To ask for your experience as a buy-to-let landlord?

[iPaid]

I'm thinking of buying a house or two and renting them out to hopefully fund my retirement in 15 years or so.

Would appreciate any advice or sharing of experience - good and bad!

[vaticancameos]

I have sympathy with Ceyes' post. I'm classed as homeless due to a wanker landlord who has made my life a misery. So seeing posts like these are like a smug red rag to a ball. Unless you've never been in that position you have no idea how it feels. And being in the position of being able to buy a couple of houses I'm guessing you never have or will. Seeing the thread title crop up is like a flag of smug to people like us. The only good thing I have is that the bastard will be losing thousands and hopefully be stopped with his illegal revenge eviction. As a tenant I don't think it's much to ask for a pissing roof to be on top the walls.

[TinklyLittleLaugh]

I have one, bought about five years ago. I have looked at buying another but the figures don't really stack up any more, (except perhaps in the student rental sector).

I rent to a single a Mum with a disabled child who would no way be able to afford to buy the house she lives in, even if it were half the price. And she has no desire to live in a council property either; the nearby estates are very dodgy. I do repairs promptly, replace broken white goods and even replaced a shower with a bath because it was easier for her. In return she has been there five years and is a bloody good tenant.

I rather object to my morals being called into question actually.

[MrsJorahMormont]

Be aware that you can be the best LL in the world and get a shit tenant like the complete twat I have at the minute. And ignore the hate directed at LL on MN. There will ALWAYS be people who are unable or unwilling to buy for all sorts of reasons. LL provide a service. I rented for years and had good LLs; I'm a good LL in return. My conscience doesn't bother me at all. I just wish my tenant's conscience was bothered by the fact that I'm still paying my mortgage while she can't be arsed paying her rent.

[ceyes03]

My post was not harsh at all. Until you have been in the position that I was in, you have absolutely no valid opinion on this subject.

BTL landlords who buy cheap then sell on for profit at the expense of their tenants are utter scum.

[InternationalEspionage]

The UK rental market urgently needs more regulation to protect tenant security....this would also hopefully filter out the nasty and unprofessional landlords who are only in it to make a quick buck and do not give a craps about their responsibilities to tenants.

[ThroughThickAndThin01]

It's a lot of faff to be a ll quite honestly. Or it can be. Make sure you can afford it financially and emotionally.

[AnotherTimeMaybe]

OP we ve been renting out a flat in W. London for the last 7 years so here's my personal advice
Find something that has not enormous property management fees. I'm not talking about agents but for the property managers who manage the block of flats, their fees could be enormous so watch out for that.
Don't go necessarily for big money but go for a good tenant. We've had the same tenant for 7 years, he's brilliant, very clean, only asked for help a couple of times , generally good tenant and so we haven't increased rent for 7 years. Unfortunately we so have to increase soon so sadly I suspect he will move out. Personally I wouldn't increase rent every year- I wouldn't leave it as much as I did either - but every year is too much
You want to have a tenant that is there for a long time so invest in being a good and understanding landlord
Also negotiate agent fees when renewing don't accept what they give you
Finally do up the flat nicely, don't expect people to put up a rubbish flat simply cause the area is good
Good luck

[scarlets]

Your biggest assets will be good, reliable tenants so treat them well if you find them; authorise repairs quickly, keep rent increases sensible.

[Missdread]

OP, we are tenantless in three weeks and this part us extremely stressful. 13 viewings, no offers and I'm panicking about how to pay two mortgages. This part is a hassle and a stress and the fees you shell out are massive. We are on our knees struggling when it's empty. Our choice, yes, but it's not all sunshine and roses...

[TwoTwentyGowerRoad]

The extra expense for BTL LL's is only for those on 40 % tax isn't it? Those on 20% standard income carry on claiming on the profit only don't they?
Is it not also true that most BTL LLs are 'accidental' LLs, those that can't sell their home but wish to move for work etc so let instead? Not fatcats so much.
Because this country has no real industry any more (manufacturing, mines, aerospace. railway engineering etc) the housing 'bubble' is virtually all there is to keep the money bouyant and circulating so I can't see the Govt. doing anything too disruptive to the housing market in the longterm. Immigration and the 'bubble' ^^ will keep the situation so that there will always be a case of demand massively outstripping the housing stock available. I can't see this changing any day son either :(

[MrsJorahMormont]

Ceyes I'm not sure if there's any point having this conversation and it seems you've had a difficult time but your LL did have every right to sell their property if they need to, although most would try and wait to the end of a tenancy to do it. Obviously if they tried to do something illegal (e.g. put you out with a week's notice, put you out after a few months costing you lots in agency fees) then they are indeed scum.

[saltlakecity]

Ceyes - completely out of order. You disgust me. Your attitude stinks.

[londonrach]

Cries...( thanks twotwenty....we still hopeful. We fed up to the back teeth of renting. Our ll is good this time.p but its not ours. We left london as got priced out there. Hoping 4th time lucky but theres nothing on the market as everyone is trying to let out now...one day)

[TinklyLittleLaugh]

I've never paid agency fees; found our tenant word of mouth and had our solicitor draw up a contract and give us a bit of advice. We just renew it ourselves now.

We own the property outright so no worries about paying the mortgage every month and these new tax changes will make no difference to us.

[PennyPants]

We always get Tennants that stay a while because we charge below market rent, allow pets and keep the property in good repair. It's an income now as we own it outright as it will be when we retire. Then hopefully pass it to Dc.

[Maursh]

Really bad idea. I think many people really underestimate how hard BTL really is:-

1. A normal well managed pension fund will provide a diversified portfolio meaning if oil drops in price, you still have money in pharma, utilities etc. Two houses is the antithesis of a diversified portfolio - it is extremely concentrated. If house prices take a deep dip, you are screwed
   
   
2. One of the reasons property appears a good investment is that it is about the only leveraged investment the lay-person has access to. So you put down £10k, take £90k mortgage. Property goes up £10k and you have doubled your money. With the tax changes on interest, you lose this benefit if you are planning on buying them with a mortgage.
   
   
3. Property has very high transaction costs and is slow to transact compared to other forms of investment. The average settlement time is 90 days and cost 1.5% plus legal fees (sell side). Compare this to 3 days and 0.1% for shares.
   
   
4. Property is a heterogeneous asset. Two properties on the same road with same layout might have two different prices (depending on decorative state, loft conversion and so on). If a hypermarket goes up at the end of the road, you are screwed regardless of the property market in the area booming.
   
   
5. If you need a small injection of cash for an emergency you cannot sell a bedroom the way you can sell a small fraction of shares.
   
   
6. Property income yields about 3% gross in London, before maintenance costs. You can find value shares which yield 6-8% gross.
   
   
7. A property needs to be maintained, otherwise it loses value. This cost money but also either time or more money for someone elses time. London managing agents typically want 15% + repair costs for managing the property for you.

[iPaid]

Thanks for replies - have only just got a chance to look through them.

Do the new tax changes just affect those in the higher tax bracket?

[InternationalEspionage]

Twotwenty, tax changes are not actually just 40% payers; others will be tipped up but tricky to explain here, there are plenty sample calcs on line though. Also, the 10% wear and tear on furnished...replaced by actuals which are generally maybe 25% or less of that.

Additionally, for London the new non res Cgt tax burden, anticipated abolition of the non res personal allowance, plus of course new non Dom tax laws and the new residency laws in general are encourage large numbers of prime London property owners (BTL or owner occupied or owned and left empty) to rethink their position with urgency. That filters down quite quickly into non-prime segments.

It's actually quite difficult to think of further tax hits which could be made to BTL....maybe hike CGT back up to 40%...why did Labour government cut that anyway?!

[InternationalEspionage]

....thought of another one! Also anticipated: abolition of the lettings allowance for let's previously held as PPR.

PPR final exemption already cut overnight in December 2013 budget from 36 to 18 months....hmmm....btl is now possibly the most capital gains tax inefficient asset class also gives zero flexibility for inheritance tax planning.

I'll stop talking about tax now, shall I. Sending myself off to sleep

[ThroughThickAndThin01]

Nice composed arguement there ceyes. haha.

[FyreFly]

All very well to say BTL landlords are scum. But without that "scum" (who was absolutely fantastic with us when we had a rogue housemate and problems with the neighbours) I would not have had anywhere to live whilst completing my degrees. I would not have been able to take jobs in other cities.

If you get rid of private landlords, exactly where do you expect the tenants who cannot afford deposits for mortgages (or who simply might not WANT to buy) to go? I would have been royally screwed without my lovely landlords. I don't think I've ever had a bad one.

[BabyGanoush]

Ceyes, that's a bit harsh