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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

To ask about the reality of buying to let?

71 replies

ScotsHumphreys · 26/11/2016 09:56

We're considering buying a second home. I've always loved the idea of property development and we think we're in the position to try it.

Live in the north east, household income of £55k. £100k left on our mortgage and no other debts.

I'm thinking of buying a 2 bed house to do up and rent out. However people tell me it's not as simple or rosy as it sounds.

So has anyone done it and what's the reality of it?

Also, thinking DS might want to rent it from us - is that as simple as it sounds?

OP posts:

maninawomansworld01 · 26/11/2016 23:15

You don't make much money until the mortgage is paid off or you sell (and hopefully it's increased in value).

If you're looking for an income then unless you own the house outright you'll not make anything as there are lots of costs - mortgage, fees, agency fees if you go down that route, maintainence, insurance etc.

Bricks and mortar are a good inflation busting investment though, provided youmcan just let it sit there tenanted for 20 years while the rent pays the. Ortega he thenmyou have a house to sell.

Good tenants are worth looking after!

maninawomansworld01 · 26/11/2016 23:16

Renting to family is a bad idea. Don't go there.

MissSynful · 26/11/2016 23:28

We have a btl and we rent to family. We are lucky as because it is immediate family our mortgage provider has agreed to let it fall under a normal mortgage and not a btl mortgage, so we have constantly remortgaged with them! We have not had a problem with our family lodger. We always said that when he moved out (dont think he ever will) we would just sell up as dont think i could take the stress of renting to strangers.

BadLad · 27/11/2016 00:21

I rent to students. Much less hassle than renting to families. The university accommodation office acts as the middle-man.

pooh2 · 27/11/2016 00:48

Well said mollie

44PumpLane · 27/11/2016 07:04

I don't get why all BTL owners are the Devil incarnate on here.

Prior to my DH and I being together I purchased a flat for £106k, 8 years later it was worth £78k. DH and I were looking to move in together into a house, which we did.
So according to the BTL bashers I should just sacrifice £28k of equity from my flat because I bought high and the market was low at the time of me wanting to move?

How stupid do you think I am?!?

So I paid a considerable amount of money to become a BTL LL, changing my mortgage with the associated fees, notifying the service company (plus their fees), notifying the freeholder (more fees), spruce of the flat (repaint, fresh carpets throughout, professional clean so everything was literally "as new"). 8 months down the line the tenant decides to move in with his girlfriend, he's had a dog in the place and left vomit and urine stains on the carpet, note in 2 places in the. Rand new carpet, oven is absolutely filthy and kitchen covered in grease! We were able to recover some from his deposit, but not all and again replaced carpet, professional clean, repaint.

So as you can see we are totally raking it in!! We just want to hold on to the flat until it's gone back up in value.

Lots of people want to rent as it allows them freedom of movement, it's an easy way to trial a relationship. It's an easy way to allow you to live in different areas or be flexible with work.

Some BTL LL's are now facing the fact that with everything that's coming in next year it could literally get to the stage where if the base rate goes up enough (i thinknwhen we did the maths we said 2%) then I will pay more in tax than I receive in rental income for my property- it will COST me to rent out my property!!!!

So basically if you want to bash BTL LL you're talking to the wrong person here!

Ah that was a good rant!!

44PumpLane · 27/11/2016 07:05

*holes in two places in the brand new carpet

heron98 · 27/11/2016 08:08

My sister is trying to convince me to go halves on a buy to let with her.

I have said no way! One house is more than enough to handle and it just seems like a huge hassle and potential expense, especially as I am not on a huge wage.

I really don't see why people do it.

stillwantrachelshair · 27/11/2016 08:22

On the mortgage point, I think the point someone was making earlier was that if you have sufficient equity in your own home and re-mortgage that, the cash you free up by doing so may be enough to pay for the BTL outright, thus doing away with the need for a BTL mortgage.

SpookyPotato · 27/11/2016 12:46

While BTL is a valid legal option for people, they will take it. Why attack the landlords making investments and not concentrate your hate on whoever allows this if you disagree with it.

JackShit · 27/11/2016 13:04

It's morally corrupt and you know it. Ugh.

VintagePerfumista · 27/11/2016 13:09

As long as it's only morally corrupt in MNFantasyLand and not actually theft like shitty tenants who don't pay, I think most btl landlords can sleep at night.

(I rent btw, so no vested interests- but someone my dp knows has just left their 5th flat in as many years and boasts proudly about not having paid the rent for a year. Yet it's the LL who is morally corrupt. Of course )

VintagePerfumista · 27/11/2016 13:13

Any other business opportunity is fine, being a landlord not. In the MN parallel universe.

Anyone would think there was a touch of jealousy abounding that some people have managed to get a bit of money put away, and a decent enough credit rating to be able to get a btl mortgage.

I'm sure that's not the case though. Much.

whyohwhy000 · 27/11/2016 13:15

mollie123 What about the families who either want to rent or don't have the resources/credit rating to buy?

EssentialHummus · 27/11/2016 13:27

vintage - yup. My other perennial frustration on threads like these is the description of landlords as parasitic, greedy, amoral Rachman figures, to a (wo)man.

If I came on here and said that all tenants were feckless underemployed layabouts who just need to work harder/move to Grimsby/keep their legs together, I'd rightly be handed my arse on a plate. But all landlords as parasitic scum? No problem.

It's unhelpful, to put it mildly.

44PumpLane · 27/11/2016 13:40

EssentialHummus VintagePerfumista absolutely agree with you both!

As mentioned in my post earlier I'm such a terrible greedy human being I'm trying to avoid a genuine cash loss of £28k- I'm such a terrible person!

It really is only on MN that I've seen such twisted logic on this subject. Just watch a few episodes of "Can't pay we'"" take it away" to see how frequently LL's get screwed.

Yes there will undoubtably be terrible LL's, just as there will be terrible tenants!

BarbaraofSeville · 27/11/2016 14:09

Stamp duty doesn't seem to have been mentioned. I don't know the details but you have to pay extra stamp duty on a second property.

If the OP lives in the north east and is looking to buy a small-medium property to rent out, I wouldn't have thought the types of mortgages where fees of £2k every 2 years are payable would make sense - you would have to have a really big mortgage for that to be worthwhile.

Fees need to be much lower and/or the term longer to make it worth it. For a lot of people with average mortgages of maybe £100-200k, it's probably better to get a term tracker anyway - the banks have been tricking people into paying massive fees for fixed rates for fear of huge interest rate hikes that haven't been there for decades and probably aren't foreseeable in the short - medium term (economy would be totally fucked if interest rates went up to anywhere a normal level nevermind above average).

EssentialHummus · 27/11/2016 14:17

barbara yes. We are buying a family house as you all know from my multiple threads whingeing about DH. We are paying an extra £18,000 in SDLT because we're hanging on to my current flat. If you're considering BTL then SDLT needs your attention early on.

jdoe8 · 27/11/2016 15:59

It's an investment and not illegal. No one goes on about the Waitrose exploiting people!

In london people should be happy that the land owner is even letting them live there as many are bought and just left empty.

madcatwoman61 · 27/11/2016 16:23

I too do not understand the demonisation of landlords - ok, suppose there were no private landlords - for those people who do not want to buy, need to save up to buy, or who will never be in a position to buy no matter how cheap/available property is, where do you expect them to live? Landlords are slated if they do not accept tenants on housing benefit, but apparently now if they do they are siphoning off public money??

gillybeanz · 27/11/2016 16:31

Its a job like anything else where you gain money.
I think it's important to not rely on the income and treat it as a long term investment.
Gov is stopping interest only btl houses which means you need rock solid income to pay mortgages.
We have a house we rent out, but bought outright no mortgage and we also develope property to sell on.
We enjoy it and it means that I only work pt, and dh has always been pt.
We don't rely on the income although it's great to have, it's more long term and for our pension.

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