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Why Become a Landlord?
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What makes you think landlords are entrepreneurial? If they bought a house and did it up, or made structural changes to make it more attractive in the marketplace then yes. Not many do this. Most are wannabe rentiers who add no value.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.0 -
The reason large-scale landlords are less affected isn't just things like dedicated handymen.
It's like investing in equities. If you have a diversified portfolio, some of your shares will go up, some of them will go down, and across the board, you'll see relatively smooth returns. If you buy the shares of just one company, then on average, you'll get the same return - but you'll see massively more volatility. You might make a fortune, you might lose the lot.
The average returns from buy-to-let aren't just about rents and capital gains versus money invested and financing costs. It's also reduced by void periods, non-paying tenants, damage to the property, maintenance costs, etc. Across a broad property portfolio, you'll have some dream tenants that spend their lives in the property never missing a payment and some nightmare tenants who trash the place and don't pay the rent; you'll have properties that go years without anything needing done to them, and properties where you just have the WORST luck with boiler failures, leaks and so forth. Chances are, it'll all average out. A hundred small-time landlords with one property each will see exactly the same average rate of problems - but the ones with the worst luck are stuffed.0 -
How do you know? Any figures to back that up? Don't a lot of people with one rental property own it outright whereas larger scale BTL's carry significant debt?ThePants999 wrote: »
The average returns from buy-to-let aren't just about rents and capital gains versus money invested and financing costs. It's also reduced by void periods, non-paying tenants, damage to the property, maintenance costs, etc. Across a broad property portfolio, you'll have some dream tenants that spend their lives in the property never missing a payment and some nightmare tenants who trash the place and don't pay the rent; you'll have properties that go years without anything needing done to them, and properties where you just have the WORST luck with boiler failures, leaks and so forth. Chances are, it'll all average out. A hundred small-time landlords with one property each will see exactly the same average rate of problems - but the ones with the worst luck are stuffed.
Equally people with smaller numbers of properties are more likely to have another (primary) source of income than those with more who are landlords as a career. It far safer to have two sources of income than one.0 -
JayRitchie wrote: »How do you know? Any figures to back that up? Don't a lot of people with one rental property own it outright whereas larger scale BTL's carry significant debt?
Equally people with smaller numbers of properties are more likely to have another (primary) source of income than those with more who are landlords as a career. It far safer to have two sources of income than one.
What like having 10 tenants in 10 properties instead of 1?0 -
It seems to me that its the big boys who are always on tv including the housing charitys! The 'accidental' amateur landlords if anything seem often to be over protective and don't want their former home to become tip.0
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It seems to me that its the big boys who are always on tv including the housing charitys! The 'accidental' amateur landlords if anything seem often to be over protective and don't want their former home to become tip.
I don't think you can judge a situation by what appears on TV.
A private landlord with a single property is unlikely to go on TV anyway. They have nothing to gain from it. Whereas housing charities (for example) can raise their own profile by doing so.
You have to appreciate that before anyone appears on a camera from a business, someone in comms has already considered the implications.
Most individual landlords aren't in that position.0 -
Well, a doctor with two buy to lets has an income from employment and from rentals (plus a significant pension accumulating). If legislation changes and property becomes a less lucrative investment its not a real problem. If someone has ten properties all at, say, 60% LTV and interest rates rise the are stuck with one asset class for income.What like having 10 tenants in 10 properties instead of 1?0 -
I don't think you can judge a situation by what appears on TV.
A private landlord with a single property is unlikely to go on TV anyway. They have nothing to gain from it. Whereas housing charities (for example) can raise their own profile by doing so.
You have to appreciate that before anyone appears on a camera from a business, someone in comms has already considered the implications.
Most individual landlords aren't in that position.
The last show i watched the housing charity would not be on camera, it was statement letters from the lawyers or PR read out.
It seemed more like they were running for profit!
Infact most stories in the dailymail are not very flattering to any off them.
Dispatches 2019 03 25 New Landlords From Hell ,All about Sanctuary Housing.Sanctuary Group is a housing and care provider. ... We are a registered, exempt charity, which means instead of returning a profit to shareholders, every penny we make must be used to improve homes and services, and build new social housing.0 -
How do I know what, exactly? What figures are you looking for? I think you've misunderstood my argument, but I can't quite tell how.JayRitchie wrote: »How do you know? Any figures to back that up?
A person who rolls a thousand six-sided dice and averages them will see a value very close to 3.5. A person who rolls a single die will, before the fact, expect 3.5, but actually stand a significant chance of getting a 1, or a 6.
This doesn't need data, it's just how probability works. If you have a population distributed around a mean, a large sample will come close to the mean, but a small one could vary significantly. If 10% of tenants suck, then someone with a thousand properties will probably have about a hundred sucky tenants; someone with a single property will probably have a good tenants, but has a 10% chance of a sucky one.
What's your point?JayRitchie wrote: »Don't a lot of people with one rental property own it outright whereas larger scale BTL's carry significant debt?
To a rational investor, there's no significant difference between fully owning a property and part-owning it. The returns on having £10M invested in property aren't hugely different between having 100% of 50 houses or 50% of 100.
And it's far safer to have a hundred than two. That's my point.JayRitchie wrote: »Equally people with smaller numbers of properties are more likely to have another (primary) source of income than those with more who are landlords as a career. It far safer to have two sources of income than one.0 -
It's "not a real problem" for the doctor because, assuming they're sensible, if BTL ceases to offer an adequate return on their investment, they'll evict their tenants and sell the properties. That IS a real problem for the tenants!JayRitchie wrote: »Well, a doctor with two buy to lets has an income from employment and from rentals (plus a significant pension accumulating). If legislation changes and property becomes a less lucrative investment its not a real problem. If someone has ten properties all at, say, 60% LTV and interest rates rise the are stuck with one asset class for income.0
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