Do landlords not get to keep their properties after the mortgage is paid off by tenants?

theoldmiser

Thrugelmir said:

Downside of property is illiquidity. Exit can be a costly and time consuming process. 

Investments held in a pension can be accessed at anytime. Tax advantages as well. 

I spend more time managing my own investments than a LL does looking after a BTL or two. 

"Exit can be a costly and time consuming process."

So in 25 years' time, when my hypothetical Buy To Let is worth £300,000 (rather than the £200,000 I bought it for), selling it for £300,000 is somehow going to be "costly" to me. How will I cope with the £300,000 minus estate agents' fees, etc.? I'll probably have £290,000 left. Oh the humanity!

Slithery

WARNING - OLD THREAD ALERT!

theoldmiser

warwick2001 said:

To give a quick example, I rented out a house for 6 years. After all the mortgage payments etc. had been sorted, I 'made' £60 a month from the rent. And then in the 7th year, it needed a load of repairs on the roof (the house is approx. 100 years old, lovely slate roof). This cost me £4,500. So, ALL profits made in the preceding years was gone, and probably for the next 10 years as well. So on a purely business front, the house will cost me money. So I sold it. The reason I'm giving this example.... Letting property is not just sitting back and watching the money roll in. There are many times where it WILL cost you money. That's the risk of letting, its not always the gravy-train some people think it is.

You say that 'all' profits made in the preceding years were gone, but how much had the house risen in price over those six years? How much did you sell the house for, and how much did you buy it for? Would you care to give us those figures, since they do have a slight bearing on your claim that all your 'profits' were somehow lost?

Letting properties IS just sitting back and watching the money roll in, 99% of the time. IF you buy a decent house that isn't 100 years old and falling to bits, and know the basics of DIY, and have the slightest ability to judge people's character and find good tenants (as well as getting good references, etc.)

TadleyBaggie

Slithery said:

WARNING - OLD THREAD ALERT!

But to be fair, they were the OP. Only taken them 15 months to reply.

theoldmiser

AdrianC said:

moneysavinghero said:

The OP has already stated that rental payments will cover the interest payments on the mortgage. He's not paying it, the tenant is, that's his whole point.

Indeed it is. His whole point is based on a total misunderstanding of, well, everything.

CGT would be payable on the shares as well.

True - but a lot easier to spread between tax years.

So I've been a landlord for three years now. I'm just exhausted after having to do NOTHING for 99.9999% of that time, in order to receive my monthly rent... I don't know how I've coped. Apparently I have a "misunderstanding of, well, everything", but AdrianC just couldn't be bothered to tell us all (and therefore help us all) ...

I've had to buy a new washing machine for the house because the twenty year old one I had in there finally stopped working. £400 including removal of the old one, I spent ten minutes online buying it, and that was it, the company I bought it from delivered it, removed the old one, and fitted the new one. Exhausting, as I said.

My tenant has never missed a payment, the house still looks as good as when they moved in three years ago. They say they love living there and don't want to leave.

So again I say - most (or a lot of) landlords keep pleading poverty, and try to tell you that being a landlord is difficult,a and make up all these scare stories about how terrible it can be, etc.etc. when in reality they are doing !!!!!! all and getting paid a fortune for it. I know, I'm doing it, and I'm doing !!!!!! all for my monthly rent payment.

Is anybody here going to seriously claim that house prices are not going to be significantly higher than they are now, in 25 years' time? Apparently I can borrow £200,000 from somewhere and then put it on the stock market, and receive 7% interest every year, forever.

markin

So what is your profit after tax, are you interest only or paying it down? If you sold today vs 3 years ago what is the gain after tax?

theoldmiser

I OWN the property outright, and have done for about ten years...

Still no input from all the naysayers who came to this thread and claimed that it wasn't as easy as I said it was, without actually giving any reasons WHY - but that's par for the course here. All the people I rebutted haven't bothered to come back and respond, and tell me WHY I was wrong...

I still own my house, it's never going to lose value, unless half the population dies from some 'deadly virus' (LOL), but please think of those poor, hard working landlords, who are just so exhausted every day after doing nothing at all, 99.999% of the time, for their free money...

RHemmings

GDB2222 said:

Owning property to let out has been very lucrative in the past, as the financing costs have been low in relation to the combined return from rent and house price growth. There are other costs apart from finance, and it can be time-consuming, but there's no denying that people have made money out of it. I have no idea why any of this is being argued about?  

How things will work out in future is anyone's guess.

Interesting. Interest rates starting moving in a very very different direction after this post was made in 2020. 

Grumpy_chap

theoldmiser said:

I kept seeing landlords on here (and elsewhere) moaning about how hard it was being a landlord, and how difficult it is to 'make a profit' (when it obviously isn't, because somebody else is buying you an ENTIRE HOUSE), and so on.

So, as you've seen, it can work well.

The comments about the challenges of being a LL are mostly made to those asking "should I become a LL?"  It is easy for the person in that position to see the plus side (easy money as you put it) without seeing the potential challenges and pitfalls.

We also see threads (from LL and from Tenants) where the LL is clearly overstretched so, when the £400 is required to fix the washing machine, the LL simply does not have the £400.  That then creates a downward spiral.

You have had a few years of good experience and hopefully setting money aside now.  Most tenants are good, but it is the bad apple that can cost disproportionately in terms of time, financial and emotional impact.  Money from the good tenant needs to be set aside for the time when the bad tenant lands.

As a LL myself, there are many elements we can influence to make life easier on ourselves and for the Tenants.  There is also an element of good fortune.  In my specific case, my wife is currently not working and my work has bought in minimal income since August (because of own Ltd Co contracts) and our rental income is a small part of the overall requirement.  If the BTL had required a large outlay in that time, we would have prioritised that, but the personal pain would be uncomfortable.  So that is our luck, if you like, that nothing fell while other incomes were also low.

Martico

theoldmiser said:

I OWN the property outright, and have done for about ten years...

This little nugget shifts the dial a bit, doesn't it?