Feeling guilt at costing my parents £00000k

[Tead]

About 12 years my parents came into some money and were all set to buy a buy to let house until I talked them out of it. The are immigrants and so look to me to explain things - I know that sounds odd.
i thought it would be too much of a hassle for them as they were in their early 60s but I knew nothing of property.
they changed their minds and just left the money in the bank.
the house sold 3 months ago and I am racked with guilt over what I did. They would have made hundreds thousands on their purchase. It’s been 3 months and I keep waking up at night thinking about my stupidity. I haven’t told anyone about this not even my wife. I have felt close to tears many times. I know I cannot make it us to them. This just makes me feel like an even bigger loser. I haven’t spoken to them about this. I feel ashamed of myself just looking at them. They are financially ok but I feel like I’ve failed them

This. ^ It's also highly unlikely the OP's parents would have made 100s of 1000s of pounds on a buy to let house. I have literally NEVER known anyone do this. Many people make a loss actually. Some break even. Some make one or two 1000 pounds a year. 100s of 1000s of pounds on one house? Nope. Where did you get that figure from @Tead ???

They would have been paying many 1000s of pounds over the years for repairs and maintenance, and as the poster I quoted said, they would probably have encountered at LEAST one tenant, if not more, who didn't pay their rent, left with possibly three to five thousand pounds owing, (depending on how much the rent is obviously,) and would have caused your parents a lot of stress. (Then there would have been legal fees/court fees etc...)

Hell would freeze over before I would EVER buy a house to rent out. Heard far too many horror stories.

But yes, as a load of posters have said, stop beating yourself up. There's really no need. Apart from the fact they would NOT have made 100s of 1000s of pounds, they do actually have a mind of their own.

Me and DH changed our mortgage from endowment to a regular (repayment) mortgage, (circa late 1990s.) At LEAST half a dozen people informed us we were 'wrong' to do this, and we were even called 'a bit thick' by one of DH's colleagues. DH wanted to leave it as an endowment mortgage as he was easily led at the time, and felt peer pressure. Not me. I stayed firmly fixed, and said 'they can all fuck off. We're changing it.'

Guess who had the last laugh, when the vast majority of endowment mortgages crashed and burnt some 4 to 5 years later? And hilariously, the naysayers who had derided us and called us thick etc, all sheepishly changed their endowment mortgages to repayments ones!

Different issue of course, but same principle. We - or rather I didn't listen and went and did what I wanted anyway. Your parents could have done the same.

Your parents didnt buy a house as they wanted and someone else bought it and now this someone else sold it and made money out of that? Thats not not you costing your parents money, is it. I thought you were going to talk about how your parents pay for your education/house/healthcare/whatever.

Plus op landlords have had a terrible time through covid.how would they have handled that.possibly without your support?

YABU; you did not cost your parents money. They would have had to spend money on the house. They would have had to pay fees to a letting agent. They are financially OK, you've saved them a lot of stress and potentially from being ripped off.
Don't invest in areas you don't know anything about, it turns you into a sitting duck.

it was their money their choice!

My dad didn't think i should buy my current house - thought the mortgage offer wasn't a good deal - I went ahead with it anyway - He was wrong! my deal is looking pretty good right now compared to the new mortgage offers on the table and we got a good deal on the house it seems..........

So he was wrong and I was right to not listen to them

Purple butterfly wings
Of course people make lots of money on rental property. Most houses practically double in value roughly every ten years. It's called capital appreciation which is our main focus. Rent is secondary for us and we generally use quite a bit of it to update and maintain the properties. Ours are a really good standard though and we concentrate on good tenants in great properties. Occasionally one slips through the net but it is rare and isn't something that scares us. Out they go, deep cleanse, refurb and hello new tenant, paying a higher rent. People might have a problem with this but it is what it is.

My aunt and uncle were in a similar situation. In their case they inherited properties from parents on both sides, in their early sixties. One they sold, and bought a city centre apartment. Then they rented out the apartment and the house.

It cost a significant amount of cash upfront in decoration, furnishings, ensuring safety and comfort standards were met. They’re decent people and wanted to be good landlords and look after their tenants well. They borrowed money to get started.

The amount of trouble they’ve had beggars belief. The 2nd floor apartment was flooded while tenants were on holiday. They rented to students at one point who had a party and a guest defecated on the walls. Furniture and appliances were stolen. They struggled to get rent paid at times. There were gaps between lettings too. when the covid eviction freeze began they had a tenant who was already months in arrears (and had better protection from the law than they had anyway- they were also trying to be understanding) it took over another year to get him out and there wasn’t a penny paid in that time.

They sold one of the properties at a profit, on paper, but in terms of real
costs that profit is very small for a ten year investment. The other house has been on the market for over a year, and empty during that time.

In the last ten years, their health has declined. Between them they’ve had several operations, and he’s blind in one eye. They just don’t have the stamina.

My aunt’s brother advised them against it at the time. He invested in a portfolio of shares - some went up, some went down. He’s not made massive money but he’s had some nice days out at agms, made new friends, and generally had very little hassle for his dividends. My uncle’s favourite topic of conversation these days is that he wished they had listened to him.

You gave them advice in good faith Op, and it’s easy to look back with the benefit of hindsight and beat yourself up. You weren’t to know. And you could equally say you saved them from years of hassle and upset,

They didn't have to listen to you though. They could have sought

I wouldn't want to be making money from people who scrimp and save to pay the rent. They can't save up for a deposit on a home to buy because of high rent's. Buy to let have pushed property prices up. Making it impossible for young adults to get on the property ladder. It's only a matter of time until there's a property crash.

With the increase in interest rates landlords are having to pass that onto they're tenants many can't afford to pay. But majority also can't afford to save for a deposit unless they can live with they're parents. Landlords are now scrambling to sell they're properties. Well those that haven't already evicted tenants to make more money from air BnB.

Waiting lists for council properties have never been longer. There's families living in caravans and sofa surfing. But as usual the rich get richer and the poor get poorer.

'Most houses double in value every ten years?'

What the fuck are you talking about?

This is the most inaccurate statement on the thread. (On the whole forum this week probably!)

Also, I said I don't KNOW anyone who has made 100s of 1000s of pounds on buy-to-let properties. That is a FACT. I don't know anyone who has. I seriously doubt anyone does though. It's a ridiculously over-exaggerated figure. If it DOES happen, it will be a tiny minority.

As I said, (and several others have said too,) some buy-to-letters make a loss, and some only break even. Bully for you if you make a massive profit from it.

Purple butterfly wings
*Most houses double in value every ten years?'

What the fuck are you talking about?*

Just talking about history of the housing market so far.
You know you can actually respond to threads with facts rather than emotive rubbish about subjects you know nothing about.

Bully for you if you make a massive profit from it.
Investing our money wisely? Thanks

If you think properties double in value every ten years then you're not investing your money wisely. In fact you sound like one of those 'trainers' currently being sued by numerous people for massaging facts and figures to persuade them to invest in property and their training.

I quadrupled mine.

I only let it out because I was living abroad for 15 years. It does happen. I am not commenting on the morality of that though - I just wanted my mortgage covered while away. I don’t actually agree with it as a revenue stream and think it’s shameful that so many people are at the whims of landlords.

You made a misjudgement but in good faith. You should not be beating yourself up about this. They are comfortable. You need to forgive yourself and move on

Your points were valid, that they didn't know about property, and it would have been a lot of work for them.

I made a bad decision in my life (not overruling my dad after he'd been discharged from A&E - he wanted to go home but was still looking poorly - he died soon after we arrived home) I only recently forgave myself.
I had made a sensible decision given the facts that were available at the time. But for years I thought "what if...?"

Who knows. Your parents might have picked the wrong tenants and lost thousands or ended up living there themselves and falling down the stairs or something.
They are comfortable and don't blame you for anything.

There was no extra 3% stamp duty 12 years ago. I bought a btl in London in 2009 for £400k. Estate agent reckons I should get £1.1 million now. Sure, I’d have to pay CGT but even so that’s a hell of a rise. To the OP, YANBU in thinking you really stuffed things up. What on earth made you give them such terrible advice?

Never ever feel guilty about being a good son. You may well have saved them, as commentators think property prices could fall by around c20%.

Arrange financial advise now so they're prepared when property prices start to fall.

I agree that having a B2L is not straightforward and sometimes the tenants wreck the place, so they need to go in with their eyes open.

There are also other property investment schemes that could be useful, the advisor may identify them but if not look up Sterling Woodrow. You def need to get someone to do full due diligence, but that type of property investment may give them secure income and capital growth without them having to do anything.

Good luck. I think your advise was sound tbh.

Thanks so much to those who have commented. It has really helped to see things in a different light.

I have a buy-to-let, bought in 2012, and though I usually get a decent return in rent I've not made much on the value. And there have been times when I've lost money over the year due to bad tenants or unexpected costs.
It's pretty hit or miss, particularly for inexperienced landlords. I honestly think you gave th right advice.

There really is more to life than money. Why they would take your advice with no experience in property seems unwise to me. So you are not the one at fault here.

And supposing the house had been a nightmare, needs lots done to it, and it didn't sell, or they had a nightmare tenant...? or any number of things. You advised them with kindness. There are many things to consider when renting out a property, and they had found problems you would have felt guilty about that. Give yourself a break. If they had the money tied up in property, they couldn't use it for anything else if they needed it. They can ask for impartial financial advice from a recognised adviser.

Yes, this.

My parents (now in their mid 70s) have had a buy to let for a number of years and it’s been so stressful at times. Bad tenants, complaints from neighbours, repairs etc. Not all the time, but it’s quite hit and miss. I think they should sell up now, but they’re reluctant because of the tax implications and general hassle of selling. It’s definitely put me and DH off investing in property, so I’d consider your original advice very balanced.

OP, it's a horrible feeling. There's no point crying over spilt milk, but I know that's -- easier said than done.

To me, more important than the financial consequences is how the situation now makes you feel in relation to your parents. In your position, I think I'd want to clear the air by expressing how much this is eating you up. Your advice was misguided but well-meant; it would be a shame for this to poison your life. I think we often suffer more on behalf of other people than we do for ourselves, so fingers crossed they will set your mind at rest that life goes on and you are not the mastermind of their downfall!

I've made plenty of reckless mistakes that I grieve over, but whenever I get that twist in my gut I try to think of the Zen parable about good/bad luck:
An old farmer's horse runs away. All his neighbours exclaim "What bad luck!"
"Maybe..." says the farmer.
Later, the horse returns with three wild horses and everyone says "What good luck!"
"Maybe..." says the farmer.
One day, his son tries to ride one of the wild horses and breaks his leg. Everyone says "What bad luck!"
"Maybe..." says the farmer.
Then military officials visit the village to draft young men into the army, but spare his son because of his broken leg. Everyone says "What good luck!"
"Maybe..." says the farmer...

You just never know how things might have turned out if they'd bought that house. Or what might be in the pipeline for them that they could not have afforded if they'd invested into real estate.

Don't be so hard on yourself, buy to lets are a total pain. My husband and I ended up accidental landlords because we met later in life and both already owned houses. We didn't need to sell both to live together so decided to keep his as a buy to let. At first it was ok, we rented to a friend who took very good care of the property but we gave him mates rates which didn't cover the mortgage fully. Then he moved out and it took awhile to find someone new. It was really hard financially because we'd just had a baby. After that we had a string of tenants who were ok, but the last ones were awful. They didn't take care of anything and even did stuff like purposefully disable fans we had set installed to help with air flow so mold didn't grow in the kitchen and bathroom. They tore a radiator off the wall and claimed it 'fell'. I don't think they owned a vacuum. They painted without permission and got it all over the floor (which was hardwood). We finally got them out and sold the property. It was so stressful. Never again.

You had no idea what would happen with the housing market and trust me, I know through bitter experience that renting out a house is far more hassle than it’s worth at times! Unless you have the time and the finances to keep on top of tenants, house repairs and other aspects it really isn’t worth it. I convinced my dad to sell his London property and had I held off it could have made 50-100k more. It doesn’t matter. It was the right decision for the time and there was an equal chance that the bottom could have fallen out of the market and it could have cost him 100k.