For those thinking of becoming a LL

ognum

eddddy wrote: »

Letting property is a business, and returns will vary a lot depending on how well you run the business. (A more competent LL might make a good profit, where a less competent LL might not.)

As a trivial example, ognum mentioned he replaced a boiler. Do you get a Worcester Bosch (which will last 15 to 20 years), or a budget boiler? Do you get BG to install it, or a small local firm? That decision alone could make a difference of £2k to £4k on your income in the year (and impact your income in future years).

As another example... How well do you profile your tenants? Do you target tenants who work for secure employers, and who are likely to want to stay in your property for many years? Or do you accept any tenant your agent finds, as long as they pass a referencing check?

There are also bigger issues about how good you are at choosing the best properties to buy for letting, keeping a good handle on your letting agent etc.

Yes I agree, did get a Worcester Bosch, work was done local plumbers I now and then, retail your could have got a cheaper boiler but wanted quality and reliability.

My tenants are all working professionals, all work in high tech industries around Cambridge all have stayed more than a year. My new property let to a professional couple, the first that viewed of many. Referenced well. Property let three weeks after completion. Property within half a mile of a major teaching hospital and quarter of a mile from high tech firms.

My one eviction was a tenant I had for several years who was a great tenant, she then met a man and everything went down hill! This flat was not close to home and is currently sold subject to contract as I can't deal with a property many miles away.

I don't claim to be the best LL, my concern is keeping my tenants happy and maintaining good quality properties. Sometimes it means I don't make so much profit but I am in a fortunate position not to need to scrape for every penny.

I started this post simply to let others know it's not all cash coming in as a LL, yes you are right you need to spend wisely as well.

Crashy_Time

zebulon wrote: »

I don't think due to the exchange rate, the opposite actually but maybe I don't see what you mean ? (Right now someone's 1 Euro - if from euro zone - is worth c. £0.10 more compared to day before referendum)
But then Brits living in EU may be coming back if getting income paid in GBP (a colleague had rent raised because her LL abroad were losing on exchange rate)
Vibes and uncertainty yes probably !

Sorry this was off topic but I wondered if I missed something re. exchange rate! (currently waiting to move some EURO ...)

I was thinking about Poland specifically because of the numbers that have moved here. Exchange rate for Poland spiked in the early 2000`s, when rents and house prices were much cheaper here, so people could save and send money home, probably to buy property there? Although the exchange rate is spiking back up a bit it isn`t consistently as good as it was, and the extra housing costs and benefit cuts are also a drag on how much income people can expect here. With the Brexit vote, Polish economy supposedly doing well, much higher costs to buy a home here since the first wave of immigration from Poland and the strains on infrastructure here from all types of immigration many may well see this as the time to go?

Cakeguts

zebulon wrote: »

I don't think due to the exchange rate, the opposite actually but maybe I don't see what you mean ? (Right now someone's 1 Euro - if from euro zone - is worth c. £0.10 more compared to day before referendum)
But then Brits living in EU may be coming back if getting income paid in GBP (a colleague had rent raised because her LL abroad were losing on exchange rate)
Vibes and uncertainty yes probably !

Sorry this was off topic but I wondered if I missed something re. exchange rate! (currently waiting to move some EURO ...)

Depends which part of the country your rented properties are in. If you can't earn much more than you can at home there is no point in moving to the UK. I would suspect that the most affected areas will be ones with high wages or very cheap housing.

Crashy_Time

http://www.housepricecrash.co.uk/forum/index.php?/topic/229534-cambridge-drops-10/

Crashy_Time

Is there a BTL sell off happening in Cambridge?

trailingspouse

Speaking as someone who will have to make a decision one day on what to do with my parents' house, this was very interesting. The house is close to university and teaching hospital, so potentially renting would be the way to go - but when the time comes I will be going in to it with my business head on.

martinsurrey

Crashy_Time wrote: »

http://www.housepricecrash.co.uk/forum/index.php?/topic/229534-cambridge-drops-10/

Crashy_Time wrote: »

Is there a BTL sell off happening in Cambridge?

That top thread seems to be really cherry picking stats isnt it?

The 12% "fall" is on actual sales prices which is a useless stat unless you know the make up of the properties sold in each period

Due to the stamp duty changes the top end of the market is moving slower, so fewer larger sales moves the average "sold" price lower.

Page 9 shows that the £ per sq m in Cambridge is up YOY

Page 8 shows that the average lower quartile price has gone up YOY

So in Cambridge, you are paying more for every meter you buy and the lower end of the market has got harder.

cashbackproblems

BTL is mostly dead now for individuals people are only now slowly waking up to the tax changes which are being implemented.

cashbackproblems

Especially if you are a cash buyer! If leveraging I could understand it still being profitable just.


200k in a mid range fund will give you 5-10% quite easily. So 20k per year. Depending where in the country you are you get 1k per month rent, so 12k per year. Plus agent fees, repairs, risk of bad tenant etc.

Cakeguts

trailingspouse wrote: »

Speaking as someone who will have to make a decision one day on what to do with my parents' house, this was very interesting. The house is close to university and teaching hospital, so potentially renting would be the way to go - but when the time comes I will be going in to it with my business head on.

Just thought I would add this as it might help you. My mother's house was rented when she went into a home and it was a good thing in the end because when she died it took several years to sort out her estate and at least the house was occupied for all those years. However the amount of rent that you could get for it was considerable less than for a different house in a different area costing less. It was also more difficult to let. A house costing around £20k less let for £125 a month more and more easily because it was more appealing and being more modern better insulated. This may not sound a lot but the difference between £550 pcm and £675 pcm is quite a lot. The houses are in Greater Manchester.

The reason why there was so much difference was down to the fact that my mother chose an old 2 bed detached cottage to live in when she retired. The cottage as a property to buy to live in was quite desirable but being very old had the maintenance problems and parking problems of old buildings. The modern semi detached 3 bed with its off street parking on a modern estate close to all amenities is more appealing to people looking for a rented property because it has what they want. They don't own the building so they are less inclined to put up with the problems that an older property might have. The modern 3 bed semi was cheaper to buy because it wasn't an individual old cottage just a standard modern 3 bed semi. These two houses are I think a very good example of the difference between what someone might buy to live in as opposed to what someone might want to rent.

The rents might not appear to be very high. But we prefer slightly lower rents and very few voids which is what we get.