PLEASE READ BEFORE POSTING

Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.

buy to let, is it worth it?

Options
245

Comments

  • Cliveman_Pieman
    Cliveman_Pieman Posts: 85 Forumite
    Options
    darrrren wrote: »
    I want to retire early with a comfortable but not extravegent lifestyle. I see alot of people making it got through property, going from nothing, to rich in a few years.
    These people went from nothing to rich by using the banks money, and getting the tenants to pay the interest, and the market would pick up the capital. The lending environment has totally changed, not surprising seeing as it almost brought our economy screeching to a halt.


    The tax position has also become a lot less advantageous. There can still be money made, but my S&S ISA made almost 15% last year, and my property a LOT less than that. If I was starting again I probably wouldn't start with property.
  • ManofLeisure_2
    ManofLeisure_2 Posts: 528 Forumite
    Options
    darrrren wrote: »
    I see alot of people making it got through property, going from nothing, to rich in a few years.

    Yes some have been very fortunate, but equally, many have not.

    In the past I've invested in both commercial and residential property - this was in London and Surrey. However, the tax situation in respect to BTL has changed considerably and I would not consider this route today - wouldn't want the hassle either :)
  • Crashy_Time
    Crashy_Time Posts: 13,386 Forumite
    First Anniversary First Post Name Dropper
    Options
    Is BTL worth it, now, with Brexit looming, at the height of a property bubble and with the political/social/HMRC mood music shifting against BTL? Almost definitely no IMO.
  • Crashy_Time
    Crashy_Time Posts: 13,386 Forumite
    First Anniversary First Post Name Dropper
    Options
    ManofLeisure wrote: »
    Yes some have been very fortunate, but equally, many have not.

    In the past I've invested in both commercial and residential property - this was in London and Surrey. However, the tax situation in respect to BTL has changed considerably and I would not consider this route today - wouldn't want the hassle either :)


    What is the worst "hassle" you have had as a landlord, if you don`t mind me asking?
  • Typhoon2000
    Typhoon2000 Posts: 1,122 Forumite
    First Anniversary First Post Combo Breaker
    edited 24 May 2017 at 4:17PM
    Options
    BTL isn't for the small timers With small deposits. If you can buy with a small or no mortgage then it's a better bet. The good news is people are always going to need some where to rent. Home ownership is going down, prices are going up, mortgage rules are tightening, so there is a big chunk of people how will now never be able to own their own home, and they will all need somewhere to live.

    Depends also on your aims. Are you looking for income? Capital gains? Or are you willing to chuck some money from your other income on top of rental income for a few years to give your kids a head-start?

    But yes your right, previously the little guy could better them selves by investing in property, now it's only the rich than can do it. The BTL boat has sailed in South East, may be in the North where prices are less, there may still be some room for the little guy.
  • mn2203
    mn2203 Posts: 48 Forumite
    First Anniversary First Post Combo Breaker
    Options
    I am also pondering this question at the moment:

    Own a 1 bedroom flat with £12k left to pay, looking to reduce term of mortgage down to 2-2.5 years and get it paid off.

    Looking to move into bf's property in about a year.

    I've been researching the renting (either long term or until I want to buy a bigger joint property with bf) vs selling up when I move in with him and save my lump sum to use as my share when we buy a joint property down the line.

    I have been told if I keep my property and rent it out, when we come to buy a second joint property together then the stamp duty would be much higher, 5% on £12k-250K property, 8% on one above this. One way around this is to have both named on the mortgage but just my bf on the deeds, is this correct?

    Also, when I come to sell my flat I would have to pay capital gains tax as it is not my residential property - but I could move back in to avoid this - does anyone know how long I would have to move back in for?

    Thanks
  • ManofLeisure_2
    ManofLeisure_2 Posts: 528 Forumite
    Options
    Crashy_Time wrote: »
    What is the worst "hassle" you have had as a landlord, if you don`t mind me asking?

    I let a property to a group of Estate Agents who gave me a lot of grief:) - in particular - non-payment of rent. A couple of months rent (and I kid you not) 'eventually' arrived at my home in cash which had been placed in a carrier bag :eek:. They were an odd bunch (to put it politely) and I was glad to say goodbye...
  • BucksLady
    BucksLady Posts: 567 Forumite
    Options
    ManofLeisure wrote: »
    They were an odd bunch (to put it politely) and I was glad to say goodbye...

    They sound as if they were really 'dodgy':)
  • 00ec25
    00ec25 Posts: 9,123 Forumite
    Combo Breaker First Post
    Options
    mn2203 wrote: »
    I have been told if I keep my property and rent it out, when we come to buy a second joint property together then the stamp duty would be much higher, 5% on £12k-250K property, 8% on one above this. One way around this is to have both named on the mortgage but just my bf on the deeds, is this correct?
    only if you sign a Deed of Trust stating that when sold you will not get one penny from the sale. As soon as you share the sale proceeds then you have established a beneficial interest and would be liable to the higher rate SDLT
    mn2203 wrote: »
    Also, when I come to sell my flat I would have to pay capital gains tax as it is not my residential property - but I could move back in to avoid this - does anyone know how long I would have to move back in for?
    not how it works
    - it is exempt for the time you physically live in it as your main residence (plus the final 18 months of your ownership of it irrespective of whether you live there or not)
    - it is liable for the period you do not live there (excl the final 18 months). Obviously living with the BF, even if you do not co-own his property, means you cannot claim your property to be your main home as the facts show it isn't. Naturally letting the property also means it cannot be your home since it is the tenant's home.

    do some reading?
    https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet
  • darrrren
    darrrren Posts: 28 Forumite
    Options
    Those of you who said in todays environment you would do thongs different, what suggestions? What's best to do with your money i. Todays climate?
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.2K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.3K Work, Benefits & Business
  • 608K Mortgages, Homes & Bills
  • 173.1K Life & Family
  • 247.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards