...to consider a buy to let

[owlborn]

So, very recently DH and I came into some money. It hasn't made us millionaires, but it has enabled us to become mortgage free an an exceedingly nice house in our mid thirties/early forties and left us some money over.

The amount we have is enough to put down a 50% deposit on a reasonable flat in an OK part of our home town. The property market here is solid but not London. There is a university and a thriving rental market. We think the rent would more than cover the deposit and a bit more from our research.

The idea would be that we would get a buy to let mortgage in my name. The flat would solely be in my name and I would look after it and deal with tenants etc. This would hopefully give me a small amount of income and some security while I am a SAHM (not pregnant yet, but hoping). And in the long run it would provide investment/pension income.

I keep thinking about it but I worry that this isn't an ethical choice. I hear a lot about BTL landlords and landlords in general impacting on the housing market negatively and making it hard for people to find homes. Can one be an ethical landlord? What should I be considering?

(Practical advice also appreciated, even if it's that we don't have enough equity or DH will need to get the mortgage or have his name on it as he has a fairly decent income)

It's unethical. You won't get a balanced view amongst the richies on here.

By richies, I assume you mean anyone who isn't stoney broke! What you will get from the so called richies is more financial sense that the "have nothing and never will have" brigade.

And if it's unethical, can you explain to a "Richie" like me where students and others who do not wish to buy are meant to live? I'm guessing high rise state controlled soviet style workers' paradise apartments where the massed proletariat stand around in romantic windswept piazzas discussing Chekov!

Unethical? Would the OP investing in any other legal business be considered unethical ? I suppose you could call the banks unethical for charging double the interest on BTL mortgages tho'

I put down a deposit on a BTL property with an inheritance and whilst I'm hardly making mega bucks I'll hopefully make a profit when I come to sell which will go towards my pension.

I'll hopefully make a profit

That's the bit some people think is unethical!

It's not unethical, and if it is, it's certainly no more unethical than putting it into a private investment or pensions scheme that is highly likely to invest in companies that support unethical practices in the developing world.

Also, investing in property is not a low tax investment, so although you will be taking a property off the market that someone else could buy, you will be paying plenty of tax on it for the benefit if society, and as long as it's not left empty, someone will be being housed because of your decision.

There are risks to being a ll, as there are with any investment, but as long as you go into it with your eyes open, investing on property is probably the best of a bad bunch of options at the moment.

Oh yes, TTWK. All property is theft, and all that

I'm a lifelong renter and a socialist but I say do it and be an ethical landlord. I have a great landlord and I'm grateful for his professionalism and standards.

Oh yes, TTWK. All property is theft, and all that.

Exactly. Some people on here are so wrapped up in their crazy communist dogma that I bet they wouldn't drink Earl Grey because they think all proper tea is theft!

I shall be stealing that!!

But as an home owner I would, wouldn't I?

I think it is unethical to be a bad Landlord - but to be a GOOD Landlord in a University town would be welcomed with open arms.

I think it is unethical when you absolutely KNOW that your rent is coming out of Housing Benefit.

YANBU, despite what many on here will tell you. If you rent a well maintained property and a fair price then you are providing a service. Students in particular do not want, and cannot afford to buy. They therefore NEED rental property. As long as you are being a good landlord there is no ethical dilemma. Anyone who says otherwise needs a reality check. The only unethical landlords are the ones who rent slums out at inflated prices, particularly to those on housing benefit so they can keep raising the price and having it paid. That is BU.

You don't have to be rich to have a btl. We simply kept hold of DHs flat after we maried and moved into a house.

We used to be better off than we are now but had to sell our btl as DH was out of work for two years & we were badly in debt. The btl was going to be our pension as we had made no plans so now we are looking forward to a poverty stricken old age. We were never rich as we didn't get as far as selling for a profit, as we didnt make much on the rent anyway (being 'ethical' landlords we never charged the going rate, just enough to cover costs), but it was there for a rainy day. Sadly for us it rained about 20 years too early!

Don't assume all landlords are taking it in.

Where did all the BTL is unethical brigade come from? These are the kind of people who are one step away from chanting "all property is theft". Ignore them, go and talk to a financial advisor and consider your own circumstances. If you don't need access to some of the cash for a long time then consider the appropriate investments.

Thank you all for the advice. One thing - tenants on housing benefit. I always thought that part of being an ethical landlord was taking benefits claimants but WhetherOrNot speciifically mentioned making money from housing benefit as being unethical?

Also, apologies if the 'exceedingly nice house' line put anyone's back up. I was trying to explain why we didn't need the money to improve our own living situation. Totally made me sound like a bit of a snob though.

In response to those who said we should take the money not spent on mortgage and use that to cover me being a SAHM, that still leaves me very dependent on DH and his income as opposed to having something that is mine which is the idea of the flat. But good point on the risk of it not making money and just being hassle. Lots to think about.

Honestly, I do feel it's unethical, but I can see both sides of it and I'm not going to go down that route as it;s so well trodden already.

What I don't understand is that having just inherited enough money to live mortgage free for the rest of your life, you want to go and take on another one. Entirely in your own name.

Whether renting to people on housing benefit is better or worse than not depends on your perspective.

You could have the opinion that landlords shouldn't profit from benefits via their tenants, or you could decide that it's better to rent to people who claim HB because they have fewer options of places to rent seeing as many landlords won't accept them.

In reality, it's going to be up to your mortgage company and your insurance policy. Many BTL mortgages won't allow you to rent to people who claim benefits because if you need to evict them and they go down the homeless route with the council you'll have to go to court to get them out.

Yabu.

It is very unethical even if you don't treat your tenant s like scum.

Its speculating on a finate resource that is essential for living and pushing up the price. Why not invest in something productive?

Yabu buying into the buy to let nasty market. Im fed up arguing about this now. Each buy to let property is another property removed from the owner occupied market and each one pushes the price up.

It is unethical, the fact that sometimes a landlord's insurance does not allow renting to anyone one HB. Just hunt round for one without such a daft caveat.

It is not unethical to feel that you can use your own money in this way. You can, and should be able to do so without all of the PA shaming attempts all such threads engender.

And it is simply not true that every btl has been ripped from the hands of a potential owner occupier. Many would be owner occupiers cannot afford to buy, so they must, well, erm, rent.

Where else would anyone live when they first leave home? If they are a student? If they wanted t move around before settling down?

Or are house prices supposed to drop to such low prices that a 17 year old could afford to buy?

Or is that all a bit too logical?

Bear in mind I have never had a btl. I lived in bedsits and shared flats when single, rented houses when living with now DH, and have now, nearing 50, we have bought our first house.

Where would I/we have lived prior to wanting to settle here and buy a home? In a tent?

Pshaw!

and people wonder why prices are high and rent is going the same way

some people would like to buy but cant because prices/deposits/dont allow so they then have to rent,why do they have to rent because so many are BTL and are pushing prices up and then rent follows upwards to

YABU

TTWK - "have nothing and never will have" - I'm guessing high rise state controlled soviet style workers' paradise apartments where the massed proletariat stand around in romantic windswept piazzas discussing Chekov

How well you know us! Would the piazzas be windswept if they were surrounded by high rises though?

PettywitchinloLondon-Yabu. It is very unethical even if you don't treat your tenant s like scum.Its speculating on a finate resource that is essential for living and pushing up the price. Why not invest in something productive?

Good god, do people still think like this? It's like you've swallowed Chairman Mao's little red book.

Can one of you Trotsky wannabees please tell us where students are meant to live.

Anyone......?

Don't think anyone wants to be Trotsky - ice picks in head not being a good look and us commies are quite fashion conscious. The red book? That's an accoutrement not food.

High rises cause wind tunnels. Just saying...

Re the income you would get, don't forget that the tax you'll have to pay on the rent money will seriously eat into your profits.

Where are people who can't afford to buy meant to live?

How are are going to get a mortgage as a stay at home mum?