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Renting at a loss (future gains in mind)

135

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  • Crashy_Time
    Crashy_Time Posts: 13,386 Forumite
    First Anniversary First Post Name Dropper
    bitsandpieces wrote: »
    There can be more reason to stick with a landlord then with an energy supplier, too. There's costs and hassle involved in moving for the tenant, people may like neighbours, community etc, and the insecurity of renting privately means many may stick with a landlord they know to be decent (or at least not bad) rather than move. People will be drawn more to cheaper places, but it's not the most fluid market...


    In Scotland landlords are heavily regulated now, if they are "bad" they won`t be a landlord long. IME it is just that many private landlords offer cheaper rent to get long term working tenants while letting agencies encourage kite flying prices in the hope of netting over-seas types, travellers/students etc. who don`t know the local market. The problem of course for the landlord is that they get voids and high turn-over, but the agent doesn`t really care about this. As for insecurity, my last rental lasted for 7 years, and I was actually getting itchy feet to move on :rotfl: Good long term tenants will only be found by pricing rent at sensible levels IMO.
  • Kynthia
    Kynthia Posts: 5,665 Forumite
    First Post First Anniversary Combo Breaker
    Moving costs a lot of money in paying for new credit checks and removals, is very disruptive, and you need to have cash available to fund a new deposit before your last is returned. People like stability and won't move unless their landlord is bad, the property is bad, or they can find somewhere a lot cheaper that it makes up for the additional costs and hassle. Unless they are overpaying for their property or downsize it's unlikely a new property would be significantly cheaper. If the property is okay people don't move, even more so if they have children in school and don't want them disrupted, moving too far from the school, or changing districts or catchment areas.

    OP I've heard horror stories from letting to the council in regards to the condition of the property after the 3 years. Plus your mortgage company need to give you permission to let and may not allow a commercial tenancy. So do your research. If you don't want the hassle then sell as it's a lot simpler.
    Don't listen to me, I'm no expert!
  • mstr
    mstr Posts: 10 Forumite
    Hi , Thanks all.

    The property is a 3 bed semi with good size gardens in new of some TLC but I'm currently looking at fitting new kitchen and lick of paint and what not. The main school for the area 5 minutes walk. Its on a bus route and access to the main duel carriage ways is easy.

    So I think location is good, condition is average ( at the moment ) but a smaller house with nicer inside just around the corner seemed to be up for let for quite awhile before a tenant ( 2 months easy ).

    The property will be put back as it was and as they want it just magg and white with no flooring ( which is good as the carpets are very old and they need to be renewed if letting) .

    The possibility of bad neighbours could be a concern and got a meeting to discuss with mortgage company so will ask the questions raised.

    They also offer another service where I choose the tenants and have full control and is basically the same as a letting agent without any fees ( but a chance of void times ).

    But yes selling is an option and looking into that to.

    Council letting doesn't seem to be getting much love :-)

    Thanks all
  • ThePants999
    ThePants999 Posts: 1,748 Forumite
    First Anniversary Name Dropper First Post
    mstr wrote: »
    The shortfall is a problem and my thinking is as they pay the bulk of the mortgage i should not be to long before it equalizes.
    I don't understand this. Your mortgage payment does not go down over time. And your rental income will not go up while locked into this 3 year contract. So how exactly are they going to equalise?

    I have a sneaking suspicion you've misunderstood how repayment mortgages work.
  • Crashy_Time
    Crashy_Time Posts: 13,386 Forumite
    First Anniversary First Post Name Dropper
    Kynthia wrote: »
    Moving costs a lot of money in paying for new credit checks and removals, is very disruptive, and you need to have cash available to fund a new deposit before your last is returned. People like stability and won't move unless their landlord is bad, the property is bad, or they can find somewhere a lot cheaper that it makes up for the additional costs and hassle. Unless they are overpaying for their property or downsize it's unlikely a new property would be significantly cheaper. If the property is okay people don't move, even more so if they have children in school and don't want them disrupted, moving too far from the school, or changing districts or catchment areas.

    OP I've heard horror stories from letting to the council in regards to the condition of the property after the 3 years. Plus your mortgage company need to give you permission to let and may not allow a commercial tenancy. So do your research. If you don't want the hassle then sell as it's a lot simpler.


    Last flat I had didn`t want any deposit, and you don`t hire top end removals you just rent a cheap van for the day, plus who doesn`t have cash on hand to pay out a few hundred quid deposit? Being honest, in the past I have moved flats with a few runs by bus and large hold-all bags with maybe a couple of taxi runs for bigger things, renters get all their white goods, TV`s, furniture etc supplied for them usually, you don`t have to move these things around. The reality is that with the tax changes and Brexit many landlords are going to struggle, if I was the OP I would go with the council deal, or as you say sell up.
  • Crashy_Time
    Crashy_Time Posts: 13,386 Forumite
    First Anniversary First Post Name Dropper
    ThePants999 wrote: »
    I don't understand this. Your mortgage payment does not go down over time. And your rental income will not go up while locked into this 3 year contract. So how exactly are they going to equalise?

    I have a sneaking suspicion you've misunderstood how repayment mortgages work.


    You maybe over-estimate the chance of rent rises?
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    Name Dropper First Post Photogenic First Anniversary
    Crashy_Time wrote: »
    In Scotland landlords are heavily regulated now, if they are "bad" they won`t be a landlord long.

    BS. I reported a shady landlord who lets out 3 properties in Aberdeen and a glorified shed at the bottom of her drive in Aberdeenshire who is not registered with either council as a landlord. Do you know what's happened to her? SFA. Years after being reported she is still letting out 3 flats and a large shed.
  • Crashy_Time
    Crashy_Time Posts: 13,386 Forumite
    First Anniversary First Post Name Dropper
    Pixie5740 wrote: »
    BS. I reported a shady landlord who lets out 3 properties in Aberdeen and a glorified shed at the bottom of her drive in Aberdeenshire who is not registered with either council as a landlord. Do you know what's happened to her? SFA. Years after being reported she is still letting out 3 flats and a large shed.


    How is she getting on at raising the rents?
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    Name Dropper First Post Photogenic First Anniversary
    Crashy_Time wrote: »
    How is she getting on at raising the rents?

    What does that have to do with the fact that even after being reported to the council she continues to commit a criminal offence by renting out properties? Yes landlords must be registered with the council(s) in which they let out properties but I have yet to hear of one rogue landlord being prosecuted.
  • mstr
    mstr Posts: 10 Forumite
    ThePants999 wrote: »
    I don't understand this. Your mortgage payment does not go down over time. And your rental income will not go up while locked into this 3 year contract. So how exactly are they going to equalise?

    I have a sneaking suspicion you've misunderstood how repayment mortgages work.

    Hi,

    Yes I know how they work, all things being equal the more of the mortgage paid off the more equity I will own and that seems to 'unlock' better interest rates so the payment should come down ( to a point ) - now that might be flawed logic and not the understanding of mortgages.

    Yes the rent increases 'inline' with market trends ( and as its under market value it wont go down ).

    I have email some questions and haven't got an answer from them yet so maybe they are busy or the questions are to awkward to answer lol.

    Thanks
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