Investments gone wrong!!

MrsCurly_2

My husband owns some investment properties, all of which have been a nightmare from the start.

If he could go bankrupt he would!

One owned is with NRAM on the together mortgage so if sold it would have around £40k outstanding - the tenants don't cover the mortgage so we are losing money on this.

Two are owned with another person on the mortgage and were purchased via a property club - again there is negative equity there too and the rent doesn't cover the mortgages so we are losing more money.

The reason we can't go bankrupt is because of the other person on the two mortgages who owns his own home and other investments and also because we own our own home.

Is there any advise for this situation? We have tried to transfer the mortgage into my husbands sole name but this wasn't possible due to affordability.

My husband had the best intentions in trying to secure our future but the last 4 years have been awful when we simply want to enjoy our family.

Any good advise would be greatly appreciated as we are seriously depressed over this, it has worn us down.

Thank you

Pixie5740

Are these mortgages BTL mortgages or at the very least residential mortgages with consent to let? As a rule of thumb a condition of a BTL mortgage is that the rent is at least 125% of the mortgage repayments. Is that the case with all these rental properties? If not is there scope to increase the rent so that it does (if the local rental market would allow)?

Credit-Crunched

MrsCurly wrote: »

My husband owns some investment properties, all of which have been a nightmare from the start.

If he could go bankrupt he would!

One owned is with NRAM on the together mortgage so if sold it would have around £40k outstanding - the tenants don't cover the mortgage so we are losing money on this.

Two are owned with another person on the mortgage and were purchased via a property club - again there is negative equity there too and the rent doesn't cover the mortgages so we are losing more money.

The reason we can't go bankrupt is because of the other person on the two mortgages who owns his own home and other investments and also because we own our own home.

Is there any advise for this situation? We have tried to transfer the mortgage into my husbands sole name but this wasn't possible due to affordability.

My husband had the best intentions in trying to secure our future but the last 4 years have been awful when we simply want to enjoy our family.

Any good advise would be greatly appreciated as we are seriously depressed over this, it has worn us down.

Thank you

Sadly, you took a financial gamble and it has not paid off.

Investing in a sole asset class is high risk, which you have found out the hard way.

It is just a matter of riding this out, and taking it as a hard lesson. Sadly, these TV programmes that show 30% profit in 3 months are few and far between.

Sorry I can't offer any solutions.

MrsCurly_2

Thank you - I thought as much as we have tried every which way of trying to rectify this mess. They are BTL mortgages and residential with consent to let but taken out years ago.

Over the years we have also had horrendous tenants who we have had to evict on all the properties and significant remedial works - it has been complete nightmare and remains so.

A huge thing I have realised is the lack of support for landlords out there. So much support for tenants who choose not to pay their rent and can stay in the property not paying for as long as it takes to evict them - this the has a knock on effect with the lives of the landlord who may just be a family man trying to make ends meet.

We have been riding it out but it is the hardest thing I've ever had to endure - I stand my my husband as they were his investments before we were married but it is completely depressing and worrying that we could lose everything including possibly friends.

MrsCurly_2

I'm not 100% sure why the rent doesn't cover 125% of the mortgage payments - we have spoken to all the lenders regarding the situation. There isn't any way of increasing the rent sadly - plus we have to management due to their locations.

Voyager2002

"The reason we can't go bankrupt..." I think it is time to start playing 'hard ball' with the other person: tell him that you can no longer sustain the situation; you are exploring bankruptcy; you are unable to continue paying your share of the mortgages on the jointly-owned properties.

As for owning your own home: many people are able to go bankrupt without losing their homes (take advice on this) and in any case a move into rented property might be a better option than continuing misery.

Credit-Crunched

MrsCurly wrote: »

Thank you - I thought as much as we have tried every which way of trying to rectify this mess. They are BTL mortgages and residential with consent to let but taken out years ago.

Over the years we have also had horrendous tenants who we have had to evict on all the properties and significant remedial works - it has been complete nightmare and remains so.

A huge thing I have realised is the lack of support for landlords out there. So much support for tenants who choose not to pay their rent and can stay in the property not paying for as long as it takes to evict them - this the has a knock on effect with the lives of the landlord who may just be a family man trying to make ends meet.

We have been riding it out but it is the hardest thing I've ever had to endure - I stand my my husband as they were his investments before we were married but it is completely depressing and worrying that we could lose everything including possibly friends.

Sadly, this is the case. Lots of people view landlords as affluent money grabbing members of society. However, a lot of the time is is your average Joe who has sunk their life savings into a property on the guise that it will be a 'sure thing'.

The courts, as you mentioned, seem to side on the tenants, and they hold all the cards.

As I said, sadly a life lesson learnt.

MrsCurly_2

Thank you all.

How would/could bankruptcy work in this situation if we did decide enough is enough?

Would my husbands friend be left with the joint properties on his own?

Is there anyone that could give us some advise on change of use for property? The sole mortgage is in an ideal location for a B&B so one thought was to lease it to someone who could run a B&B? Or we move there and rent our current home?

Credit-Crunched

MrsCurly wrote: »

Thank you all.

How would/could bankruptcy work in this situation if we did decide enough is enough?

Would my husbands friend be left with the joint properties on his own?

Is there anyone that could give us some advise on change of use for property? The sole mortgage is in an ideal location for a B&B so one thought was to lease it to someone who could run a B&B? Or we move there and rent our current home?

http://www.osmondandosmond.co.uk/component/flexicontent/61-insolvency-bankruptcy/310-bankruptcy-and-co-ownership-of-property

floopnoodle

MrsCurly wrote: »

I'm not 100% sure why the rent doesn't cover 125% of the mortgage payments - we have spoken to all the lenders regarding the situation. There isn't any way of increasing the rent sadly - plus we have to management due to their locations.

Hi MrsCurly

What is the monthly shortfall?
Why can't you increase the rent?
What is the estimated market rent vs what you are receiving?
What are your current tenants like and are they in arrears?
How much are you paying for management?

Just a few questions which I think will allow more people to help you.

Pixie5740

Credit-Crunched wrote: »

Sadly, this is the case. Lots of people view landlords as affluent money grabbing members of society. However, a lot of the time is is your average Joe who has sunk their life savings into a property on the guise that it will be a 'sure thing'.

The courts, as you mentioned, seem to side on the tenants, and they hold all the cards.

As I said, sadly a life lesson learnt.

Many people seem to view letting property as a passive investment which of course it's not, even when you use a letting agency.


Landlords can protect themselves by joining a landlord association to keep abreast of changes in housing law and get invaluable help and support, by taking an active role in referencing tenants, and by doing some research before ploughing their money into an "investment" property.