Not a time to be a buy-to-let landlord

mwpt

westernpromise wrote: »

Who sees it like that then? The returns on housing are marginal. I own a place worth about £950k that lets for £30k a year. If 3% gross is huge return I'd hate to see what you'd consider a paltry return.

You've ignored capital gains because it doesn't suit your narrative. As usual, you're disingenuous.

You really haven't looked into this at all, have you?

And I believe you're a liar with an ulterior motive who twists everything to suit your narrative. I'm placing you on ignore from now on, it's not worth my time.

Graham_Devon

westernpromise wrote: »

If they over consume a valuable resource then under my proposals they would be taxed.

Astonishing. Just astonishing.

Why is it astonishing? Happens in a lot of other areas.

Council tax. Fuel taxes. Green levys etc. It's just happened with second homes.

CLAPTON

cells wrote: »

also what a lot of the German fans do not realize is that in Germany there are quite a lot of institutional landlords. For instance one REIT company in germany owns over 300,000 homes and there are a lot of residential REITs in Germany.

These companies will never sell to owners they will only transact in volumes of thousands between themselves. This means that in Germany and any "german copy cat" ownership can not go as high as in the UK model whereby a middle age landlord buys one house and can only hold onto it for 20-30 years before age/divorce/death forces a sale and an opportunity for the public to buy.


Personally I think a mix of the two would be better.
The UK needs a few residential REITs so investors who want housing exposure need not become landlords themselves just buy REIT shares. But also I think its quite good to have the option of small time landlords (majority of landlords only have 1 property) who perfer to have a house as a savings/pension plan rather than pay some London banker and fund manager to manage some shares portfolio

I don't understand your point: there is nothing I know of that stops residential REITs in the UK
if there is a profitable market in REITs I'm surprised no-one has seen that and made a fortune... maybe an opportunity for a member of this board?

cells

CLAPTON wrote: »

I don't understand your point: there is nothing I know of that stops residential REITs in the UK
if there is a profitable market in REITs I'm surprised no-one has seen that and made a fortune... maybe an opportunity for a member of this board?

well clearly the city did miss out on that train which has been quite profitable for the last 20 years.

Why has no one done it? well I dont know, there are companies that own homes some a lot of homes but none on the scale to be a FTSE 100 company.

However rental residential property as an asset class is huge worth over £1 trillion just that some 90% is held by individuals.

If I had £10B I would try to create a pure residential reit. £5B for a London Reit and £5B for a rEngland Reit.

cells

I think its probably due to a chicken and egg problem. Small property investment companies (reits) would have to go to banks and banks typically charge more for company mortgages than individuals so that policy by banks has pushed residential rental ownership towards people rather than companies.

Large Reits however could potentially issue their own paper bypassing the banks altogether which is what the biggest German Reit does. But for that to work you are probably looking at the scale of ~50,000 or more homes and very few individuals or companies could commit to such a large investment.

I did have one idea which was if a big enough REIT could be set up, say 1,000 homes then maybe some landlords would be willing to swap their investment properties for shares in the REIT. I would consider that. It would have a cost (stamp duty) but also potential advantages like holding shares in a pension or ISA.

Personally I think there is no good reason why a top 20 FTSE 100 company could not be a residential REIT

CLAPTON

cells wrote: »

well clearly the city did miss out on that train which has been quite profitable for the last 20 years.

Why has no one done it? well I dont know, there are companies that own homes some a lot of homes but none on the scale to be a FTSE 100 company.

However rental residential property as an asset class is huge worth over £1 trillion just that some 90% is held by individuals.

If I had £10B I would try to create a pure residential reit. £5B for a London Reit and £5B for a rEngland Reit.

whilst I have no strong views on the desirability or otherwise of REITs as investment vehicles, I don't see they will improve the housing situation in any substantial way

antrobus

lisyloo wrote: »

I don't think that was it.
There's a huge difference cost wise and otherwise between people living independently with assistance (wardens, visiting care, meals on wheels) and nursing or care homes which cost a great deal more.
...

I'm not sure what level of care the poster concerned had in mind as far as 'HMO's for old folk' were concerned. It can obviously vary from almhouses at one end of the spectrum, to full blown nursing homes at the other.

antrobus

westernpromise wrote: »

...I'd vote for that. If we had German tax treatment of rental property we'd be allowed to charge depreciation off against the rent. So you buy a place for £500k, depreciate it over 50 years meaning you deduct £10k from the net rent before calculating the tax. The result would in most cases be no tax charged to landlords at all. That would flow to some extent into cheaper rents. Everyone wins!...

That's basically the way it worked.

Plus a good deal of the burden of maintenace got shifted on to the tenant.

antrobus

CLAPTON wrote: »

whilst I have no strong views on the desirability or otherwise of REITs as investment vehicles, I don't see they will improve the housing situation in any substantial way

REITs in Germany only date back to 2007.

Most of the German PRS was built by private individuals, and is still owned by private individuals.

westernpromise

antrobus wrote: »

That's basically the way it worked.

Plus a good deal of the burden of maintenace got shifted on to the tenant.

Yes, as I recall it is usually the tenant's job to put in the kitchen, bathroom and light fittings, etc. You can rent a place that has these in already, but usually they will be whatever the previous occupant abandoned.

German apartment buildings tend to be purpose built and hence to requrie as littel maintenance as possible. You don't get any white stucco, for example.