Why Become a Landlord?

Cotta

I'm aware that Landlords get a bad rep, however I have always been of the opinion that if they provide a good service at a reasonable price then there should not be any issues. In fact having an economy that encourages such entrepreneurial activity can only be a good thing. However with changing laws and with Landlords always vulnerable to the next change is there any point in this day and age in being a Landlord within the UK? Furthermore could we be seeing the end of the Landlord?

p00hsticks

Cotta wrote: »

Furthermore could we be seeing the end of the Landlord?

Well, given that the end of the landlord by definition also means the end of being able to rent property, I'd say most definitely no.

What I think (hope) we may see at least a reduction in is those 'accidental' amateur landlords who just decide to hang onto existing properties when moving on because ' it's a good passive investment' and don't take their landlording responsibities seriously.

ThePants999

p00hsticks wrote: »

What I think (hope) we may see at least a reduction in is those 'accidental' amateur landlords who just decide to hang onto existing properties when moving on because ' it's a good passive investment' and don't take their landlording responsibities seriously.

Agreed, and I think that's the key point.

I think that property ownership and letting as a proper business is both (a) a "good thing", as Cotta put it, and (b) unlikely to be rendered non-viable by changes in the law, as the government agrees with (a). However, property ownership and letting as a thing individuals do on the side because they see it as a way to make easy money from a property they happen to own is fraught with problems, and I wouldn't mind seeing those who don't treat it as a business put OUT of business.

babyblade41

I done it professionally both industrial and private and I had had enough .. You need a reasonable amount to cover voids and those who don't/won't/can't pay plus the costs involved in refurbishment etc .

Being a LL is a full time Job, it's just a shame some people think it's easy money, it doesn't help the rental market at all both for the tenant or land lords

Comms69

Cotta wrote: »

I'm aware that Landlords get a bad rep, however I have always been of the opinion that if they provide a good service at a reasonable price then there should not be any issues. In fact having an economy that encourages such entrepreneurial activity can only be a good thing. However with changing laws and with Landlords always vulnerable to the next change is there any point in this day and age in being a Landlord within the UK? Furthermore could we be seeing the end of the Landlord?

I think you mean is this the end for mr jones who inherited a property and rents it out as a one off. probably.


Will the market be filled with large commercial landlords - definitely.


is that a good things - not sure yet. Large landlords are usually good for repairs (have their own people), up to date on legislation (again maybe with an admin person) and generally understand the dynamics better. Conversely they are more likely to stick to a policy and be less approachable.

Cotta

Comms69 wrote: »

I think you mean is this the end for mr jones who inherited a property and rents it out as a one off. probably.


Will the market be filled with large commercial landlords - definitely.


is that a good things - not sure yet. Large landlords are usually good for repairs (have their own people), up to date on legislation (again maybe with an admin person) and generally understand the dynamics better. Conversely they are more likely to stick to a policy and be less approachable.

Why is Mr. Jones more impacted? Surely if his house is in a cood state if repair and if something happens he can get the issue resolved then that's enough?

FreeBear

What about live in landlords that rents a room to a lodger or two ?

With a seemingly ever increasing number of under occupied properties, there are plenty of people in a position to rent a spare room.

p00hsticks

Cotta wrote: »

Why is Mr. Jones more impacted? Surely if his house is in a cood state if repair and if something happens he can get the issue resolved then that's enough?

Because Mr Jones typically only has the one property - therefore as soon as something goes wrong (tenant trashes place, tenant doesn't pay rent, tenant simply moves on and landlord can't get a new one in for a few months) the business is not bringing in any income and, if Mr Jones still has a mortgage, is making a loss. Mr Jones therefore could find himself struggling to find the money required to address whatever the issue is. And the problem isn't necessarily one that's easily and quickly fixable even if the money is available - getting a non-paying tenant evicted can take months.

A 'large' professional landlord with multiple properties has mutliple sources of rental income and can factor into their business model that a certain percentage may be unoccupied/ require repair at any one time.

theartfullodger

Greed seems the usual reason.

The "accidental landlord" btw is a myth. They all know they are becoming a landlord.

Artful:. Landlord

Comms69

Cotta wrote: »

Why is Mr. Jones more impacted? Surely if his house is in a cood state if repair and if something happens he can get the issue resolved then that's enough?

Because mr jones is a one man band. His income is insufficient to employ people and must rely on contractors. his profits are squeezed by changes in taxation and he's unable to absorb the costs of voids like a large commercial landlord might.


It's economies of scale.


If you have 50 properties, each paying £500 a month, your income is £25,000. You can afford to employ a fulltime handyman to deal with call outs, thereby factoring in the lower cost of an employee - hypothetically it's £2000 a month. Whereas each callout might cost Mr Jones £200-250 on it's own.


Similarly you can refurb a property at the end of the tenancy factoring in only a drop of 2% in your total income. Whereas a refurb for mr jones means 100% of income is gone.


You can bulk buy goods - if you let out to students for example, you can buy 10 mattresses for a cheaper rate than mr jones buying 1 or 2, where the final price you pay is actually not that different.


that type of thing

gardian8

I am an "accidental" landlord with 1 property but I would have another if we were not moving home. At the time, it was more economical for us to convert our old house to BTL and release equity for a new house than it was to sell it in a poor market. This way we are earning a little bit from the rent and still have an asset to sell in a few years time. I don't understand the stick landlords get TBH. it works for us at the minute and I'm sure there are many others in our position.