Is it worth being a landlord in the UK?

Crashy_Time

Much easier to liquidate shares though, and the dividend probably still gets paid unless the company really gets into trouble, and shares don`t burn holes in your carpet.

markin

bhjm said:

putting all your money in one investment lets say - 200.000£ is like buying shares for 200.000£ from just one company.

you can be lucky and make huge profits
or you can be unlucky and loose a lot of money.

More likely to be a small deposit on many homes in different area to spread the risk.

Retired_Mortgage_Adviser

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")

It's a business, and like any other business it has its pros, cons, opportunities and pitfalls.

As a portfolio landlord operating through a ltd co for more than a decade now, it still works for me. I stick to the basics and don't compromise on the numbers (min 10% ROI). Except for a lull between 2011/12-2015/16 (when the market in my preferred area was overrun with new LLs paying silly prices that any sensible investor could not compete with) I have been adding to my portfolio regularly and only sold HMOs and the odd 1-bed flat close to needing a lease extension.

Ever since the tax-changes, tenant legislation changes, increased use of selective licensing, etc, for me personally it has become much easier to find properties at the right price since the people whipping up a froth no longer see BTL as an "easy way to make money" so you're not competing with silly money.

But, to the state the obvious it isn't for everyone and it is certainly not a passive investment or risk free.

Crashy_Time

https://www.leicestermercury.co.uk/news/local-news/90-leicestershire-streets-landlords-pay-3823399

Crashy_Time

markin said:

bhjm said:

putting all your money in one investment lets say - 200.000£ is like buying shares for 200.000£ from just one company.

you can be lucky and make huge profits
or you can be unlucky and loose a lot of money.

More likely to be a small deposit on many homes in different area to spread the risk.

Easier/safer just to buy a global equities tracker, or property ETF if you must have property, the easy money is over for people who don`t know what they are doing, and in a recession you could end up with empty property spread all over the place, what a nightmare!

Thrugelmir

Fortune favours the brave. Though as with any business idea. There's always the potential for things to go disasterously wrong. 

Crashy_Time

Thrugelmir said:

Fortune favours the brave. Though as with any business idea. There's always the potential for things to go disasterously wrong. 

Nothing particularly brave about the BTL model, it is just a basic debt ponzi leveraged move, the earlier you got in the better though, people wanting to get in now just don`t have any clue about other investments IMO.

jumperabv3

Crashy_Time said:

Thrugelmir said:

Fortune favours the brave. Though as with any business idea. There's always the potential for things to go disasterously wrong. 

Nothing particularly brave about the BTL model, it is just a basic debt ponzi leveraged move, the earlier you got in the better though, people wanting to get in now just don`t have any clue about other investments IMO.

Can you suggest other better investments please?
As long as interest rates remain low I don't see this trend changing, it could take even another decade or more to see a change in the real estate market - as a 2012 buyer I am not looking to sell now.

Retired_Mortgage_Adviser

Hard to label it better or worse but other (potentially) inflation-beating options are -

1. P2P (lots of options across the whole risk spectrum)

2. S&S Isa - use it to hold low cost index funds (such as Vanguard ones)

3. Additional pension contributions (especially if you're a higher/additional rate taxpayer)

Of course, only someone looking at the entirety of your circumstances can recommend what is isn't suited to you. And to state the obvious, the higher the potential return, the higher the risk.

snowcat75

Like everything it all depends, property, person, location.
I had/have what is essentially a BTL by accident which I ended up with as a self builder,

Final Tennant is (fingers crossed) due to leave at the end of month, The house will then be sold.
I have never had a "bad tenant" but again never had a good one, and as a LL you realise that your fairly powerless to deal with the ones that sneak pets in, don't cut the grass, don't report serious issues (because there not affected), the list is endless. 

Deposits rarely cover the costs of putting a property back into a decent condition. 

The returns are fairly poultry for the time work and hassle involved. A damaged carpet needing replacement pretty much removes a years return.


My advice find something else to do with the money.