The Moral of a BTL.....?

Thrugelmir

Graham_Devon wrote: »

If he'd put down higher deposit levels and bought a couple less houses, thereby protecting himself instead of going for the most amount of houses credit would allow him, he wouldn't be in this position and those families he provides a service to wouldn't be at risk either.

That's pre 2007/08 banking crisis. So we all just have to live with the consequences. There's no going back to undo what's done. All we can do is move and look forward. As there'll be plenty of landmines lying around from the past. That may take some years to surface. The damage will just have to be dealt with as it arises.

CLAPTON

Graham_Devon wrote: »

I'm wondering if there is any point responding as you are clearly being extremely difficult.

I've already written the answer to this twice.

If he had taken fewer houses and put more of a deposit down on that fewer number of houses he wouldn't now be in the mess he is in. Instead he took as many as he could at higher risk on each property (due to lower deposits and higher leverage).

That mess he is in has a knock on effect to his customers. In this case, he is going to sell up as soon as he can, presumably giving the tenants 2 months notice to get out. He'll kindly let them stay until he can break even and then chuck them out when he has.

He took a number of houses, putting as little in as he could and taking as much debt as he could. The idea was to make as much as he could through capital appriciation.

If he had instead taken fewer houses and put up more of a deposit on each, negative equity may not now be an issue. He may well have been able to remortgage (one of his issues was that no one would take him on) and may not have had to sell up, thereby never effecting the tenants.

As a business plan I fully agree with you.

But you are making the case as one course of act (business success) is morally acceptable but the unsuccessful business activity is immoral.

The only difference being business success or failure.

Unbelievable!

And I haven't even discussed the issue of hindsight.

JencParker

CLAPTON wrote: »

He didn't deliberately get into negative equity.

You are confusing morality with business success.

Every landlord starts the business on the assumption that they will exit at a time that suits them (and not the tenant).

It is complete silly to say that because a landlord wants out then it's immoral.

The house goes on; there is no loss in the system some happy family will still be able to live there.
Millions of people move every year; it's not a moral issue, get a sense of proportion.

I think the point that you are missing is that with runni g a business should come responsibility. Responsibility to customers / clients. Unfortunately this seems to have been lost replaced with the ideal that making the most profit (whether for shareholders or business owners) comes before anything else. It is an Attitude that has come from across the pond and is found in most businesses not just btl but one that also makes society poorer.

Thrugelmir

JencParker wrote: »

It is an Attitude that has come from across the pond and is found in most businesses not just btl but one that also makes society poorer.

Yet the most successful businesses operate in an inclusive manner. I can see a resurgence in UK SME's. As people, employees, customers etc become fed up with the treatment meted out by those companies too big to care.

chucky

Graham_Devon wrote: »

That is, IMO, immoral.

It's immoral that market forces increase rents.

Oh dear, bitterness is getting in the way of rationality with this one...

wotsthat

Graham_Devon wrote: »

How many times do I have to say taking as many houses through greed and therefore taking the highest level of risk.....

It seems that in your opinion this individual has acted immorally.

Does it mean that BTL is immoral as a business? I suspect you think it is because you think owning a BTL is a sure indicator of greed.

CLAPTON

JencParker wrote: »

I think the point that you are missing is that with runni g a business should come responsibility. Responsibility to customers / clients. Unfortunately this seems to have been lost replaced with the ideal that making the most profit (whether for shareholders or business owners) comes before anything else. It is an Attitude that has come from across the pond and is found in most businesses not just btl but one that also makes society poorer.

No, we are discussing the issue that if the BTL owner had foreseen the future and bought fewer properties then he would have been a 'good' person but because he didn't foresee the future he is a 'bad' person.

Now some people hate all BTLers which I understand but hating only the unsuccessful seems less than commendable.

I don't agree that having no businesses is better than having profit seeking businesses but that is a different debate.

Loughton_Monkey

chucky wrote: »

It's immoral that market forces increase rents.

Oh dear, bitterness is getting in the way of rationality with this one...

(Text removed by MSE Forum Team)

To my mind, the 'business' of renting is well protected by law, and tenants have more rights than consumers in some other markets.

What we seem to have in this case is a greedy individual who got onto a BTL bandwagon [as many people are doing today]. If what we hear is true, then his business acumen could well have been unsound - or even highly risky - but that's not immoral.

Maybe the landlord was a bit stupid, but again, that's not immoral.

If he has breached contracts with tenants, then up to a point that might be considered immoral, but not necessarily so.

At a contry show last weekend, I saw a supplier of "Pure Arabica" coffee beans, which their large banner claimed were "organic, sustainable, fair trade, and local produce."

Now that's immoral!

Graham_Devon

CLAPTON wrote: »

But you are making the case as one course of act (business success) is morally acceptable but the unsuccessful business activity is immoral.

I'm not. You are stating I am making that case. You've pumped words into my mouth to argue against since my first post on the subject and clearly nothing is going to stop you creating something to argue with.

So I'm done here.

What I have said is that IMO it is immoral to take such a high risk gamble and pull innocent families into that gamble, only to chuck them out at the first opportunity.

You can make up whatever you like to suit.

OffGridLiving

Dear, oh dear.