It’s all falling apart and I could do with some advice please

Hi Mark

I would describe your scenario as a "set-back", all businesses have this. This might be your first but you are not alone.

Based on what you have said you have done very well up until now.

Selling the problem property at auction makes sense to me. Every property has a value at auction, you may need to take a "hit" and it might put a dent in your profits but put that into context of your achievements so far, suck it up, learn from it and move on.

I suspect the lessons you've learned from the absconding tenant are to always insure contacts for malicious damage and theft by tenants. Report the thefts and get a crime number, then contact your insurers to see whether you were covered. The second lesson you have learned is that when you are letting to tenants on benefits, always get a guarantee from a financially stable guarantor. There are always people out there. If needs be, advertise your properties for less to increase interest and then cherry pick the best tenant. If you get a few good ones competing for the property explain that to them and tell them you have realised that you have under-priced the property and that you will accept the best offer.

In any business there are going to be things you make good money on and other that you lose money on. Learn from both sets of experiences to increase profits, reduce the risks, build the business and move forward.

I hope that helps and good luck 🙂
.

I have to say as a flat owning LL I now have an innate prejudice against FLATS.
If I could I would convert my portfolio into 2 bed terraced properties!!

FLATS are so much aggro unless they are high end like in the West End of London.
SC and GR on my flats are £1500 per year.....................................for not a lot.
You would struggle to expend £1500 per year on the upkeep of a 2 bed terrace property!!?
ROI and ROC is far better on normal housing; I heartily regret purchasing FLATS as investment properties.

Hi Mark,

You don't give a timeline of your investments, but even if they are years apart your doing well for yourself. As Mark A says "you have done very well up until now". I have not yet bought at auction but from your story I am more tempted to pop my auction cherry.
Mark A is right, just cut your losses, reflect on the situation and learn from it. Onwards and upwards 🙂

You could try social media networking to find a buyer, this will save any auction fees and could get it off your hands quicker. I won't hurt to try.

Personally, I do not invest in leasehold properties or anything with a SC or GR. Paul has the right idea.

Talk to the owners of the other flats, I expect combine value of them if all the empty flats were sold gather may be more then selling one at a time. A social landlord may even be willing to buy all of them and sort out the block.

Like has been said, try to get the other landlords in the block of 9 together and see if it can be sold as a whole or get a 'fighting' fund together to renovate it.

Here is my take on your position, it's not bad at all, you have property costs of £105,000 including refurb. and the values are all higher than the costs by quite some way, apart from the vacant one as that is the only bit that has stalled, but that can be fixed either by full block renovation or sale at auction with a low reserve.

The thing to remember about property and if you are going to play in that arena it is a medium to long term not short term investment.

So without sounding harsh, pick yourself up and dust yourself down this is not a bad position you are in.

As for taking on more debt, well only you can decide on that.

Good luck.

Jason

If you borrow with the ability to pay it back easily the extra debt could just give you the time you need to take the stress out of the situation, but it would be wrong of anyone to give you advice in isolation of all the facts as Jason said.

Best of Luck