Buying to let

[THR1]

Hey, just putting it out there, but if people can afford to acquire a second property and are using the rent from it to pay a mortgage on their own home or increase profits/create a nest-egg, it seems unreasonable to pass on mortgage inflation to tenants, who only have one temporary home. It's not their fault mortgages are going up - at least split the difference with them!

A second property, whichever way you look at it, is a middle-class "luxury" and should demand fair rent prices and promote less greed. Buy-to-let is a risky business, but the landlord takes the risk and should not expect to put up rental prices on a whim or to charge extortionate prices for no service improvement (as per most business models).

I speak as a second property owner, who charges their tenant only 2/3 the geographic expectation because the tenant is on benefits. She looks after the house beautifully for a 1/3 reduction and her (local government-generated) rent is reliable. Any income at all is a lot more than most people have right now, and if you can't sustain a second mortgage comfortably without burgeoning your tenants with your costs, surrender it and put your money into something else.

@hay5689 What is an "accidental landlord?" I wonder if that means I can wake up tomorrow and discover I've acquired some extra properties and tenants?

You made a conscious and calculated decision to rent out your DPs property. Other options available to you were to sell it, turn it into a holiday home or leave it empty. Instead you chose to rent it. In what way was this an accident?

@SilentHedges it was on the market for 6 months actually. There's so many properties for sale in our area it was a buyers market not a sellers one at the time. Our financial advisor said rental was a good option for now and we couldn't leave it empty as you suggest because we'd still have to pay council tax. I use the term accidental landlord because we didn't buy a property on a buy to let mortgage, our circumstances meant we both had our homes and one was mortgage free and the other one doesn't have much left. We didn't purposely buy a property with the sole intention of becoming a nasty, grabbing landlord that MN thinks everyone is, the real world isn't as black and white as MN.

Tomorrow I'll go and tell my tenant that MN says I'm being selfish and stopping others from buying so I'll serve her notice and "do the right thing". I'm sure she'll thank you when she can't pass a credit check for a new rental property and even if by some miracle she does she'll be paying a lot more than what we charge her. I'm sure her and her two children will have a lovely Christmas in a B&B the council will pay for because demand for social housing outstrips supply in my area.

@hannahcolobus see my reply above. I'm bored of explaining it to people that think everyone sets out to buy up all the houses in the UK like some real life monopoly game.

@hay5689 Thank you for the explanation, and the circumstances that led to you becoming a landlord. Which wasn't an accident.

Nowhere in this thread have I suggested you evict your tenant, or that we dont need a certain level of rental properties, so you have gone on your own, entirely defensive tangent there. My initial bemusement (previous pages) was why landlords plough time and money into such a complicated, low return compared to other financial opportunities available.

BTL has gone far beyond plugging the shortfall in social housing for those that can't buy. Primarily, over about 25 years, the tax relief on mortgage interest allowed BTL to outbid would be owner occupiers, fuelling price rises, forcing would be home owners to rent. Every property taken off the residential market, causes a scarcity and puts a squeeze on prices. There's 2.5 million (on purpose) landlords in the UK and 1 in 10 properties are bought for investment purposes.

On the upside the golden age of BTL died a few years ago and the savvy investors are already out.

@hannahcolobus because as I've previously said if I had intended to become a landlord I'd have purchased a property with a buy to let mortgage with the pure intention of renting it out. My circumstances were I split up with a long term partner and my now Dp was divorced so we had two properties because we had been single for a few years prior to meeting. Unfortunately I can't change that nor could I make someone buy the house that we rent out, should I have just let it sit empty and rot? I'd love to hear what you would have done in my situation and I'm sure you'd have been prepared to pay 2 lots of utility bills because even when no one is living there the heating has to come on once in a while, water still has to be paid and council tax has to be paid after 6 months even if it's empty hence the advice from our financial advisor to rent it out but what does he know? Seems I should be getting financial advice from strangers on the internet instead of a professional and we'd have saved money. Yes, I've admitted we are lucky and use the money from it to pay our mortgage but that house has been paid for by my Dp so it's his to do what he wants and he most definitely doesn't want it to sit empty and I'm pretty sure our tenant would think the same. I await your reply as to what you would do in my situation, I'm sure you'd have done the right thing and continued paying bills because this is the internet and not the real world and we can all pretend that we are better people here than we are in real life.

Well said, I totally agree.

@hannahcolobus I expect they will, while telling us its all about the invaluable and morally superior service they provide 🙄

@hannahcolobus of course you are in the same position as me and doing the noble thing, quite the coincidence. Strange you never mentioned it before but that's the beauty of the internet, we can be what we want to be.....

'I don’t doubt that most of you on here are some of the more decent landlords who look after your housing stock and the tenants in it. But that’s literally the bare minimum of being a landlord."

Huh? That's literally what you're supposed to do as a landlord but to you it's the bare minimum? What do you want, the landlords to come over and look after the kids? Cook dinner? Do the shopping? But Christmas presents?

@hay5689 exactly the same here. I got divorced and the housing market was on its knees with the property in negative equity and quite honestly noone was buying. So I rented it out to see whether a few years would make a difference.

It took 8 years for the property to be worth anywhere near what I paid for and by that time I had tenants in who were a lovely family with 3 young kids and we both treat each other with mutual respect, I haven't yet raised the rent in 5 years.

I really don't understand what some people expect us to do other than look after our properties and tenants. Clearly they won't be happy until we've kicked out families into a hostile rental and buying market in a recession, like most of the recent legislative and tax changes to punish landlords, noone has acknowledged that ultimately its the tenants who will bear the brunt of those changes.

Sounds like plan simple jealousy to be TBH.

@bootsyjam I think the poster is either high, utterly deluded or genuinely thinks landlords should provide a concierge service for their tenants. Mind boggles. 😛

Well you posted that the literal bare minimum is for a landlord to look after your housing stock and the tenants in it.
What extra things should they be doing then? Are you now laughing at yourself?

@hannahcolobus, are you aware that housing associations increase rent every single year? I increase rent most years but only by a small amount. Tenants have told me they prefer a small annual increase of say £7 -£10 to cover inflation than a larger increase every four years. This year the increase is nowhere near to inflation as inflation is running so high. Whatever you may think if a LL gives all legally required information to tenants, provides gas and electricity certificates, smoke and CM alarms, protects their deposit, maintains property to a good standard and makes timely repairs they are a good LL. I also made a mercy dash with loo tools and paracetamol during first lockdown when loo rolls and paracetamol were hard to get hold of. If you don't like LL can I suggest you don't rent privately.

I am just laughing when getting the posts. This should be done and this tenant and that tenant right. I dont have a blt but there is so many option to help people to buy a house. Or just get a council house. If someone rent got a reason for it. You tenants and super government has not an idea about economy. Made it hard for land lords. Landlords left.they Put them investment somewhere more profitable and secure. Result not enough rentable homes. Economics rule supply demand. Renting prices sky high now. You got what you asked for 🤣 Love this people have no idea about economics. Just want to be everything done for them and do nothing for it.

TBF you need quite a few houses to make a decent sum off of landlording.

I can't work currently but was left an inheritance, the plan is to sell our share of the estate and buy our own forever home, however this is proving a nightmare and after a year of trying to buy 2 houses have fallen through on us.

So I looked into the possibility of investing by buying 3 little starter homes at auction in cheap but popular rental area of town and renting them.

Turns out even bought with cash (no mortgage) after insurance, legally required costs (gas, electric and so on), management costs etc... I would only make between £3-4k per year on each and that doesn't include upkeep. If one needed a new roof or boiler which would wipe that whole annual income amount out.

That also doesn't include tax as the amount of profit made would have been under the taxable limit but a 4th house would add tax and take a further chunk out of it making it not much higher.

It worked out I would need a minimum of 8-10 houses to make a 'living'. So theres zero point having like 1 rental property, landlords (like my current one) who make bank own hundreds of them.