Ghost Renters

Turnbull2000

Conrad wrote: »

From another perspective I get to invest £35,000 in fees and deposit and gain a £500 pm after costs return, with 5 year fixed rate mortgages in place.

Effectively a 17% return on my £35000 investment and according to all long term stats I'll do ok on capital growth front. Do you know of a better investment?


I meet LL's that took out I/O mortgages 15/20 years ago which although large at the time, now seem paultry - sums such as £30,000, whereas the rental income in that period has trebled / quadrupled.

So a relatively fixed cost base leads onto an ever increasing rental income.


Plenty of retired LL's I know that have 10 or 20 I/O mortgages now relatively small, and a significant monthly profit. Who cares if they are I/O? If some expire due to age they can just sell a few properties and clear all the remaining mortgages and thus their net income position is relatively unchanged.

Not just those that bought a while ago. I know a couple who are letting out on a filthy cheap residential tracker mortgage, and are clearing about £400 per month pure profit. They bought the property in 2007. With the housing market gaining strength again, their capital gains and rent take is finally growing too.

The money is going towards a war chest for their next purchase. But probably on a BTL mortgage this time, as they too are becoming dirt cheap thanks to Funding for Lending.

drc

Sibley wrote: »

Talking to a mate who owns some houses in London.

Apparently, he has what is known as ghost renters in at least 3 of his places.

Women with children who do not really live at his property.
They have a boyfriend, live with them somewhere else but don't declare it to DHSS.

Of course the taxpayer is copping the rent as it's being paid under housing benefit.

I live in Thailand so I'm asking the question.
Is this common place in UK now?

This is quite common in social housing as the property can then be let at market rent by subletting (although this is now a criminal offence).

I don't think it would make much sense in the private sector as LHA normally doesn't cover the rent so they would have to make up the shortfall of rent to the landlord and that would be pretty silly financially if they weren't even living there.

The only thing I could think is perhaps they were getting the LHA but subletting it to someone who would pay the full market rent and then pocketing the difference?

chewmylegoff

Loughton_Monkey wrote: »

Maybe your mate might find.... er... a business going on in his property as well? Has he visited, say, local telephone boxes? He might see little 'business cards' with the telephone number of one of his properties on it?

Perhaps he should call round unannounced a few times. Might find... um... a lot of 'French Lessons' going on.

Is his reference to ghosts anything to do with receiving complaints from his 'tenants' that the property is so haunted and scary, that something is putting the willies up them?

I think Sibley is more into being taught Greek.

chewmylegoff

Conrad wrote: »

The common ruse we see is where a HB couple pretend to split up and thus qualify for 2 properties one of which they secretly sublet for a substantial rental income. The Kurdish and other minority communities we deal with treat this is an every day perfectly acceptable business practice.

The other I see a lot is a person granted a whopping right to buy discount despite the fact they do not really live in the property and sub let it. The council do not appear to check voting and credit record on each property which is a shame as this would help spot a lot of this casual fraud.

At 2.30 today when a dewy eyed Millipead is banging on about saving the poor, you might want keep in mind that in my real world day to day experience a significant proportion on welfare are simply cunning business people and anything but poor.

Can't really be that huge a scam given that the bloke would only get housing benefit sufficient to cover some tiny hell hole which only another housing benefit claimant would want to live in (if under 35 housing benefit would only cover a room in a shared house). Plus he would have to cover the council tax himself if he was covering his tracks properly.

Sounds like a lot of effort for not much gain. I think I would get a job on balance (no doubt they all have cash in hand jobs like your other clients earning £250,000 a year).

Actually come to think of it - how do you become aware of this? Are you suggesting you are somehow acting as letting agent? Or perhaps they are all getting mortgages for their BTL empires they operate whilst claiming housing benefit?

grizzly1911

chewmylegoff wrote: »

I think Sibley is more into being taught Greek.

tch tch

Loughton_Monkey

chewmylegoff wrote: »

I think Sibley is more into being taught Greek.

Well you may be right. Although Greece are not particularly into ladyboys as far as I know.