Buy 2 Let - have we missed the boat?

[clarrylove]

Due to an inheritance, we will have some cash to invest. We already have hefty investments in stocks and shares, pensions and premium bonds so are consudering property, probably buying a small local property outright. The local rental market is strong due to lack of properties but I know the rules are less generous now. We have no experience of being landlords. Are we crazy to consider it? All views welcome!

The boat is sinking for many due to Section 24 tax changes. If you are buying outright with cash, you have the luxury of simply waiting. It is not always easy to wait but I am seeing a huge amount of landlords selling up in advance of S24, new EPC rules, credit tightening, difficulties in remortaging and the political climate which is protecting long term tenancies (making it much harder to evict problem tenants and no fault evictions). Chuck in Brexit and interest rate rises and property is going nowhere for the next few years, you only have to look at reductions in London to see what is already happening, some areas down 20% from 2016. Shares have given better much returns recently and alot less hassle! Do your own research of course.

Thank you for your reply. I think that is the conclusion we are rapidly heading towards.

The boat was never full of cash unless it was London or you were a rachmann type. You can still make money but you need to be heavily insured, expert, realistic and not in Scotland. Forget it with a mortgage, that's been the case for some years.

Sound advice and realistic. At last!

Following with interest. I'm interested in buying a BTL property with a 50% mortgage.

I don't really understand why the tax changes are seen as having such an impact if you have a lower LTV. I'd be paying tax on most of the rent regardless of the tax changes?

If it’s cash you might be ok but don’t expect the property price to increase.

I bought a blt last year cash. It’s doing fine. I was lucky in that I was able to find a decent property that should sell ok if necessary, but also one I plan to move into when I retire hence I’m not keeping too much of eye on prices.

I don’t make huge amounts of rent for me on a day to day level but the property does make quite a bit against the investment I made.

Not an easy buck as I’m a responsible landlord and have already spent quite a bit to bring it up to standard for the (sitting) tenant, my choice. I’m still learning.

Changes are coming that will affect landlords but I still think that many tenants will be living in substandard accommodation (sadly).

Spag - don’t know - depends how much your mortgage is against rent.

When selling my last home investors were all over it - it was my home but from investor POV it was great areas, great schools, transport etc. They literally came calculator in hand. They’d have made a small loss in terms of service charge but it was totally ofset by huge price rises.

That’s all out the window now I think.

My btl is London commute so is a few years behind London. My investment has gone up a lot and will withstand the inevitable fall. It’s s high renting area. I don’t squeeze every penny out of it and the tenant and I have constructive relationship - he pays me - it’s his home. It is a responsibility.

Depends on your circumstances, location, market and your future plans, and whether you feel your investment will work for you and you can be a responsible landlord.

I am not sure what to say. We have BTL but purchased well before prices went through the roof. We are on the edge of London commuter territory and rents are holding up as are house prices. However, we are fussy about keeping them well maintained and this costs. For example, we recently had windows and doors replaced. Obviously things like electricity and gas safety checks and insurances need to be done as well .
My BTLs probably are better maintained than my house but we find that most tenants renew at least once and we rarely have any void periods.
We do make profit but it is not mega bucks but we don't bump up the rents.
If you go for it, use a GOOD letting agents at least initially. Look at the feedback on websites- I would avoid those where tenants complain about poor communication and slow repairs. Sometimes it is not the landlord but the agent being useless and not passing on messages. I also know of a letting agent who only likes to use his contractors and if you want to use your own plmber for eg then they always delay. I am fairly sure that they were getting a cut from their chosen contractors, who were poor.