I'm a buy-to-let landlord AMA

[accidentallandlord]

I own four flats in and around London - AMA.

I assume you’ll rent it at a very modest rate, just enough to cover your costs kaniel, not to make a profit.

Food is a basic human need, arguably as much so or more than a home. Do we hate farmers now?

Why are landlords singled out?

Because people don't realise how pharmaceutical companies profit from sickness, but people rent and are at the mercy of a landlord or have family or friends that have stories to tell about their renting nightmares. So it's all to real and first hand rather than obscure and not so in Thier face

It used to be second hand car salesmen and estate agents

The op literally forced someone to leave their home by putting up the rent so much they could no longer afford it.

And you think it's wrong to say that's the action of a bad person?

I think landlords are particularly unethical because their tenants are buying an asset for them. With pharmaceuticals you might buy (fictious figures to make a point) £6 of pills, they make a profit of £3. Job done. But pay a landlord £600 a month, they make £300 after the mortgage/wear and tear AND THEN when the mortgage is paid off they own the property and can either make more money continuing to rent it out or sell it. So your money has bought them an asset you could have bought yourself if you'd had the deposit money and met mortgage eligibility criteria.

Plus the ethics (or lack thereof) of forcing people to move by rent rises, taking homes out of the market and possibly driving up prices etc.. And that's without considering unscrupulous landlords who let out unsafe places etc..

No question but as a fellow business owner/ sahm I think you've answered questions very reasonably and come across like a far better landlord than I've ever had.

I’m an accidental landlord (I inherited a flat in London). I don’t have a mortgage on it so the tenants aren’t buying it for me - does that make a difference?

Marmite how do you personally feel about what you're doing from an ethical standpoint?

FWIW I don't think it's as bad as purposefully buying flats with mortgages then getting other people to pay the mortgage for you, but it's still taking a property out of the market for someone else to potentially own. And by renting from you you'll benefit from any property value increases, not the person who is there day to day.

Btw as I said before I'm not having a go at any particular landlords! I just hate the system. It's one of the many ways the rich get richer and the poor get poorer and inequality grows.

"And by renting from you you'll benefit from any property value increases, not the person who is there day to day"

Sorry that makes no sense. I meant:
And by renting it out you'll benefit from any property value increases, not the person who is there day to day and paying month to month.

Using the whole "hate the game, not the player" approach; shouldn't we all be pressuring the government to provide decent social housing at affordable rates rather than haranguing a single landlord on MN?

I've worked for a housing charity campaigning on this very issue. We desparately need more people campaigning on this.

TBH I think the value is likely to go down rather than up if Brexit carries on on its current trajectory.

When I inherited the flat it was in a disgusting state and had to be completely stripped back, replastered and new flooring/kitchen/bathroom etc. The tenants have been there for 5 years now, so I feel like we have done a good job really.

@tedx How long ago did you buy your properties?

I bought my first (to live in) in 2006. I lived in it until 2010, when I started renting it out.

I bought my second property in 2011, the third in 2013, and the final one in 2014.

@huty What are the properties worth in today's market?

In total probably the actual properties are probably worth about £1.2m, but £600k of that is mortgaged.

MarmiteTermite
I’m an accidental landlord (I inherited a flat in London). I don’t have a mortgage on it so the tenants aren’t buying it for me - does that make a difference?

Amazing really how many 'accidental' landlords there are. Amazing how you accidentally did it up, accidentally advertised it for rental, accidentally got landlord insurance, accidentally took money for it every month.

Instead of selling it as a probate sale, making available a property for people who might want to buy it to live in it, you consciously decided to keep it even though you already have a home of your own, and to rent it out for ongoing profit instead.

How is any of that an 'accident'?

A few have raised the issue of "tenants paying off my mortgage", and of course it's true that (hopefully) most months I make a profit from costs vs income. However, most if not all buy-to-let mortgages are interest only.

I categorically do not use the rental income to pay off capital on the mortgage - instead I am taking the risk that long term, the property value will increase and by selling one or two of them, that will pay off the mortgage on the remaining two.

The rental income is used to pay for my day-to-day living expenses, just as the person who leases you a car uses any profit to take their salary.

For those of you who are adamant that landlords are all unethical, you are of course entitled to your view. But I would ask whether you believe that all property is theft, and nobody should be allowed to profit from any type of capitalism (the logical conclusion to your argument). If this is the case, and you are full on communist, I actually admire you a little bit .

If, however, you think it's fine that it's OK to have to pay the dental hygienist £50 when they have trained on the NHS, or if it's OK to pay for petrol, or water rates or electricity, then I'm a bit confused at what the difference is.

@accidentallandlord

I think you must have missed my earlier question as you didn't respond to it.

I asked:

I have, once, failed to renew a tenancy agreement because we couldn't agree on a rent increase.

So someone had to leave their home because you increased the rent beyond a point that they could afford.

And you say

I have never kicked anybody out of their home.

Did you write that post with a straight face?

@Frazzled2207 Thank you, that's very kind. I try to act with integrity, and always ask myself the question, "if I was receiving this email/message as a tenant (or a forum user!), how would it make me feel? Would it be reasonable?"

I don't want to unnecessarily engage with a row for the sake of it, but I would like to be really clear that I have never forced anyone out of their home. The tenant who didn't accept the rent rise found somewhere else to live (closer to their place of work actually), and it was all very amicable. They had only been in the flat for two years; most of my tenants don't stay longer than a couple of years as I largely rent to the young professional market - their lives are less settled - they will leave the flat to move in with a partner, change cities for work etc.

@GorgonLondon It seems you are determined to start a row. I believe I have clarified on several occasions. If you really wish to know if I wrote the post with a straight face, no, my face is congenitally wonky, but that's an issue between me and my maxillofacial team. Thanks for asking.

Gorgon, you are assuming that the tenant couldn't afford the increased rent rather than chose not to because, for example, they could find a better cheaper flat elsewhere. I don't know which scenario is true of course, but if it was the tenant's decision then it's a bit unfair to claim they were kicked out.

@undadventuretime

"And by renting from you you'll benefit from any property value increases, not the person who is there day to day"

Yes, I can't disagree with that. That's the main reason I invested in property. But with investment also comes risk - it's me, not them, that falls into negative equity and dire financial straits if the market crashes and the rental income no longer covers the mortgage plus costs.

@DreamingofSunshine Couldn't agree more. I do my best to provide a safe, warm flat and an excellent service for my tenants, but at the end of the day, I am also looking to make a profit, just as any business would.

I would genuinely love to see more social housing built - especially in London. I have said in a previous reply how I think the Right to Buy system is mental, when it isn't supported by additional building of new social housing.

MrsWobble I'm not assuming anything. OP wrote in an earlier post that she raised the rent to a point that the tenant - who was already living there - could no longer afford. So the tenant had to move out.

How anyone can consider that an ethical or decent way to behave, and to boast about 'never kicking anyone out' because they've never actually had to serve a section 21, is beyond me.

I guess self-delusion in the interests of maximising profit is very strong with people who are that way inclined.

accidentallandlord OK, I'll try rephrasing the question as you struggled with my use of non-literal language.

Are you not troubled by any sort of conscience or moral qualms when you force someone to move out of their home by increasing the rent to a point that they can no longer afford?

@DreamingofSunshine - I agree. I think it's a bad thing that the situation was allowed to evolve like this, ie that you could have countless 'amateur ' LLs owning one or two properties, which creates a number of problems, eg

• A higher likelihood of poor management - for the most part, there is little onus on LLs to be up-to-speed on their obligations. I know, I was one myself! I tried my best and got things right luckily, but really you ought to be obliged to sign up to some kind of mailing list that alerts you to things you need to know. When I came to sell the house (which I bought for myself and lived in for 4 years before deciding to keep when moving in with now DH) it was only through my job that I happened to find out about an otherwise obscure legal judgement that would have made my notice invalid if I hadn't done it in accordance with the advice following it.
• Tenants get moved on all the time because LLs sell up - DH had moved 5 times in 6 years when I met him because of this. As most LLs just own one or two places, they are likely to sell up to release the money at some point. Not that it helps tenants, but I'm always at pains to say LLs generally don't sell so they can buy another Mercedes or some self-indulgent luxury, it'll usually be a big life reason like their family needs a larger home (as in our case), they're retiring, or divorcing, or they want to give their kids a deposit. So it's not that LLs are bastards for selling, we just shouldn't have a scenario where so many LLs are effectively quite short-termist.
• When the government comes down hard on benefits, small-time LLs who may not have a very big profit margin will quite understandably be reluctant to let to people reliant on benefits, as they will worry the government will cut benefits further/screw up payments and leave them in the lurch. Again, it's not necessarily LLs being evil bastards - they may not be able to afford the mortgage repayments for very long at all if the rent stops coming.

I don't expect anyone to get out their little violin for LLs, but I think the way things have panned out is, even when LLs do their best, be pretty unfair on tenants.