Do You Really Want To Be A Landlord?
Starting up and running a business demands skill, knowledge, commitment, drive and self-motivation. While it is possible to run a Spanish let from the UK many successful lets are run by local people who are prepared to put in that extra personal effort in caring for their tenants. Being a landlord does not mean undertaking the day-to-day work personally as someone else can be employed to do it. What attributes are necessary for a successful landlord?
It does help to know something about property – the structure, the design of brickwork and the general things that builders get up to. But first and foremost the idea of owning property must appeal. If you love cars buy cars. If you love mountains live there. To own property you must be passionate about it.
It helps to be businesslike and efficient, prepared to accept an element of risk, with good people management skills, a problem-solving turn of mind and the ability to respond to new situations. Better to be an extrovert, rather than introvert.
The most important business skill is to be comfortable with ‘the numbers’ when understanding profitability and risks. Be aware of legal and tax obligations. Practical skills come into it too! The more skills available the greater likelihood of keeping costs down.
The Stigma Of Rachmanism
Few landlords can compare with Peter Rachman. During the 1950s, Rachman, an expatriate Pole, bought hundreds of slum properties in the now-fashionable West London areas of Notting Hill and Bayswater, and let them out mainly to newly arrived Jamaican immigrants who found it difficult to get accommodation of any kind.
Rachman overcrowded and overcharged his many tenants, and then enforced his rule by means of hired thugs. His tenants had no recourse to the law and were in any case grateful for having a roof over their heads. Rachman, who began life as a landlord by finding rooms for prostitutes, became a multi-millionaire by this means. He has been immortalised, however, by an entry in the Oxford English Dictionary, where ‘Rachmanism’ is defined as ‘exploitation of slum tenants by unscrupulous landlords’.
To this day, anybody who buys a property to let, thus becoming a landlord, risks being called a Rachman with its word-association of evil. The term stigmatises land-lords for ever as being greedy, exploitative and amoral. Even the nicest landladies can sometimes hear themselves being called Rachman.
There may still be some mini-Rachmans in existence, as no amount of legislation can thwart those who are really determined. Today’s typical landlords are most likely to have one or two rental properties, furnished with as much care and taste as their own home who are looking to make a safe, steady extra income. Present-day landlords often view their rental properties as a sideline while continuing with a day job.
Into The 90s
In The United Kingdom
The letting market has moved on from the 50s through successive legislation designed to equalise supply and demand in the marketplace, giving fairness to both the tenant and landlord for security of tenure and price inflation increases.
1957 saw the first of a number of UK Rent Acts where tenants could no longer be turned out on a whim, but were protected by law. If they felt they were paying too high a rent, or that their landlord was not keeping the place in good repair, tenants could apply to a Rent Tribunal for a fair rent that, in effect, meant a vastly decreased rent.
The fair rent decided on by the tribunal was usually considerably less than the market rent for that particular property. Rent Acts shifted the balance of power so much in the tenant’s favour that before long nobody wanted to be a private landlord. By the 1980s what remained of the private rented sector was highly undesirable as properties available for rent were usually dilapidated, dingy and in poor repair.
The 1988 UK Housing Act introduced changes intended to make the rented sector fairer for both landlords and tenants, and bring more rental properties onto the market. It gave potential landlords the confidence to start letting again by introducing the concept of the Assured Shorthold Tenancy, a legally binding agreement whereby properties were let out for six months at a time and capable of termination by either party so long as due notice each way had been given and accepted. Rents could only be increased on a yearly basis.