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  • FIRST POST
    • findingtaxtaxing
    • By findingtaxtaxing 8th Jan 18, 2:37 PM
    • 5Posts
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    findingtaxtaxing
    Is it a good time to be a landlord?
    • #1
    • 8th Jan 18, 2:37 PM
    Is it a good time to be a landlord? 8th Jan 18 at 2:37 PM
    Hi

    I have some money from an inheritance which I'm looking to invest (around £150k). I'd always thought that if I had the money I'd buy a small house and rent it out. I'm almost mortgage free in my own house. But a friend who is a landlord is looking to sell his house and has suggested now isn't a good time to be a landlord - I'd love to know what other people think.

    I know that house prices can go up as well as down but I always thought bricks and mortar was a reasonably safe bet. Savings accounts don't offer much return and I'm not big on risk taking so thought I'd avoid stocks and shares.

    Thanks for sharing your opinions with me. I have a child with additional needs who may not be able to work as an adult so this is for their future too.
    Last edited by findingtaxtaxing; 08-01-2018 at 2:38 PM. Reason: Removed line spaces
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    • Comms69
    • By Comms69 8th Jan 18, 2:39 PM
    • 1,730 Posts
    • 1,576 Thanks
    Comms69
    • #2
    • 8th Jan 18, 2:39 PM
    • #2
    • 8th Jan 18, 2:39 PM
    It's fine as long as you do your research.


    Will you be buying outright?


    If so, you should have fewer problems.
    • findingtaxtaxing
    • By findingtaxtaxing 8th Jan 18, 2:41 PM
    • 5 Posts
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    findingtaxtaxing
    • #3
    • 8th Jan 18, 2:41 PM
    • #3
    • 8th Jan 18, 2:41 PM
    Yes, I thought that buying within budget would be better than taking out a buy to let mortgage. I think my friend was suggesting he thought there would be a Labour government soon and that "Labour hate landlords" so would make it difficult to grow an investment.
    • Mossfarr
    • By Mossfarr 8th Jan 18, 2:46 PM
    • 444 Posts
    • 601 Thanks
    Mossfarr
    • #4
    • 8th Jan 18, 2:46 PM
    • #4
    • 8th Jan 18, 2:46 PM
    I am a landlord and my view is that it is not a good time to be a landlord.
    The is very little profit to be made - particularly if you let through an agent. If you arrange the lettings and management yourself its a lot more work than you think - and a lot of legal requirements to comply with (and these are increasing all the time)!
    And, worst of all, if you are unlucky and get a bad tenant who doesn't pay and damages your property it could end up costing you thousands.
    • findingtaxtaxing
    • By findingtaxtaxing 8th Jan 18, 3:00 PM
    • 5 Posts
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    findingtaxtaxing
    • #5
    • 8th Jan 18, 3:00 PM
    • #5
    • 8th Jan 18, 3:00 PM
    Yes, I'd use an agent to fully manage things. I don't have the time or knowledge to do everything myself.
    • Comms69
    • By Comms69 8th Jan 18, 3:05 PM
    • 1,730 Posts
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    Comms69
    • #6
    • 8th Jan 18, 3:05 PM
    • #6
    • 8th Jan 18, 3:05 PM
    Yes, I'd use an agent to fully manage things. I don't have the time or knowledge to do everything myself.
    Originally posted by findingtaxtaxing
    Find the time. Ultimately you would be liable for every aspect of the tenancy.
    • Slithery
    • By Slithery 8th Jan 18, 3:18 PM
    • 462 Posts
    • 716 Thanks
    Slithery
    • #7
    • 8th Jan 18, 3:18 PM
    • #7
    • 8th Jan 18, 3:18 PM
    Fully read the following post and all of the links it contains. This is the absolute minimum you should research before even thinking about becoming a landlord.

    Also using an agent doesn't absolve you of any of the responsibilities, at the end of the day it's you that is liable for any mistakes.

    http://forums.moneysavingexpert.com/showthread.php?t=5180214
    • findingtaxtaxing
    • By findingtaxtaxing 8th Jan 18, 3:51 PM
    • 5 Posts
    • 0 Thanks
    findingtaxtaxing
    • #8
    • 8th Jan 18, 3:51 PM
    • #8
    • 8th Jan 18, 3:51 PM
    Thanks for the link - I'll take a look...it's all starting to sound much more complicated than I thought.
    • Comms69
    • By Comms69 8th Jan 18, 3:53 PM
    • 1,730 Posts
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    Comms69
    • #9
    • 8th Jan 18, 3:53 PM
    • #9
    • 8th Jan 18, 3:53 PM
    Thanks for the link - I'll take a look...it's all starting to sound much more complicated than I thought.
    Originally posted by findingtaxtaxing


    It may help to take a look at some of the posts on here, every week there's atleast one eviction post, one rent unpaid post and one deposit question (your top 3)
    • Dorian1958
    • By Dorian1958 8th Jan 18, 4:14 PM
    • 115 Posts
    • 80 Thanks
    Dorian1958
    If you are not big on risk taking, then I would suggest this is not for you. There are risks all over with this idea; buying an unsuitable property, not understanding your market, assessing whether or not you have the skill set required to manage a property and an agent (who will need to be managed), being able to vet prospective tenants, managing it like a business, and having the mental and financial resources to cope when things don't always go to plan. When things are going ok, money can still be made, MrsDorian and I have 2 outright owned rentals making about 5%after costs but before tax. After another 7 years or so we plan to sell so there might be a bit of capital gain as well (also taxable). A lot for you to think about and not the path to easy riches that some folk think it is.Good luck.
    • FBaby
    • By FBaby 8th Jan 18, 4:27 PM
    • 16,285 Posts
    • 40,550 Thanks
    FBaby
    Yes, I'd use an agent to fully manage things. I don't have the time or knowledge to do everything myself.
    Don't assume that this will mean they will take over all your responsibilities as a LL and that you will get good service for your money. My experience through 3 different agents was that they were more hard work managing then managing the tenants directly. They ripped us off each chance they got, and in the end, any matters resorted in them calling me asking me what to do, so didn't really see the point of paying them £100 a month for that luxury.

    It's hard work being a landlord but considering the impact of doing things wrong, I much rather do it myself, save my money and take in on the chin if I do something wrong. Lots and lots of readings (and you'll see a lot of links here to what you need to know) will be much more valuable. Put the money you would pay an agency aside and you'll have a pot of money to deal with any urgency.

    Do you maths before you do anything, you'd be amazed how much being a LL cost and most will only gain from it as a long term investment. In that case, you need to weigh whether it is worth the stress and aggro.
    • _CC_
    • By _CC_ 8th Jan 18, 4:29 PM
    • 277 Posts
    • 264 Thanks
    _CC_
    Personally, the only thing that would make BTL attractive to me would be the leverage, albeit if I had the assets to cover the debt. Most other things about it are negatives: tax status, ongoing costs, illiquid, not diversified, and so on.

    You may find a property with a decent return, but I would think there are far better alternatives out there if you were planning to purchase a BTL outright with cash.

    Learning more about equities and the tax status of various investments (including BTL) would be helpful.
    • ripplyuk
    • By ripplyuk 8th Jan 18, 4:30 PM
    • 1,679 Posts
    • 1,577 Thanks
    ripplyuk
    Yes, I'd use an agent to fully manage things. I don't have the time or knowledge to do everything myself.
    Originally posted by findingtaxtaxing
    Letting agents often have little knowledge too. They're just good at sounding like they do.
    • Simon11
    • By Simon11 8th Jan 18, 4:31 PM
    • 593 Posts
    • 458 Thanks
    Simon11
    Now is not a good time, particularly if you are in the 40% tax bracket and it will only get worse next year.


    The tax increases for landlords, just don't make it worthwhile anymore. I make a profit on my flat, but with the government taking 40% for tax and the remainder to pay off the mortgage (you can only deduct mortgage interest), I'm actually cash poor each year for having the BTL and have to subsidize the flat.
    "No likey no need to hit thanks button!"
    However its always nice to be thanked if you feel mine and other people's posts here offer great advice So hit the button if you likey
    • Cakeguts
    • By Cakeguts 8th Jan 18, 4:51 PM
    • 3,516 Posts
    • 4,864 Thanks
    Cakeguts
    I am a landlord and we are doing all right. The properties are all managed by an agent. 3 agents in total for 3 sets of properties in different areas. We didn't buy the cheapest houses in an area. We have more than one property. I did a lot of research before buying to find a gap in the local market.
    • need an answer
    • By need an answer 8th Jan 18, 4:51 PM
    • 79 Posts
    • 99 Thanks
    need an answer
    Are you in your "forever home"?
    If not I would not consider entering into the rental sector.
    Moving will attract higher rate stamp duty as you would own an additional property and the duty would almost certainly outweigh any income from the rental for maybe a considerable period of time

    I am another who has been down the LA route and now finds it easier to manage without them.
    Look into tenant find only contracts with agents they tend to give you more flexibility going forward especially if you are confident about arranging your own repairs etc.
    Last edited by need an answer; 08-01-2018 at 4:57 PM.
    in S T F 9
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    2017 -32

    2018 Wombling entrant No: 5 £4.70
    • ThePants999
    • By ThePants999 8th Jan 18, 5:40 PM
    • 965 Posts
    • 1,126 Thanks
    ThePants999
    Think of it as a business, not an investment. If you want to run a business, being a landlord is a gentle introduction. If you just want a return on your capital, I think it's a very poor choice.
    • Gwendo40
    • By Gwendo40 8th Jan 18, 6:03 PM
    • 29 Posts
    • 16 Thanks
    Gwendo40
    Long term your likely to get just as good, or even better returns, from a well managed and diversified stocks and shares portfolio, with none of the hassle involved with being a landlord.
    • capital0ne
    • By capital0ne 8th Jan 18, 7:05 PM
    • 255 Posts
    • 123 Thanks
    capital0ne
    Long term your likely to get just as good, or even better returns, from a well managed and diversified stocks and shares portfolio, with none of the hassle involved with being a landlord.
    Originally posted by Gwendo40
    Absolutely correct, your portfolio won't be ringing you up at midnight on a bank holiday weekend saying the roofs leaking and the CH is bust!
    • NoNoDrama
    • By NoNoDrama 8th Jan 18, 11:55 PM
    • 212 Posts
    • 60 Thanks
    NoNoDrama
    But as an investment houses are as safe as it gets pretty much. Name me a time in history when prices went down and stayed down? They always recover.

    Keep your nerve during recessions.
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