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Why can't I make letting profitable? Is it all worth it?
geoffky
Posts: 6,835 Forumite
At last the truth is finally out and the reality is starting to take place...
http://www.landlordzone.co.uk/forums/showthread.php?t=14734
What am I doing wrong?
Because I cant seem to make any money at this letting malarkey. Yes I can see profit when the value of the property rises, so is that it? only buy rental property when house prices are on the up. If I look just at rental income then I’d be much better off putting my money in the bank (even after CGT and selling costs) at least I can get 5 or 6 % (at the moment)
I tend to keep my rent just below the max for the area and property type, I do all the maintenance work myself, however after deducting the costs of gas & electric checks, Insurance and maintenance materials I’m loosing big time. How others can afford to pay managing agents and maintenance people I just don't understand.
I read a post on landlordzone recently suggesting I paint the outside every 4yrs, the inside every 5yrs, fences a & sheds 4yrly and replace furniture every 4 to 5 yrs.
What with all this, the increasing hassel of managing them and bloody Christmas on the way---move over Mr Scrooge cos nobody’s getting nothing this year, including me!
http://www.landlordzone.co.uk/forums/showthread.php?t=14734
What am I doing wrong?
Because I cant seem to make any money at this letting malarkey. Yes I can see profit when the value of the property rises, so is that it? only buy rental property when house prices are on the up. If I look just at rental income then I’d be much better off putting my money in the bank (even after CGT and selling costs) at least I can get 5 or 6 % (at the moment)
I tend to keep my rent just below the max for the area and property type, I do all the maintenance work myself, however after deducting the costs of gas & electric checks, Insurance and maintenance materials I’m loosing big time. How others can afford to pay managing agents and maintenance people I just don't understand.
I read a post on landlordzone recently suggesting I paint the outside every 4yrs, the inside every 5yrs, fences a & sheds 4yrly and replace furniture every 4 to 5 yrs.
What with all this, the increasing hassel of managing them and bloody Christmas on the way---move over Mr Scrooge cos nobody’s getting nothing this year, including me!
It is nice to see the value of your house going up'' Why ?
Unless you are planning to sell up and not live anywhere, I can;t see the advantage.
If you are planning to upsize the new house will cost more.
If you are planning to downsize your new house will cost more than it should
If you are trying to buy your first house its almost impossible.
Unless you are planning to sell up and not live anywhere, I can;t see the advantage.
If you are planning to upsize the new house will cost more.
If you are planning to downsize your new house will cost more than it should
If you are trying to buy your first house its almost impossible.
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Comments
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I suspect you are like many of us who are paying mortgages on our rental properties. The bigger the mortgage, the less your income. However, you do have to look at the long term benefit. Property is always a long term investment. Yes, house prices have dropped now, but they WILL go back up. It is a struggle right now, I will be lucky to break even on my property portfolio this year - but I am just determined to ride it out!! Don't lose courage Legion..
The landlords who benefit all the way round are those who have been able to pay outright for their properties - their rental income will cover all expenses and give a healthy income. Their properties are true investments - i.e - they have invested their savings in a vehicle (a property) which realises both income AND potential capital growth. I still believe this to be one of the best ways to invest your money.poppy100 -
its not me its someone else have a look at the linkIt is nice to see the value of your house going up'' Why ?
Unless you are planning to sell up and not live anywhere, I can;t see the advantage.
If you are planning to upsize the new house will cost more.
If you are planning to downsize your new house will cost more than it should
If you are trying to buy your first house its almost impossible.0 -
Poppy's quoting from the same thread as you are, not replying to you!...much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0
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Geoff if you are going to post negative vibes please keep up with the thread. Pathetic...0
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mrs broaddick . very sorry as i was looking for some bull news and i was away a rather long time and forgot that the bit was a reply...forgive meIt is nice to see the value of your house going up'' Why ?
Unless you are planning to sell up and not live anywhere, I can;t see the advantage.
If you are planning to upsize the new house will cost more.
If you are planning to downsize your new house will cost more than it should
If you are trying to buy your first house its almost impossible.0 -
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you forget about one very important thing - she pays the price of having other people in the house. Someone would not mind but for another one it would be an idea of an ultimate misery - having to share YOUR space with someone else.
She certainly reaps the benefits of letting.The word "dilemma" comes from Greek where "di" means two and "lemma" means premise. Refers usually to difficult choice between two undesirable options.
Often people seem to use this word mistakenly where "quandary" would fit better.0 -
At last the truth is finally out and the reality is starting to take place...
http://www.landlordzone.co.uk/forums/showthread.php?t=14734
Well some on that thread have got the message.I agree with the yield comment.To be honest if its below 10% its not worth touching.My portfolio is about income and to be honest any capital appreciation is a bonus.Buytolet borrowing is now at 6-7% so you need at least 3% to make it worthwhile
http://www.landlordzone.co.uk/forums/showthread.php?p=101052#post1010520 -
My aunt has been letting out rooms in her house for about 20 years. At the moment she has 3 lodgers all of whom pay her between £100 and £120 per week. She allows a certain amount for gas and electricity, but if the bill goes beyond that they have to pay a surcharge.
Her lodgers have to pay towards council tax and are not allowed to use her phone.
They have to buy all their own food/cleaning materials/soap powder and so on. They all work full time and so are rarely in the house and she certainly profits from them. She goes on cruises twice a year in the Med and often says how glad she is that she's got people in the house while she's away who are not just looking after it - but paying to do so.
She certainly reaps the benefits of letting.
Actually the tax free rent a room is a good earner 4250 a year and if you work it like your aunt almost pure profit.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Actually the tax free rent a room is a good earner 4250 a year and if you work it like your aunt almost pure profit.
£4k a year is too little for me to lose my privacy and peace and quiet. The idea of having lodgers gives me the creeps to be honest - I'd have to be desperate to do it, and I suspect that goes for a lot of people (esp middle aged and older).
I own properties outright, and yes its not too bad a return but you do have to treat it as a job, an occupation, call it what you will. You have to keep on top of maintenance, accounts etc etc. Then there is the stress of dealing with tenants...
I think at the moment BTL is not worth the hassle if you have a significant %age mortgage on the property and I suspect a lot will come unstuck over the next year or two and fall by the wayside. As an outright purchase it can certainly make sense, esp with the outlook for savings rates.0
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