Is this a sensible idea? Letting my current house to buy another. Looking for input!

luvchocolate

My son bought the house next door to his...he was doing a large extension and knocked down the Garage and pinched some of the garden. 
It's been 2 years and it works really well 

He is an experienced landlord and has other properties let out. 

JimLad

luvchocolate said:

My son bought the house next door to his...he was doing a large extension and knocked down the Garage and pinched some of the garden. 
It's been 2 years and it works really well 

He is an experienced landlord and has other properties let out. 

Any issues arising from his tenants being Nextdoor?

SpiderLegs

JimLad said:

SpiderLegs said:

Crackpot alert. 

Care to elaborate? 

I could, but it would be immoral of me to do so.

luvchocolate

JimLad said:

luvchocolate said:

My son bought the house next door to his...he was doing a large extension and knocked down the Garage and pinched some of the garden. 
It's been 2 years and it works really well 

He is an experienced landlord and has other properties let out. 

Any issues arising from his tenants being Nextdoor?

None at all..says they are the best he has

ProDave

Well perhaps I can give the other side of the argument?

We are in a very similar position to what the OP is proposing, but with some differences.

We bought a plot of land and started a self build, nearly 6 years ago, and then put our old house on the market.  It did not sell in a slow market (along with loads of other houses in the area just not selling)  So we made the decision to let our old house.  Here we are now with the new house finished and living in it and the rental income has been a big part of contributing to the build.

Perhaps thought the one difference is we had previously been intentional  landlords so we knew what we were doing and we knew the obligations of being a landlord.

It can work, but you have to want to be a landlord and understand what that means.

[Deleted User]

luvchocolate said:

JimLad said:

luvchocolate said:

My son bought the house next door to his...he was doing a large extension and knocked down the Garage and pinched some of the garden. 
It's been 2 years and it works really well 

He is an experienced landlord and has other properties let out. 

Any issues arising from his tenants being Nextdoor?

None at all..says they are the best he has

It's just a matter of luck though, they could have been a nightmare.

luvchocolate

[Deleted User] said:

luvchocolate said:

JimLad said:

luvchocolate said:

My son bought the house next door to his...he was doing a large extension and knocked down the Garage and pinched some of the garden. 
It's been 2 years and it works really well 

He is an experienced landlord and has other properties let out. 

Any issues arising from his tenants being Nextdoor?

None at all..says they are the best he has

It's just a matter of luck though, they could have been a nightmare.

I was just putting the positive on it. 
Like the only family on housing benefits were the only tenants he got full rent during this pandemic. 

Bendy_House

JimLad said:

Our neighbour over the road who has a much nicer and larger house is moving away next year and we are thinking about renting out our house (owned outright currently) and use the BTL/LTB mortgage as a deposit on theirs.

The Pros are:

You end up with a larger and much nicer house.

You end up with 2 houses instead of one.

You end up with a second income and an appreciating asset (long term, if not medium).

Cons:

The considerable responsibilities of being a LL. You mitigate this by passing the task on to a reputable local agent.

You might have a nightmare tenant - in which case your agent evicts them. And does a better job of vetting next time...

You might have to cope with the intrinsic envy, suspicion and self-righteous faux-moral indignation of some folk. Oh, look, it's already happened on here. You mitigate this by (a) being an ethical and attentive LL, and (b) not giving a damn about trolls. (And it's up to you whether you declare to the tenants you are the owner of the property - mind you, chances are they'll soon find out... If they are clearly a nice family, they will by implication also be the type of neighbour you will want to know.)

If it were me, I think I'd do it.

Although warnings about what can go wrong with tenants need to be made, it is surely the case that the vast majority will be responsible and decent folk, just like home-owners.

AdrianC

Bendy_House said:

Cons:

The considerable responsibilities of being a LL. You mitigate this by passing the task on to a reputable local agent.

From their figures, the OP is not budgeting for paying for management, just for tenant-finding.

(And it's up to you whether you declare to the tenants you are the owner of the property - mind you, chances are they'll soon find out...

Apart from the legal requirement for them to have the name and address of their landlord...

Pixie5740

Bendy_House said:

JimLad said:

Our neighbour over the road who has a much nicer and larger house is moving away next year and we are thinking about renting out our house (owned outright currently) and use the BTL/LTB mortgage as a deposit on theirs.

The Pros are:

You end up with a larger and much nicer house.

You end up with 2 houses instead of one.

You end up with a second income and an appreciating asset (long term, if not medium).

Cons:

The considerable responsibilities of being a LL. You mitigate this by passing the task on to a reputable local agent.

You might have a nightmare tenant - in which case your agent evicts them. And does a better job of vetting next time...

You might have to cope with the intrinsic envy, suspicion and self-righteous faux-moral indignation of some folk. Oh, look, it's already happened on here. You mitigate this by (a) being an ethical and attentive LL, and (b) not giving a damn about trolls. (And it's up to you whether you declare you are the owner of the property - mind you, chances are they'll soon find out...)

If it were me, I think I'd do it.

Although warnings about what can go wrong with tenants need to be made, it is surely the case that the vast majority will be responsible and decent folk, just like home-owners.

Reputable agent.  Isn't that an oxymoron?  I'm sure there are some good letting agents out there but my experience has been that you need to manage them just as much, sometimes more, than you would the tenant so as a landlord you need to know the law and keep up to date with it.  Ultimately the buck stops with the landlord anyway so with the OP living so close he could manage it himself and save the fees.

Agents don't evict tenants because agents do not have the power to do so.  The OP would need to do the eviction himself or use a solicitor.

I see the OP has calculated tax based on 20% so maybe the OP is a basic rate tax payer and will continue to be a basic rate tax payer even with the rental income.  Once you get into paying higher tax rates BTL becomes less appealing unless you set up a limited company and then you're looking at having more than one BTL to make it worthwhile.