Landlords incomes

[praying4]

With the change in isolation rules I can’t go back to my old job, I have long Covid & if people aren’t isolating / testing then I am screwed.

(Yes I’m triply vaccinated before anyone asks)

So I need to earn £50k per year to replace lost income.

So - can I become a landlord to earn money?? Is it even profitable anymore? Especially as house prices are so high and stamp duty exists for 2nd properties etc?

I can use about £40k from ISAs to fund a flat deposit. I could borrow against husband’s £75k income… Obviously it would take some time to build up to earning £50k but presumably people do do this for a living…

I am panicking but am trying to think about anything we can do to replace lost ££ income that doesn’t involve crowds, conferences, networking in poorly ventilated places, car sharing etc -basically I am aiming to reduce my exposure to Covid again.

I just need some hope I think. At the end of the day we have 2 kids and a mortgage and all the typical outgoings.

We have already made cutbacks.

If anyone here is a landlord - where should I start or am I wasting my time?

What do I need to be a pro landlord apart from starter capital?

Honest I rent out our London house which is mortgage free and I make nothing like £50k a year on it. I don't think this is going to be the solution you need. Sorry.

Being a landlord if you have mortgaged property is not very profitable now you can't claim mortgage payments as an expense. Its certainly won't make you anything close to £50k profit! You obviously haven't spent any time researching this, so no it doesn't sound like a good idea.

Look at remote jobs instead.

How would you raise a BTL mortgage against your husband's salary if you already have a mortgage on your own home?

Where and how would you find a property that you can afford that would generate £5000+ a month rent? (You habe to budget for voids, repairs, maintenance, etc). Significantly more if you need a letting agent to find tenants, and even more if you'd need them to manage the property.

What do you know about the practicalities of being a landlord.

My Partner is a LL and earns nothing like £50K. He does have a mortgage on it but it's not much.
His uncle is a LL and owns 4 properties outright with no mortgage and also doesn't make anything like £50K a year.

To make anything close to that you would need a lot of properties mortgage free.

Being a LL isn't all it's cracked up to be, you need to have money there to cover you if things go wrong such as boiler breaking,repairs, tenants not paying rent or the flat being empty for months.

I know quite a few LL's and don't know any that don't also have another job.
The last house we rented which we left last year, the LL has 10+ properties just in our area and obviously I don't know how much he makes from them but he also still works a different main job

If you worked off an 8% yield you need a property portfolio of over £600k before pulling in £50k a year in Gross income. And that's before you figure in costs of insurances/repairs etc.

To 'safely' pull in £50k after costs and emergency fund etc I'd say you'd need more like £800k in property.

Im all for property as an investment - but it's not going to give you the income you need anytime soon.

My honest opinion is that you'd be better off keeping your job or getting another and spending out on some counselling to address your anxiety rather than a buy to let.

This is it now. Covid is here for ever. You can't hide from it unless you intend on missing everything from now - including keeping your kids home constantly as to be frank, they're your biggest risk factor.

Let’s do some math here; to make 50K a year, you’d need 4.5K a month profit a month…Who do you think will pay that type of money if not more (utilities etc) per month on what??? Maybe a 4M home rented out to wealthy internationals or maybe a small apartment COMPLEX, 8 units….but something you plan to buy for 500K and rent out to a family???
I’m sorry your desperate but this makes no sense.

Leeds Building Society lends on rent from tenants not your personal income. You need to have an income but if your took out joint btl you could use husband's income. Btl LL needs to lay out 25 percent deposit. You would need in region of 11 houses to gain £50k. You can no longer right off mortgage interest against tax bill. You can claim for essential repairs, accountancy, insurance, advertising, EA, redecorating every few years.

Thank you for your responses. To answer some questions…

I have been an accidental landlord in the distant past but under very different circumstances. So I have some experience, but not lots. I’m aware rules have changed.

We have about £600k in equity and a very small mortgage of our own. Can we borrow against this??

Long Covid had pretty successfully screwed my energy levels for the short term at the very least. (Crossing my fingers obviously but I see no reasonable hope of a miraculous recovery).

I’m not well enough to work for anyone else… much as I’d love to do a remote job.

We are glad just to break even with our rentals. There is no why on earth you will see that sort of return with 1 rental.

Sorry OP but my property is worth more than you have and I don't make anywhere near half of what you are looking for. Don't forget repairs, tax, cleaning, periods where it is empty etc.

I know you are worried. It sounds stressful. I'd be inclined to post again on here asking for suggestions of what you can do from home to make money and be clear about your parameters. You might get some helpful responses. But this one won't work for you

Yeah I agree with the others, it's not going to make you anywhere near 50k so I think you need to be looking at other options.

We get a good rental income from the house we rent out, but after all expenses etc (not including repairs) that works out at approx £4K profit a year after tax. We would lose even more in tax if it was in my husband's name as he's a higher rate taxpayer. It only takes a few repairs/boiler replacement etc to eat up a good chunk of that profit.

For us, the profit goes into savings for the future (for our kids or our retirement) and in the long term we will sell and release some extra money that way. And if we need to dip into the money now for repairs etc then we can. But I certainly wouldn't be relying on that money coming in now as part of my income.

I’m no expert but I think to have a chance you probably need to be in the trade/amazing at DIY so you can do properties up, and have cash available so you don’t have mortgages on the rental properties.

I would’ve thought your best bet is to find a job working from home?

Why do you need so much money if you have a husband on 75K, a very small mortgage and have no other big commitments you have mentioned.
The only one I can think of is kids in private school, which is an easy fix. Find a comprehensive nearby and move them.

Or re mortgage

So it looks like be coming a property mogul isn’t going to work in the long term even with somehow leveraging things to buy multiple properties. I’m just feeling a little desperate.

I could do this if I was on my own, just struggle through somehow. I just don’t want my kids to have to suffer anymore than they already have. They are already carers now.

I need mt health to improve in the next 6 months so I can start earning again or we have to face some horrible consequences. I just don’t know how that’s going to happen.

What horrible consequences? £600K equity, a very small mortgage, and one of you earning £75K - doesn’t sound like an issue to fund daily life, you’re certainly not going to lose your home.

Being a landlord is not a totally passive income, if you’re too ill to do remote work for someone else, I think you have to be realistic about the work of being a landlord.

I think for now, get the rest you need knowing family income means your own housing is secure, then look for PT WFH roles as your health improves, which I hope it does for you soon.

Do you mean making changes from a family income of £125k/year to £75k/year or actually something bad? Trying not to sound patronising but £75k is perfectly manageable and would be a dream to most people. It will seem daunting, but it comes across that you are struggling with the prospect of change and need to get some perspective, unless there is something you haven't mentioned.

Is it taking kids out of private education? There are worse things that can happen then kids learning you don't always have the money to buy the "best" (used advisedly, as not always the case). I appreciate that it is a shitty outcome from covid, but it could have been something else that knocked you for six. Can you get support for your mental health? Talking therapy seems like it would help you work through the potential changes ahead.

I am an accountant. Most of our clients who let (mortgaged) property yield around 2% profit, assuming they consecutive tenancies. Which almost never happens. It really isn't worth the heart ache if the properties are motgaged.

Do you have other financial responsibilities OP? On £75k and a small mortgage you should copy just fine.

You’ll make nowhere near £50k on rentals unless you have a whole empire, and even then you can still stand to lose. The fact you thought it was a possibility shows you haven’t put much research into it, and the country really doesn’t need more landlords with no knowledge just trying to make a quick buck.

You’d be better off listing your outgoings each month vs what you have coming in, and then look at where you can tighten up your spending.

Aside from the fact its a bit morally whiffy to profit from rental payments rather than returns on the property as a long term investment, you will never make 50k a year.

Look at other remote working options. I am a personal assistant, i work from home on 40k a year working 9-5. There are lots of jobs that do not involve the level of travel or mixing you are rightly worried about.

Not sure your skillset but even working from home customer services pay around 21k a year?

My friend makes more than that as a LL.
However, it took him over 10 years to get to this stage and started by inheriting a property mortgage free and then building from there. His properties are mostly student let’s and he took a massive hit when Covid started and students went home.
I would be very surprised if you can earn £50 k from being a LL any time soon and you could lose money. Sorry

You're not going to make £50k doing this, sorry.

I'm a bit confused as to why you will face horrible consequences when you have £600k equity, a small mortgage and partner earning £75k. Sounds like you are in a very good position compared to most, even with you not working.

OP i mean this kindly but you need to get your head straight on this - others have pointed out how unrealistic it is to throw yourself into buying up property and hoping to earn 50k in the current tax/financial climate. it's nowhere near as lucrative as it used to be, even if you came from a useful background (i.e. have a trade, design or construction experience to rennovate etc).

But you're in an incredibly comfortable position compared to most, and you need to re-cut your cloth to suit.

you seem to be trying to maintain your existing standard of living..outgoings, despite not being well enough to work!

Something has to give.

You've got over half a million in equity, small mortgage, and your DH earning £75K.

you need to sit down together and form a realistic plan of what works. i'd steer away from putting yourself in a more vulnerable position financially by starting to draw money out of the house from its equity to pay your living costs - you need something sustainable in the longer term, and putting yourself in a more vulnerable financial situation this time in 10 years isn't a healthy way to start.

No, I don’t think that this is a viable plan. I am an accidental landlord in London and I hardly make anything. The rules have changed and it is not what it used to be.

You won't see £50k a year return on the amount of capital you have to invest in property. If you can't find a way to earn £50k a year you will need to think about making big changes to your lifestyle to cut your costs.

The only landlords I see making this kind of money are holiday let owners. Decent property management team plus house/flat in extremely desirable location. Having said this, some of my clients achieve more than 50k