Is it worth being a landlord in the UK?

jumperabv3

I've watched several episodes of "Nightmare Tenants, Slum Landlords" on YouTube... I was wondering if Buy To Let is even worth it nowadays with all the taxes/fees/licences involved? (e.g. some councils decided to require a licence from properties in the area - i.e. it's another type of "tax") - downside reasons for being a landlord in my opinion are:

1. It looks like tenants can decide to stay in your property, don't pay the rent, then it would take you 6+ months to get them out, legally.
2. Websites which discuss such topics advise landlords to get into a compromise and even offer the problematic tenants some cash or anything similar in order to make them leave the property.
3. Taxes/Fees etc. as mentioned kill the yields you would get as an investor.
4. Assuming you take a mortgage - those rent arrears can jeopardize your mortgage and put you in financial ruin

I'm sure you get the gist of it - could you please advise, if you do BTL - do you see the picture differently than the way it's shown on "Nightmare Tenants, Slum Landlords"?

MSforums

Even if you make 1 penny profit, it is worth it. Profit is profit and is not to be turned down!!

theartfullodger

If you only make 1p profit on a £100,000 investment you'd be better off in any one of hundreds of savings accounts.

In answer to the question. If you can tell me the tax rates and house price and rental rates over the next 10 years I'll tell you it looks promising or not.


All investment, even cash under the bed, is a gamble.  Yes, even UK government bonds.

AnotherJoe

MSforums said:

Even if you make 1 penny profit, it is worth it. Profit is profit and is not to be turned down!!

Investment a returns 1p, alterantive investment b returns £10,000 and yet according you they are identical?

Stubod

I guess it depends on your attitude to risk. You may find a cheap well maintained property for (say) £100k that has a rental return value of over 5% and the property itself also increases in value at least equal to inflation. You may then get a really good tenant that pays on time and really looks after your property. (They don't tend to make TV programmes about these as it is not very entertaining). 

On the other hand you may not.....

Personally if I had my time again I would have sold a property we inherited rather than rent it out.... (and touch wood our tenant has been really good so far...)  

tom9980

My returns are 8%+ based on initial investment for rental income and a further 5% capital gains, that's what happens when you buy at the bottom of the market. I had opportunity to buy further in 2015-17 but felt political risk was too high and the legislation being brought to bare could only erode the potential returns on property, so my investments have all been into pensions instead.

I cannot see a good reason to become a new landlord or indeed increase existing portfolios further at the moment until things settle down. I almost sold up last September but had a chance to secure a good tenant at a very attractive rent.

jumperabv3

Stubod said:

Personally if I had my time again I would have sold a property we inherited rather than rent it out.... (and touch wood our tenant has been really good so far...)   

If you were to sell your property instead of renting it out (with a good tenant so far, touch wood) - what would you have done with the funds from the sale? Where would have you invested them?

Nebulous2

Apparently it isn’t as worthwhile as it used to be.......
https://www.theguardian.com/money/2020/feb/08/britains-buy-to-let-boom-is-over-we-should-rejoice

csgohan4

MSforums said:

Even if you make 1 penny profit, it is worth it. Profit is profit and is not to be turned down!!

I can make more profit than you then without needing to rent out, plenty of 1p on the street which I pickup, no consequences and free and no tax to pay

on a serious noted you should ask yourself why is it not worth being a LL and start from there

Hasbeen

jumperabv3 said:

I've watched several episodes of "Nightmare Tenants, Slum Landlords" on YouTube... I was wondering if Buy To Let is even worth it nowadays with all the taxes/fees/licences involved? (e.g. some councils decided to require a licence from properties in the area - i.e. it's another type of "tax") - downside reasons for being a landlord in my opinion are:

1. It looks like tenants can decide to stay in your property, don't pay the rent, then it would take you 6+ months to get them out, legally.
2. Websites which discuss such topics advise landlords to get into a compromise and even offer the problematic tenants some cash or anything similar in order to make them leave the property.
3. Taxes/Fees etc. as mentioned kill the yields you would get as an investor.
4. Assuming you take a mortgage - those rent arrears can jeopardize your mortgage and put you in financial ruin

I'm sure you get the gist of it - could you please advise, if you do BTL - do you see the picture differently than the way it's shown on "Nightmare Tenants, Slum Landlords"?

I would say its worse for the landlords as shown on TV. Tenant can stop paying for months. Landlord spends thousands to legally evict then finds property damage of other thousands. No chance of getting any money from tenant who moves on and does same again. New laws give the tenant all the rights and hit the landlord with all the costs.
These days I would say its not worth the hassle.  

lees80

In the current market? Probably not, unless you had decent money to invest. Then if you had decent money to invest you could probably get a good return elsewhere. As others have said, lots of current landlords bought at the bottom of the market and that makes it viable for them, because their initial outlay was low to begin with. Nowadays deposits are higher, taxes are higher, and the legalities are stricter in terms of what the landlord has to offer to protect the tenant. 

Too many people see BTL as a quick fix to making money - it isn't. If you can commit to a long term investment and remain professional throughout, you might stand a chance. Truth of it is most people jump in feet first without realising what they're getting into - then head to these forums to complain about it.