Buy to let with your pension pot and you'll go even greyer, says the accidental landlord

The accidental landlord warns a would-be 'granlord' to bank her cash and enjoy an easier life.

While I wait for a tardy estate agent outside a flat I want to view, I’m joined by a sprightly pensioner who tells me she is thinking of going into the buy-to-let business. “You can’t trust the banks any more,” she says. “Having my money in a savings account is giving me sleepless nights.” 

Is she kidding? She thinks that buying a rental property is safer than leaving her money in a savings account? I would have thought that investing in property is only slightly less risky than stuffing your cash in a suitcase and taking it to Las Vegas.

“I think being a landlord might be quite fun, too,” she says. I want to tell her that she will have more fun plucking her husband’s nasal hair, but decide not to burst her bubble.
She might be a very successful entrepreneur, for all I know. 

However, at the very least, owning a rental property is going to give her more grey hairs. She tells me she has already lost sleep over a flat she nearly bought, but she pulled out of the purchase because of last-minute jitters. Maybe she isn’t a natural-born entrepreneur, after all.

As the agent shows us around the property, the pensioner starts fretting over the lack of a dishwasher in the newly installed kitchen. While she’s sweating over this minor detail that will in no way affect the rental income, I’m more concerned that the “second bedroom” isn’t actually large enough for an adult bed. I cross the flat off my list.

We trot after the agent to a second property nearby. My fellow would-be investor seems keen on this one — she nods enthusiastically when the agent tells us that the flat is already let and, at the current rent, will give a yield of more than five per cent. That’s more than you’d get from most properties and it’s probably a lot more than her money is earning in the bank, but then you have to factor in letting agents’ fees, service charges, maintenance costs and voids.

While they are chatting in the living room, I sneak into the kitchen to have a word with the tenant. She puts her finger to her lips, opens a cupboard door and motions me to
look inside, where I see black mould creeping up the wall. She whispers that the electrics are so dodgy she can’t use more than one appliance at a time. “Any other problems?” I ask. Yes, she says, the water supply is “temperamental”. She explains that sometimes water comes out of the taps, sometimes it doesn’t. 

I check how much rent she’s paying and she gives me a figure of £200 a month less than what the agent told us, which means the flat will only give a return on investment of four per cent. When I emerge from the kitchen, the agent is telling the old lady the flat has “enormous potential”. Hmm - potential to send her to an early grave. 

“You might want to check out that fuse board,” I say as we leave. “Noah had a more modern one on the Ark.” 

The agent’s smile slips off his face. Serves him right for being late, giving the pensioner and I time to bond. 

I hope she will look at a lot more properties before deciding whether to part with her pension pot or to leave her money in the bank where it might not be earning much interest, but at least it’s relatively safe.


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