The Moral of a BTL.....?

OffGridLiving

JencParker wrote: »

Those who only think of themselves and what they can gain tend to think of it as envy or jealousy. It is typical of the attitude that Maggie encouraged - think only of yourself. There who think beyond themselves and look at the effects on society as a whole - they are not envious or jealous, they just see selfishness and injustice to fellow humans. Somewhere in the middle is the right balance, but we will not achieve it through the current capitalist attitude that money and profit is a priority.

I suspect you will find a lot of reassurance on this board as it is frequented by those who do have money and self interest high on their list of priorities .

I don't really see a problem with people taking care of themselves and their families, rather than expecting society to do it for them. My parents were struggling financially in retirement and we were struggling with caring for our disabled daughter. The solution was for me to buy a larger house, convert a disused stable into an apartment/granny flat and have my folks move in. They help with our daughter and in return they have zero financial problems. They pay us a small amount each month towards the utility bills and that's it.

They used to qualify for pensions credit, mortgage relief and other benefits, now they just get their state pensions. We've helped ourselves and the state. Capitalism at work.

Out of interest, should we have been less concerned with looking after ourselves and just relied on the state?

N1AK

Prothet_of_Doom wrote: »

I want to explore the morals of becoming a land lord.

Over the past 4 years, by drawing a moderate salary, and taking only a small dividend my Ltd company, has gradually built up a buffer a surplus if you like.

This surplus to put in context is basically worth an hour a day of " overtime ", given that my Ltd company is paid an hourly rate, by it's clients.

If I'd done a 38 hour week rather than a 45 hour week it would NOT exist.

Now if I keep some of the surplus as a buffer, in case of no work, this leaves me with enough for a 50% deposit on a decent flat in the city centre or a student house.

Now I'm struggling to persuade my wife that the long term investment outweighs the risks and should be seen as a way of supporting ourselves in our old age.

This is not helped by my sister in laws belief which she feeds to my wife, which basically says "nobody should own more than one house, nobody should make a profit out of other people's need for a roof over thier head"

Now I see this as the politics of envy. I'm not looking to make massive profits, but I do want to use any profit to fund another deposit, and another, and another, before using any profit to pay off all the mortgages as I see 4 propoerties providing enough to comfortably live on in retirement. I have some pensions, but quite frankly I'll be uncomfortable.

If people like me, are investing, that means that we compete in the housing market, with people like my kids who might struggle when they reach the age that they want to stop renting, and there is the option of helping them onto the ladder, but and this is both realistic and selfish, I need to turn the cash I'm making now, into something that will pay for my old age. And in any case I'll be handing it to them on my death. Unlike a pension which dies with you. :mad:


So, am I morally corrupt like my sil thinks, or am I just finding a way of making my money work.

Does your SIL only buy goods made by well paid, well treated workers; refuse to use any products that are animal tested, refuse to drive a petrol/diesel car and have a renewable energy supplier. Does she volunteer at the weekends to help drug addicts and give away any surplus income to help famine hit countries? Perhaps she shouldn't be acting like a modern day saint then

You buying a BTL or not isn't going to change whether 1,000s of others do or not and it isn't going to make it noticeably harder for anyone to buy a place if they want to.

Owning property isn't evil. It isn't a BTL owners fault that the British people don't want to build more housing (they say they do but then reject any proposal near them).

I'd vote to support stronger tenant rights. I'd vote for more house building. I'd vote to stop BTL reclaiming mortgage interest tax. All of which would make a noticeable difference. I'd also buy a BTL if I decided it was the best investment for me and it wouldn't change any of those other views.

N1AK

JencParker wrote: »

the way they turned every room into a bedroom giving the students no communal living area and the relatively high rents (far higher than halls that included meals and no bills), I think those who rent to students are the biggest parasites of them all!

It's a race to the bottom that students supported (and I was one). If a 3 bed house with a lounge and dining room was £200 per week each, but another landlord offered a similar property with 4 beds, no dining room, but at £170pw then most students would give up the dining room to have £30 a week in their pocket. If students had refused to rent properties that were crammed with rooms then landlords wouldn't offer them.

Now you could put controls in place on maximum occupation for size of property; effectively making it illegal for this to happen. However, that would increase the cost of the cheapest housing for students. Is that better? (note: I am not saying it is or isn't).

CLAPTON

JencParker wrote: »

Considering the student houses my children rented, the conditions of the houses, the way they turned every room into a bedroom giving the students no communal living area and the relatively high rents (far higher than halls that included meals and no bills), I think those who rent to students are the biggest parasites of them all!

I'm rather surprised and wonder which Unis your kids went to.

With the exception of Cambridge, Uni provided rooms were very small and quite expensive compared to those available commercially (even allowing for meals taken).

The standards at Uni were very poor, virtually impossible to get the Uni authorities to repair anything in less than 3 months even down to getting a door lock changed.

The commercial sector was a very mixed bag. Some landlords would respond the same day and one in truth was awful.

The costs of being in hall were higher than commercial lets.

However they all preferred being out of hall.

JencParker

CLAPTON wrote: »

I'm rather surprised and wonder which Unis your kids went to.

With the exception of Cambridge, Uni provided rooms were very small and quite expensive compared to those available commercially (even allowing for meals taken).

The standards at Uni were very poor, virtually impossible to get the Uni authorities to repair anything in less than 3 months even down to getting a door lock changed.

The commercial sector was a very mixed bag. Some landlords would respond the same day and one in truth was awful.

The costs of being in hall were higher than commercial lets.

However they all preferred being out of hall.

You may be surprised - happy to enlighten you.

Student halls were well kept modern rooms with basin and fridge. Shared bathroom and shared kitchenette. 19 meals per week were included - lunches could be taken anywhere on campus.
Cost - £76 per week. (no charge during holidays)

Private rented student accomodation similar to this.

http://www.rightmove.co.uk/property-for-sale/property-42709595.html

Seven students sharing paying £89 per week each. No communal area (apart from small kitchen) as the living room was also a bedroom. Income for landlord £32,000 per year. Food and bills in addition. And no charge for the mould which destroyed some of my daughters clothes.

IveSeenTheLight

JencParker wrote: »

Considering the student houses my children rented, the conditions of the houses, the way they turned every room into a bedroom giving the students no communal living area and the relatively high rents (far higher than halls that included meals and no bills), I think those who rent to students are the biggest parasites of them all!

LOL, I would suggest that your children should have sought alternative accomodation.

I rent one of my flats to students and have been very successful in doing so.
They tend to be in averaging 2 years and I have not had to re-advertise since 2007, because the leaving tenants already are highlighting friends who are keen to take on the tenancy as soon as the property is available.

No voids, no advertising, fantastic win / win position

Part of the reason that I believe the property is so sought after is because of the quality , space and how I manage any issues / queries they raise.

Here's a couple of pictures of my flat that I lease out to students. If this makes me a BTL parasite, I think it devalues the point you are trying to make

IveSeenTheLight

JencParker wrote: »

Private rented student accomodation similar to this.

http://www.rightmove.co.uk/property-for-sale/property-42709595.html

Seven students sharing paying £89 per week each. No communal area (apart from small kitchen) as the living room was also a bedroom. Income for landlord £32,000 per year. Food and bills in addition. And no charge for the mould which destroyed some of my daughters clothes.

WOW.
£2,700 per month rent for a £275k property.
Even if only 20% deposit, meaning the mortgage was £11,000 per year on interest, and attaining £32,000 per year in rent.

Certainly the landlord could have afforded some decent improvements to the property and still had a very healthy return on their £55.000 investment (deposit)

That's a very nice RY.
Who said BTL is dead?

I've always favoured by VI market as it is a strong area.
Maybe I should be looking for more opportunities like this.

JencParker

IveSeenTheLight wrote: »

LOL, I would suggest that your children should have sought alternative accomodation.

I rent one of my flats to students and have been very successful in doing so.
They tend to be in averaging 2 years and I have not had to re-advertise since 2007, because the leaving tenants already are highlighting friends who are keen to take on the tenancy as soon as the property is available.

No voids, no advertising, fantastic win / win position

Part of the reason that I believe the property is so sought after is because of the quality , space and how I manage any issues / queries they raise.

Here's a couple of pictures of my flat that I lease out to students. If this makes me a BTL parasite, I think it devalues the point you are trying to make

My children did a lot of search and they were all pretty much a similar standard. Cheaper accommodation was available but in even worse condition. People's obsession with 'choice' fails to acknowledge that choice is limited to what is available!

Your flat looks very nice, however, you make no mention of where it is it's value, what you charge and what profit you make.

To make £32k per year for a small victorian terrace by packing in as many students as you can, who are already on very limited incomes is very profitable for the LL and their business - but at a high cost to others.

CLAPTON

JencParker wrote: »

You may be surprised - happy to enlighten you.

Student halls were well kept modern rooms with basin and fridge. Shared bathroom and shared kitchenette. 19 meals per week were included - lunches could be taken anywhere on campus.
Cost - £76 per week. (no charge during holidays)

Private rented student accomodation similar to this.

http://www.rightmove.co.uk/property-for-sale/property-42709595.html

Seven students sharing paying £89 per week each. No communal area (apart from small kitchen) as the living room was also a bedroom. Income for landlord £32,000 per year. Food and bills in addition. And no charge for the mould which destroyed some of my daughters clothes.

Looking at the Notttingham Uni website student accommodation seems to be in the 4k - 5k bracket

The property you highlighted above seems to have a lounge and kitchen diner which is the sort of accommodation my kids rented.

In any event if the returns are very good then there will be new entrants to the market (no real barriers to entry) unless the state interfers and so raises prices.

JencParker

CLAPTON wrote: »

Looking at the Notttingham Uni website student accommodation seems to be in the 4k - 5k bracket

The property you highlighted above seems to have a lounge and kitchen diner which is the sort of accommodation my kids rented.

In any event if the returns are very good then there will be new entrants to the market (no real barriers to entry) unless the state interfers and so raises prices.

It has risen quite a lot in the last few years (doesn't everything!).

The lounge was used as another bedroom. Having rented a number of properties between them during their uni years, and same with friends - it seems pretty standard to turn reception rooms into bedrooms. The lucky ones may get a communal area in a larger kitchen, otherwise there is no communal area.