Are you a landlord? How do you find it?

[RainCloudsInTheSky]

We may have an opportunity to be a landlord but we are cautious about it. Does it take up much of your time? We would probably pay for the fully managed option so hoping it wouldn’t take up too much?

we’ve had a chat with estate agents and feel like we are understanding what is expected. Insurance has been recommended and I am yet to see what the cost of this may be.

would you recommend? Or wouldn’t do again? Interested in anything

OK the biggest bugbear with me at the moment are the power companies!!! have honestly spent a week trying to get an call centre in the middle of mumbai understand what I want (only wanting power put into my name for a month to allow for work before new tenant) and if they dont know how to do it go onto listening for another hour or two till eventually someone answers and they also dont know!! There is a whole barrage of testing! whole electrics every 5 years. pat testing yearly gas check yearly. epc check. legionella check. Landlord registration if you are in scotland (payable every three years.) If you take deposit in scotland this has to be put into a special government account (I dont take a deposit. Lease creation.tenant finding. You might be better interviewing tenants yourself. be prepared to have thing removed by the occasional runners, one of mine ran off with the washing machine, the freezer, the folding shower screen chest of drawers and a wardrobe!! Once you find your ideal tenant make life good for them and try to keep them. dont overcharge on rent because they have more chance or running into financial hardship then. life isnt fair for many people just now but you at least have a free asset. I keep my rents around the same as council rents. Remember agencies just try to rent it out, they dont look at how the people are =

Fantastic. I just want to look into capital gains tax then as don’t want to be in a position where I need to sell but going to lose too much money to capital gains tax. Bloody tax on everything.

I will have a small mortgage on it so need to be sure I’m doing the right thing.

I wouldn’t as a first time landlord tbh.

One of the issues is that renting is quite a political issue.
So yes Rishi has scrapped the plans but Labour could easily bring them back or a new conservative PM.
It makes planning as landlord quite difficult.

I think it depends a lot on the type of property it is (period and is it in a good state of repair) and also where it is and what type of tenant you are likely to attract (ie. are they likely to pay their rent or trash the place!). We have a flat in a very nice area of North London; the rent is expensive and the tenants all have good jobs and tend to be financially stable. We've never had any issues with anyone not paying rent. However, it's a victorian building and we have had a few issues which needed repairing. We have a fully managed service with the EA but we are still involved when things go wrong as they want your permission to spend money. It can be a little stressful, especially if you think your tenant is being inconvenienced, which is never nice. For us we are LLs because we wanted to move out for a bit and we plan to move back so we didn't want to sell. I probably wouldn't buy a property as a pure BTL investment but in our case it is a stop gap.

Avoid, we have three rental properties we bought to cover our pensions as no state pensions coming our way. We kept the rentals at 60% of local rental prices as didn't want to price gouge. One has been trashed, we tried to replace the boiler but they wouldn't install it as the house was so full of rubbish, she reported it to environmental health and now it's our responsibility to deal with the way she wants to live in it, going to cost us the bones of £10000 to fix. Second one won't let tradesman in to deal with a stairs issue but has decided to stop paying rent because it hasnt been fixed. Third haven't paid rent since May, this has previously happened but we know there are mental health issues so always let them catch up or left them away with a percentage of arrears but now we're talking where it's just not worth it anymore as they are now also letting their dogs shit all over the house. We didn't want to issue eviction proceedings as there are absolutely no rentals/council properties in our area but we've had enough. As soon as we can we're selling and the council can deal with these people. People on here like to complain about horrible landlords but we provided a roof over their head as these people will never be able to own and we treated them really well, always fixing everything quickly, not anymore, now the Council can deal with them and any problems they have are of their own making. My sympathy cup has run dry.

Broadly you would take the valuation of the property that you used for probate as your starting point for CGT. When you sell it you would take the difference between that valuation and the sale price, less any costs you have incurred which are allowable (solicitors fees, relating to the sale, for example). You don't detract and costs incurred in the course of renting it out as they get deducted from your revenue for the purposes of working out income tax on the rental revenue. Then you pay either 18% CGT or 28% CGT on the gain (less any allowable costs) depending on if you are a high rate tax payer or not. You get a small tax free allowance but as of next year it's only 3k, I think. Also I would imagine that CGT might be a good target for extra revenue raising so it could go up n the future, but then you only pay it on the gain, so it's not so bad. I would suggest getting an accountant to help you with allowable expenses from a rental / CGT perspective, unless you fancy getting REALLY familiar with UK tax legislation...

To add (just reread your post) - you don't 'lose' money on CGT as in it's only ever going be a proportion of the money you have made (ie a % of the gain), if that makes sense?

Experienced landlord here..been a landlord for 14 years. I've had really good tenants in that time but also really bed tenants.
You need to expect the bad. Regardless of the good impression you get of a tenant at first, they can change on you.

I had one tenant who suddenly just up and went out of the blue even leaving behind some of his important documents in the property (like passport, driving licence etc). It was the strangest thing because prior to this the guy was a good tenant. I only discovered he had left once I got calls from the gas, electricity companies saying payments hadn't been made in a very long time. The gas & electricity actually ended up getting cut off and I had a very stressful week sorting the house out and contacting companies where bills had not been paid.

Another group of tenants were always messging or calling me for every little thing..like how do I pay the gas bill? What's the best company to go with? It felt like they needed someone to hold their hand and talk them through every little thing..things that a landlord are not responsible for.

Last tenants I had stopped paying rent suddenly & I had to get the court involved and finally got them evicted. I ended up with a £20,000 loss though. Can't even chase them for arrears. So be prepared for this kind of thing. It has been happening more often since covid hit.

Luckily for me I now have reliable relatives renting my property & my mortgage will be paid off in 4 years so I'm at the end now. Will hopefully sell the property & buy a forever home for my family.

Personally I think it's a bad time to get into the rental market as tenants are causing so much problems these days & it's hard to get them out of your property..it literally took me 2 years to get my last tenants out!

*bad

OP I’ve been an accidental landlord previously and my Mum has previously been a LL of a small property for many years. We were both lucky it worked out fine with minimal hassle but both of us sold up in the end and would definitely not want to be a LL in the current climate.
you may well be much better off selling and putting the cash into a bond of some sort- me and Dh have around 260k in various ones and with current interest rates get around 15k a year (before tax) much easier than being a ll!!

With all due respect it sounds like you put just anybody in your properties. It would be VERY unusual for all three of your houses to go to appalling tenants if you did due diligence.

60% of market value suggests the properties aren't at a good standard, otherwise why would anybody do that? It's not 'price-gouging' to charge market rent, especially if this is meant to be your pension. As you can see your tenants didn't appreciate you giving the enormous discount anyway.

You're making a lot of assumptions. The properties are all managed through agencies, who did all the background checks etc. 4 years ago, these were just below average rents, however due to government regulations, prices in my area have doubled in that time, we decided not to raise the rents as they were covering costs and a little bit extra at the time. If we don't sell, we will be treating it like a proper business (I hold my hand up that we didn't orginally). The area we live in is not a wealthy area with a large percentage of social tenants and no council stock. When people give out about landlords taking up properties, these are people who would never be able/want to purchase. We didn't want to discriminate, however we can be a hell of a lot more fussy going forward and will definitely be treating it as a business.

My advice would be not to to do it. I'm a LL, we don't need the money but I can't imagine how stressful it must be for those who do. If your tenant doesn't pay you have to wait for 2 months before your can make an application to the court for eviction, then you have to pay to go through the courts and then the damage can be substantial. Its a minefield.

Have you looked into the financial side? There are plenty of guides online that will show you how to work out your expenses. If your using a management company be aware that they can and will use their trades that won't be the cheapest. The amount after tax may not be what you're expecting.

Then compare to the returns you would get from investing in S&S.

You are clearly not a landlord. If you speak to other landlords you will hear similar stories. It's nice to think that the world would be better without rental properties but in the current climate, people can't even get council housing so where are they meant to live?
Some tenants don't respect their rented properties and trash the place. They start off good & next thing you know they start being difficult..any excuse as well not to pay rent. If you were a landlord, would you want someone to come and trash your property? And then to stay there for free because they are not paying rent?
Landlords have many bills, tax, mortgage to pay as well. Majority of landlords do not own the property outright & are paying a mortgage so if their tenant stops paying rent then the money will need to come out their own pockets. So you are basically paying for someone to live at your property for free.

A lot of tenants are taking the p**s since covid. Using it as an excuse. My tenants claimed they were not working but a few times accidentally mentioned they were at work when I tried contacting them. Working but not bothering to pay rent and lying about it. Getting handouts from the government to pay their rent even though they were working...your taxes are paying for these people. Normal working people should be as outraged as the landlords. But instead landlords are seen at the bad guys who buy all the properties.

We’ve been LL’s for 15 years and are about to sell up and pack it in. It’s really stressful, at least it is when you want to do it right and you have an obstructive tenant. Yes you have your property investment but month to month it’s hrs to make an actual income. And with the way the wind is blowing politically they’re only going to make the job or letting property harder and more onerous, which you will take seriously if you’re legit and so cause more stress.

our tenant is winding down to the end of the lease the. We’re sprucing up with a lick of paint and sticking on the market.

Some LL are aholes tho. I've got mould in my house. That's known about before covid and still not sorted it.. they don't care

They've*

You need spare fluid cash or access to it at a drop of a hat. At least 5k ideally. The biggest pita is the tax return. Also tennants who don't pay rent and then trash the house will more than wipe out a years profit. Unless you own outright you won't make much on the rent. Our profit will be equity. Capital gains tax is a pita that I can't even figure out, but when the time comes, except to pay 40% of the house price rise in tax.

I don't, haven't and won't increase my rent in line with market rate and its mortgaged so I'm planning on selling when we come off our fix. Landlords are increasing rents by 50%. Do you the stomach for that? I don't. So my house becomes unmanagable but i was brave id wait to see what happens in a few years. To make sure your never in this situation you need to keep a close eye on market rental prices, stay in line with its growth but ideally be say a few hundred under it. Everyone of my tennants has negotiated lower rent with me. I negotiated lower management fees. Just getting your annual boiler checks when you manage yourself is a pita.

Another massive issue is guilt. I wanted to sell up for about ten years but for that I need to evict. I pray quite often my Tennant decide to leave of their free will.

If you want the highest rent you really do need a top spec house and expect lots of calls as things break a lot. My tennants are lovely but I have had really bed experiences. Like a Tennant trying to kill his partner in front of her kids and armed police response bad.

It has got me on the property ladder as I'm a Tennant too for work in a prohibitively expensive village. So yes I'd it again. But I'm 20 years in. I have made a very big Capital gain. I have all that capital growth.

If my tennants left I'd sell no question. I think over covid it felt like a gov seized asset and I didn't feel comfortable with not being able to sell up if we in turn became homeless ( not sure how accurate that was, it just felt like it was). The protection isn't on your side. So you have to be open to risk, up to taking a year to evict non paying tennants who trash the fabric of the house. I just feel things will change again and the possibility of needing to sell might be lost. That's the risk I draw my line at. But I think I'm catastrophising. Labour want to change a lot right or wrongly but it's not what I signed up to 20 years ago. Talk of right to buy under Corbin I think?

Lots more things to think about. There are new checks introduced every year it seems which needs a spreadsheet to manage. Also I need to totally refit the bathroom. Tennants just want it bodged up. Understandable I guess. But long tennants and things start to wear that are harder to access.

Yeah I'm not saying all LLs are good. Some are proper useless and waste of space. Those ones need to go. Me personally I do what I can to keep my property in good shape and deal with issues promptly.

Your LL is clearly dumb for not sorting out the mould. It's only going to damage his/her property if not dealt with. You should report them because mould can cause serious health issues.
I once lived in a flat with serious damp issues but the LL painted over the damp before we viewed the propety so we didn't realise until a few days after moving in. Some LLs are just evil. Don't care about their tenants and just want the money. Which isn't the way it should be.

I am a landlord. My experience has been very good <touch wood>

For how long if you don't mind me asking?

Yes ... I provide homes

Capital gains is 18% if lower rate tax payer and 28% if higher rate, so not 40%

We rent one to a friend from overseas, and one to a family member. Both at under market rates. Generally it’s been fine. If either wanted to move out or buy them off us we would sell them. I’d rather not have the hassle, personally.

Seven years.

I use OpenRent and interview tenants myself. People won't like the fact that I don't allow pets and would prefer to rent to a professional couple rather than other demographics given the chance, but it's my property and I need to protect the investment!