks they had to do, and had made it sound complicated.
After a couple of years, I realised I’d spent £7,650 in letting agent fees for four tenancies. I’d always self-managed (good decision – click here for how to self-manage), so these were the “let only” fees. The agents had started off pretty well, but with a change in personal, the service had drastically deteriorated. Even the basics (floor plan, professional photos, efficient deposit registration, good communication) had been lacking. It was difficult even getting updates from them.
With this poor service, it’s no surprise I began to wonder if I’d do a better job, and save myself a fortune.
I decided to use OpenRent, an online letting agent. Not only was I surprised just how easy it was to find renters without a letting agent, it was actually far less hassle. I didn’t need to phone for updates, or hear feedback second hand. It was easy doing the viewings.
I was able to answer the questions about the refurbishment better than an agent. I liked meeting the applicants and making the decision myself. It also meant I started to build a relationship with the renters from day one, rather than the letting agent handing it over.
This was such a positive experience that I’ve decided never to use letting agents again. I’ve also since become an OpenRent Affiliate.
If you’d like to know exactly how I went about it, click here for my guide to self-letting.
On the other hand if you can’t or don’t want to self-let or self-manage, here are some tips to get the best from your letting agent.
It’s normal to make mistakes when we do something new, especially when you’re a new(ish) landlord. However, the important thing is to keep reflecting on what went well, and also what we could improve next time. Sharing our experiences is part of the learning process.
Let me know in the comments what your newbie landlord mistakes were!
You may also find useful
Landlord essentials: Tips on what to get for your buy to let
How to succeed in property investing in 2023
10 problems to look out for when viewing buy to lets
How to get the best from managing agents