ASK543: My non-paying tenant just became my colleague! PLUS: Should I buy this with cash?

0:02Rob B:Hi, I'm Rob. And I'm Rob. And this is Ask Rob and Rob. Welcome to Ask Rob and Rob. It is a Tuesday and that means you have sent us two questions and we are going to give you two answers. It really is that simple. And the show works so well because you send us wonderful questions. And I'm sure somewhere rattling around in that big brain of yours, you've got a question to send our way. And Rob, it's so easy to do it. It's ridiculously easy. Go to propertyhub.net forward slash ask. That's it. And once you're there, you can record a message directly through that webpage. You can call us in and leave a voice message or you can write in and your question may appear in the Sunday Times because, yes, we have a lovely article there as well.

0:42Rob B:So whatever you prefer, we do not mind. And the first question in is from Alice. Hello. I'm not sure this is the right question to ask whether it's OK, but I'm basically not quite on the property market, but I really want to get into the property market. I currently I don't know how this will affect it like renting myself because I do not know where I want to buy like where I want to end up however I've got 600 saved up in cash and I don't know what the best thing is to do I was originally going to buy a doer upper property for around 200 to 250 and originally I was going to do this with cash however after listening to your podcast it seems like it's better in terms of this whole leverage that you talk about to get a mortgage on it would you advise this and also I was originally wanting to do like flips so do them up sell them on and do that to rent them out however listening to your podcast has obviously changed my mind now in terms of is it actually better starting having a portfolio of properties to rent out if you're in it for the long game.

1:52And in like you say, 10 years time, the property prices increase, you don't do much to it. Thank you very much.

1:57Rob B:Alice, thank you for your question. I really like this question because I'm not going to be able to just help you here, but help others as well. You are in such a similar position to thousands upon thousands of investors I've spoken to in the past, which is you're in a great position to do something because you have funds. But what you are lacking here is a couple of key steps. So you understand where you're starting from, but you do not sound like you are clear on what outcome you want from this. And you need to get ridiculously clear about what outcome you want from investing in property. Because you've talked about different strategies, different approaches, and that's the point.

2:39Rob B:Because you don't know what you want, or you've not clearly defined what you want, you can't yet decide how to get there. And I know sometimes goals can feel a bit self-developy, stuff like that, but it's so important. Rob and I do it. It's a game changer if you do it properly. So get very clear about what outcomes you want from property. If you're struggling with this, look at your future life and say, okay, for me to live this life, what will it cost me? So map out your future life and put a cost against it. You can do it, what it'll cost you per month or per annum, doesn't matter. Then you have the number.

3:19Rob B:And then you need to set what is a realistic timeframe against that number. Now, for most ambitious goals in property, you would give it at least a decade. That's the type of view you take. You don't have to, but that's generally the length of time you would take. Some people don't have that long. Some people are in the fortunate position. I think we've got longer, but only you know your circumstances and then you can start to assess your life where you're at what skills you have what available time you have because some strategies and property are really time intensive and can be like a second job so you need to understand that and then that'll start to rule in or rule out strategies that's the process you need to take now if you're a little bit nervous about that speak to other people who've been there and done this you can go to networking in groups be careful of people who just immediately try to sell you stuff if people try and say this is your strategy that you should take and they haven't asked you any questions that's a massive red flag lots of people love to force their strategy on others but they don't get to know you as the individual but you can take that approach or if it's useful you can contact property hub invest it's absolutely free you will not be sold to on that call i can guarantee you and promise you that.

4:37Rob B:So you don't need to go in with a shield up. You can go on the call, talk about your goals and they will then see if it's worth you having a strategy meeting with them. And again, believe it or not, that is free. And again, nothing is sold in that meeting. But they will be clear if it's right for you or not because they don't want to waste your time. But at the very least, by going through that process, you're going to learn a lot. So speak to experts, speak to people in your network, go to networking events and maybe check out Property Hub Invest as well. That's propertyhub.net forward slash invest.

5:12All right, some great advice for Alice there. And the thing I love about this show is we get questions that we would never otherwise think to cover. And after 543 episodes, we still get completely novel situations like this one. Hello, Rob and Rob. I enjoy your Q &A podcast as you often deal with the more unusual landlord issues. I'd really appreciate your advice on what seems to me at least a pretty unusual situation. So I'm a landlord of a small flat and I have a tenant who has paid no rent since moving in and is now almost a year in substantial rent arrears. I've obtained a possession order but the tenants remained in the property and I'm currently waiting for the bailiffs to evict him.

6:00I've never actually met the tenant because everything's dealt with through my letting agency. Unfortunately, I've got insurance which covers most of the arrears, if not all. Now comes the slightly bizarre part. I've discovered that the tenant has just been employed by the same company in the same town that I work for. I actually found out when he came to the location to cover someone else. But fortunately, I wasn't there that day. He's not aware of me and doesn't know that his landlord works for the same company, and I haven't communicated anything or made him aware of who I am. There's just two company locations locally.

6:40So although our paths haven't crossed yet, there's a realistic possibility that we could end up working together. So what I'm wondering is how you'd handled this if you were in my position. So part of me thinks it might actually be better for him not to know that I work for the same company. Knowing where he works and his employer could potentially be useful if there's any problems when he eventually leaves. On the other hand, I wonder whether there could actually be an advantage in finding out that I'm both his landlord and a co-worker. It might make him realise that this isn't just some anonymous landlord, but a real person whose property he's been occupying without paying rent.

7:22I just wonder whether that might actually make him leave the property in a reasonable condition when he eventually has to go, especially as he's got a big dog in the property. Obviously, I don't want to do anything that could complicate the possession or the bailiff process or give him any reason to make the situation more difficult. So would you tell him who you are perhaps shortly before he leaves in the hope that it encourages him to leave the property in a reasonable condition? or would you keep completely quiet, say nothing, let the bailiff process run his course and take any action at a later stage?

7:59Just interested to hear how you approach this both. Thank you very much. Mike, I should find it funny. It's not funny, but it's just such a bizarre situation. Your tenant who is behind on his rent has just become your colleague. We would never think to do an episode about this. And normally we say, well, if you're having the situation, surely lots of other people are as well. I think in this case, this probably is just you. It is so bizarre. But that doesn't mean we can't help you. We definitely can. And my strong advice here would be to say nothing. Keep completely quiet about this. And there are at least two big reasons for this.

8:33The first is that you want to go through an eviction process. And something that could very easily derail that is if the tenant says that you are harassing them in some way. Now, obviously, you wouldn't. But some completely innocent remark that you make could be spun into harassing them at their place of work. And if they do that, then they could apply for an injunction that would protect them from eviction and make the whole process drag on so much longer. So that alone is a very good reason to stay quiet. The other one is that you really don't want to intertwine your job and your property lives.

9:06Again, if you've got someone who's cornered, they're emotional, they are maybe desperate, then they could do all kinds of things. They could go to your HR department and start making any kind of claims, which would affect your livelihood and just isn't something you need. Again, it's not likely, but it is a risk. And there's really very little benefit to offset that risk. I mean, it's possible that you might make them feel bad and suddenly they pay up. But that seems pretty remote to me. What does help you, of course, is you know where they are, you know where they work. So if you do try to enforce a CCJ and get something called an attachment of earnings order, which means that basically an installment plan for the money that they owe you comes off their wages every month, then knowing where they work is a big advantage.

9:47and if he knows that and moves jobs to avoid the debt and get away from you then that makes your life substantially harder so i completely understand the temptation mike and if you do find yourself interacting with this person the temptation to say something will be strong but my advice here is to let the professionals do their work you're paying a letting agent let them earn their money let them do the work and protect yourself so mike thank you so much for your

10:09Rob B:question and best of luck so that's just done for another week thank you for listening we'll be back with the main event, the Property Podcast on Thursday. Until then, take care. Have fun. Bye-bye. Bye-bye.