Buying to let - no idea how to and am I being ridiculous?

[Spareincoming]

Long story short; I’ve been left some money, the person who left it to me strongly advised me to use it to buy a house as DH and I’s home is owned by the family business he is part of.
We have no independent assets.
And whilst we have no plans to move or DH leave the business, my relative always told me we needed something that was an independent asset. I wish I’d listened more!

I have never bought a property so don’t know what I’m doing and haven’t done anything other than I’ve looked at one I would probably buy. In my budget. We live in Scotland but the house (and legal
stuff I imagine) is in England. Estate agent has said it’s a desirable rental area and my research shows that to be true

But! I spoke to a friend who is very much more clued up on financial matters than me and she said I’d be ridiculous to buy to let at this point in time; it will cost me a lot in stamp duty; that I would be stupid to have it in both mine and my DH’s name - it should be mine only etc. She’s scared me a bit to be honest.

All opinions welcome!

I’m guessing that if the family business owns your current “home” then this wouldn’t be a classed as purchase of a second property as such - so maybe no excessive stamp duty?

I’m not saying buy to let is a good idea, having done it it’s not a trivial thing to do and can be a real nightmare with bad tenants etc.

I don’t know your age but bear in mind that owning a property you don’t live in and rent out would reduce your eligibility to certain benefits in the future, but so would excessive savings. Investing money in a pension is safer in that regard but obviously would be locked away until you are 58 or older. If you are below 40 and certain of not needing benefits in the future then I would definiely think about putting £4k a year each into a LISA seeing as you don’t own a property yet.

As you are married the inheritance would be a marital asset as I understand it - you’d need to check that out as in scotland it might be different.

That would mean you being a landlord?

hopefully you would pay for full management with agent

Invest it

@SatanicSanity Thank you for that, you’ve said similar to my friend but in much more understandable, less doom-mongering manner!
DH and I are approaching our mid 40s which I think is why my relative was keen to leave me an opportunity to invest in a physical asset which I could sell at a later date, or should something happen and my DH’s family business collapsed, we would have somewhere to go if needed.

@Aquickturn81 I would absolutely be using a management company - I used to live in the city where the property I’ve seen is and would try to use the company who maintained the house I rented - they were excellent then and Google tells me they still have a very good reputation!

@Seamoss is a property not an investment though?

It can be very expensive so you need lots of ready cash to deal with any problems. Repairs and maintenance - some will be your responsibility, legal fees if tenant defaults on rent, agent fees and any related taxes, etc.

As long as you keep back cash invested in a fairly easy access vehicle and read up on all your legal responsibilities, it can be a profitable investment. The main thing is to know what you are getting into and what you are legally responsible for.

Why would you buy a property to rent in England when you live in Scotland?
Even with a management agent you'll still have some involvement (especially if the agents turn shit or anything goes wrong with tenants) and being far away will make it even harder.

I've been a landlord for over 15 years and I wouldn't advise anyone to get into it now. Letting agents are more shit than ever (in my experience), insurance is more expensive than ever, and you have to go into any tenancy assuming that you'll have to pay for eviction proceedings if you want the tenants to leave as so many people are now in the situation of being forced to stay until evicted to get any help from social housing.

It's more difficult than ever to get reliable repairs people so that side of things is more expensive because you can't have tenants wait like you may do in your own home.

If there's a local scheme where the council or housing association rent your property, they pay you rent and deal with everything (one here is for a minimum of 5 years) then it would be worth considering, but otherwise I wouldn't.

I've sold one of mine (to my tenant) and the other tenant is hoping to be able to buy in the next two years so I'm holding on.

I had my last home as a BTL for 5 years, as i wasn't successful in selling it, so an involunatary landlord.

When i sold it i put the money in ISA (I completed in March so was able to utilise two years ISA allowance in a matter of weeks) and have made far more money through interest than I ever did through rent, with zero stress.

I really wouldn't recommend taking on a BTL in the current climate unless it is something YOU want to do, not recommended by a (dead) relative. I'm in Wales, and Wales is a little ahead with renter reform laws and it became enormously stressful. You take a massive gamble with who you let to and can be stuck with them for a long term as there just isn't the capacity in the court system for all the evictions to be processed. You also need to keep a big lump sum in accessible savings to deal with any maintenance issues like a new boiler or worse, as it just isn't acceptable to leave tennants waiting whilst you find the money.

Invest the money. Look at things like property partner where your money will track the property market more closely.

Why wouldn’t you buy a property in the area that you live? If you were to rent it out it would be much easier to manage (you could do it yourself via open rent), and would stand more chance of being economically viable. And if you ever list your tied accommodation you could then just move into the property you own?

is a property not an investment though?

Yes if it makes you an income. It's easy for it not to make money.
And if it is an investment, are the returns you'd getting optimal?

You'd need to work out your monthly profit ie rent minus mortgage payments, insurance, upkeep, buying fees, management fees etc. Compare that with how much money you have tied up in the house.

Then guesstimate how much you think the house will increase in value over however long you'll own it for. Minus tax, and fees

Would you be comfortable leveraging the equity in the property? Taking out a mortgage on that property to fund buying another?

You'd need to compare those numbers to popping the money in an index linked tracker for the same timeframe.
(If you have more than 20k (or 40k if you're using your DHs tax free allowance too) coming to you you'd be paying some tax on your interest. But this would reduce each year as you moved the money into your S+S ISA)

Usually the index fund wins

Being a landlord is a job. And giving that job to a management company means they are earning the wage.

I REALLY wouldn’t.

Look at much safer investments. In your name.

For those asking why I’d be buying in England; we live rather rurally; within a very poor rental market area and where purchase prices are sky high.
The property I’ve seen is less than an hour away, is on the market for about 2/3 of what I’ve been left so I would have some buffer.

Thanks for all the comments, it is definitely helping me see the pros and cons in an area of adulting I know very little about.

The UK housing market has out performed the stock market for the last 30 years.

You will not have financing costs to consider so your rental income should cover your ongoing costs assuming the house you buy has a decent survey and the conveyancing is diligent.

You don't need to leverage the equity to buy another property... this could be your property.

You could invest in a pension scheme but that is unlikely to give you a house to live in when you retire as it is designed to give you an income stream.

You will need both, a house to live in and an income stream.

Suggesting that your should make decisions about securing your future versus risking not being eligible for certain benefits is not in line with how I like to plan my future.

Where will you live when you retire and are no longer working for the family business? Does this business provide you with a secure retirement plan? Those are questions you should be discussing with your partner, regardless of this windfall.

How to best use this windfall, to secure your future, should be discussed in light of whether you want to maximise capital growth or income and how much work you want to do. One of the biggest factors in BTL business is the cost to fund the investment.. ie the interest rates you would pay on the mortgage / loan.. for you, this is zero and you will be exposed to zero risk during to changing interest rates.

You will have ongoing maintenance costs and obligations to your tenants and you are at risk of void periods, non payment of rent and damages by the tenant that are not fully covered by the deposit and / insurance. You are likely to make a profit (because you have no finance costs) and your capital is likely to grow. Taxes are paid on profit and capital growth, so if they go up, so too does your profit / capital growth. It's a good 'problem' to have.

Should you invest in stocks, ISA, savings account, your returns are likely to be lower.

If you were to purchase a property, you would learn how to be a property owner, then when you retire and buy your own property, all of this knowledge and experience will be part of your skill set at a time when you are less inclined to take risks and learn new things.. it will be a lot less stressful.

Does your friend own their own property, have their retirement secured, want the best for you or have their own fears?

Talk to someone neutral, unbiased and informed.

"The UK housing market has out performed the stock market for the last 30 years."
interesting, which stock market though?

UK Housing market
The average UK house price was £66110 in 1995
The average UK house price is £292000 in 2025

That's an increase of 342% in 30 years

Global stock market
A global index tracker, MSCI has grown by approx 392% in those same 30 years

What I think you have done with your statement is to compare the UK housing market with the UK stock market, which has underperformed for decades, and grown by 260% over the 30 years

If a person wanted to invest in the stock market, investing in a global tracker would be the sensible choice. Not a UK tracker so it's disingenuous to use that as a bench mark

I'm a fan of pensions and S&S ISAs for long term relative safety and growth for your ££.
I wouldn't want anything to do with maintenance, improvements, breakdowns, tenants, tax on income and all the other things that go with BTL.

I'm a LL, have been for 25 years. I've been on a very steep learning curve recently.
An elderly tenant died in the flat. Estranged from kids who want nothing to do with it.
I've learnt that just because a tenant dies, the tenancy doesn't end. Tenant was on a standard assured shorthold tenancy.

To comply with the law I've had to give dead tenant two months notice. Including writing to him at his address and paying a fee to the office of the Public Trustee.
Obviously tenant won't respond to the section 28 and leave. I then have to go to court to get a possession order. I then have to apply to remove all his stuff (which I then have to store for a time). If I put a foot wrong I can be prosecuted by the Public Trustee.

It's looking at taking me the best part of a year to gain possession from a dead man.
No really relevant to you just needed a rant.

Before becoming a landlord...check the tax implications. There are new rules coming in.

First ask yourself why you want to rather than how to do it. What are your financial objectives in doing so? What alternatives have you considered? You openly share that you have no idea what you are doing. why would you then want to sink a large amount of capital into an asset, effectively starting a business and becoming a landlord if you have no idea?

I'm not a landlord personally, I have friends that are and they are constantly complaining about the issues that come with it. This government and previous ones have been making it less and less attractive to become a landlord.

Could you buy your current property off the business? Give yourself more security that way?
As others have said, check all tax implications and consider the cost and potential stress of becoming a landlord. There maybe alternative options - do you have a well funded pension for example?

Your friend is right that BTL isnt what it was. Particularly if you need to borrow to buy it. We have two - our deceased parents houses. We only hang on to them to give to kids once they are in their 20’s, otherwise they are a bit of a nuisance really.
I would consider an ISA - 20k a year. And your pension?
Property is still a good idea but as part of a portfolio of investments but a BTL wouldn't be the first thing I’d invest in now.

If you’re determined to buy bricks and mortar have you considered a little holiday home somewhere? Holiday rentals also not as good as they used to be but you wouldn’t have the hassle of tenants.

Whatever you buy/invest with the money, do it in your name only - as it is an inheritance, you may be able to keep this separate from marital assets. I personally would buy gold with it. To use a previous posters comparisons of house prices and stock markets over the past 30 years, then gold has increased by 1000% if you look on the bullionbypost website

The bullionbypost website sounds like it's a website that has a vested interest in people buying gold - I haven't checked, so might be wrong. But if that's the case, they'll be using a bench mark for "the stock market" that shows gold in a favourable light. But it might not be a fair comparison to what a reasonably informed person would actually chose to invest in.

So the question is "gold has increased 1000% in comparison to what?" Which stock market? The UK stock market? The US stock market? The Brazilian stock market?One activity managed fund? A global tracker?

Don't blindly believe what you're told by people who are trying to sell you things. Do the maths yourself, then decide.

@Seamoss I have some gold coins and when you look at the increase since when I bought them, they have gone up far greater than my rental property (which I originally bought to live in before I met my DH) and far greater than my DH’s stocks and shares. The Gold websites both encourage people to buy and sell. Yes, prices do fluctuate, but overall gold is steadily increasing.

and if you buy sovereigns and Britannias, there is no CGT to pay on profits when you sell them.

Buying a buy-to-let property isn’t a very sensible option. Very tax inefficient, and high running costs.

Far better to:

1. Use up your any ISA contributions (to invest in diversified tracker funds)
2. Use up any unused pension contributions (if I recall you can go back 3 years)

All gains in both are tax free and pension contributions will attract a tax rebate.

I’m a keen amateur investor and invest in quite a few things such as pensions, stocks and shares ISAs and gold. In the current economic climate and housing market I wouldn’t put a single pound into a BTL. It is just about the worst option imaginable.

Have a look at some of the investor forums online, they contain some really useful discussions and will help inform you further.

I understand wanting to honour the wishes of the benefactor. And I don't own a buy to let property (tho I own my home).

But my feeling when I recently received an inheritance is that I don't want the headache. I've known too many people having to go to court to evict people, there are repairs, gaps in tenancies etc and you can't access the capital without mortgaging or selling a property that is either empty (not generating £) or has tenants who may not present the property at its best. It could take time to sell.

I opted to place the money with a company that manages it for tax efficiency (transferring to ISAs and SIPPs) and tinkers with it daily so that I don't have to think about the effects of world politics or cereal prices. It's diversified in dozens of funds, each invested in hundreds of companies and is highly liquid. The cost (very minor) is deducted painlessly and worth every penny in my opinion. Over two years I have seen an annualised return of almost 13%.