Is there money to be made in renting?

[Deleted User]

Slithery said:

[Deleted User] said:

It's also immoral as someone else could buy your house and pay much less on a mortgage than they will pay you in rent. There is a shortage of housing to live in and letting property makes it worse.

What about the people that choose to rent? Not everyone wants to own their own property.

Of course there are some people in that situation. The fact is that right now there are a lot of people who want to buy, but can't. The number of rental properties needed to satisfy the number of people who want to rent is vastly smaller than the actual number available.

Buying to let right now is mostly just forcing people to rent, to subsidise your lifestyle at their expense. A home is one of the few things that isn't optional, everyone needs a roof over their heads.

andy444

Buy to let mortgages were a terrible facility to introduce to the housing market.

lookstraightahead

[Deleted User] said:

Norman_Castle said:

[Deleted User] said:

It's also immoral as someone else could buy your house and pay much less on a mortgage than they will pay you in rent. There is a shortage of housing to live in and letting property makes it worse.

That assumes "someone else" could finance the mortgage and it remains cheaper than rent. It also ignores ongoing maintenance costs.

How does letting properties reduce the number of available homes?

Do you know what the biggest reason people can't get a mortgage is? It's because they can't save a deposit due to paying 2x the monthly mortgage payment in rent.

So it's the size of the deposit that is the problem. Or income. It's hardly the landlords fault.

[Deleted User]

[Deleted User] said:

You can make money, but you take on a lot of responsibility owning someone else's home.

It's also immoral as someone else could buy your house and pay much less on a mortgage than they will pay you in rent. There is a shortage of housing to live in and letting property makes it worse.

You have a myopic view of the market. For starters the vast majority of students want to rent, not buy. I have rented 5 properties in my time, none of which were on cities where i had any desire to own. As a landlord myself now, i provide  quality let accommodation to 4 young professionals in 1 house. And no, i do not see it as better to sell it to potentially a single home owner. 

SpiderLegs

[Deleted User] said:

You can make money, but you take on a lot of responsibility owning someone else's home.

It's also immoral as someone else could buy your house and pay much less on a mortgage than they will pay you in rent. There is a shortage of housing to live in and letting property makes it worse.

It’s a strange one this, I’ve also been hearing a lot of people complaining about how immoral it is for people to buy their own home and sit on years of unearned wealth through rampant HPI.

I wonder what your view on that is. Perhaps there are nasty landlords and nasty unencumbered homeowners and nasty lenders requesting massive deposits and probably lots of other nasty people who have things too.


perhaps we should just ban all private ownership of property? 

lookstraightahead

SpiderLegs said:

[Deleted User] said:

You can make money, but you take on a lot of responsibility owning someone else's home.

It's also immoral as someone else could buy your house and pay much less on a mortgage than they will pay you in rent. There is a shortage of housing to live in and letting property makes it worse.

It’s a strange one this, I’ve also been hearing a lot of people complaining about how immoral it is for people to buy their own home and sit on years of unearned wealth through rampant HPI.

I wonder what your view on that is. Perhaps there are nasty landlords and nasty unencumbered homeowners and nasty lenders requesting massive deposits and probably lots of other nasty people who have things too.


perhaps we should just ban all private ownership of property? 

I agree with this.

If someone wants to take an ethical stance, then 'home' or 'land' ownership is not the way to do things. A tenant who buys becomes a landowner. 

I struggled to get back into house ownership following divorce etc and I'm amazed how much wealth people have accumulated just sitting on their properties.

rachel230

You need to research thoroughly and crunch your numbers.
Do you know for example that you can no longer offset mortgage payments against tax? Since this ruling came fully into force ( it was tapered), some landlords are actually operating at a loss (not taking into account potential growth in property value).
Will the rental income take you into the 40% tax bracket which it could well do if you are also working? If so then your tax liability will be high.

[Deleted User]

SpiderLegs said:

[Deleted User] said:

You can make money, but you take on a lot of responsibility owning someone else's home.

It's also immoral as someone else could buy your house and pay much less on a mortgage than they will pay you in rent. There is a shortage of housing to live in and letting property makes it worse.

It’s a strange one this, I’ve also been hearing a lot of people complaining about how immoral it is for people to buy their own home and sit on years of unearned wealth through rampant HPI.

I wonder what your view on that is. Perhaps there are nasty landlords and nasty unencumbered homeowners and nasty lenders requesting massive deposits and probably lots of other nasty people who have things too.


perhaps we should just ban all private ownership of property? 

That really is a strange one. Not sure where you got those ideas from, they seem very odd.

The issue is that housing is unaffordable for many who want it. Worse still pensions are poor and many people are relying on the value of their homes going up to fund their retirement.

There are many reasons for this. Buy to let is a big one, so is not building enough houses and building low quality houses. I already mentioned the pensions crisis. Many people were only able to get on the ladder because their parent or grandparents helped them, which just forced prices up even more and make it even harder for the next generation who couldn't rely on that assistance.

The reason lenders want deposits is to protect themselves from losses. If the buyer defaults on the mortgage they will need to sell the house at auction and the deposit helps offset the difference in what the house will sell for and what is owned. As house prices continue to rise the deposits needed get bigger and bigger. Increasing rent means it gets harder and harder to save up. We are now looking at the highest tax burden in peace time, high inflation and huge increases to energy bills too.

All I'm saying is that people should think twice about contributing to these problems, and about taking on the responsibility of owning someone else's home.

Ditzy_Mitzy

The short answer, for an individual landlord with a single property that is mortgaged, is 'no'.  That doesn't mean you shouldn't do it, but you'll have to treat the thing as a long term investment rather than income in the short term.  The rent ought to offset the mortgage, but that's about all it will do when costs, tax and so on are taken into account.  Look upon it as a cheap way to acquire an asset you couldn't otherwise afford and you won't go far wrong.  Don't expect to be clad in Dior and driving a Porsche because of it, however.  It shouldn't, at this scale, be a source of income to rely on.  Ensure that you can pay the mortgage without the rent income, too.  
I could go on about rights and responsibilities, but won't.  See the tenant right and don't charge too much; you won't lose sleep.  Ignore the snivelling Gradgrinds' harping about annual rent increases, charge about right for market or maybe just below and concentrate on providing a long term home for someone.  Loyalty is worth more than money in this game; a £50 monthly uplift come renewal time might net you an extra £600 p.a. (wow!), but might just lose you a good tenant.  Void periods pay nothing, don't forget.  

SpiderLegs

[Deleted User] said:

SpiderLegs said:

[Deleted User] said:

You can make money, but you take on a lot of responsibility owning someone else's home.

It's also immoral as someone else could buy your house and pay much less on a mortgage than they will pay you in rent. There is a shortage of housing to live in and letting property makes it worse.

It’s a strange one this, I’ve also been hearing a lot of people complaining about how immoral it is for people to buy their own home and sit on years of unearned wealth through rampant HPI.

I wonder what your view on that is. Perhaps there are nasty landlords and nasty unencumbered homeowners and nasty lenders requesting massive deposits and probably lots of other nasty people who have things too.


perhaps we should just ban all private ownership of property? 

That really is a strange one. Not sure where you got those ideas from, they seem very odd.

The issue is that housing is unaffordable for many who want it. Worse still pensions are poor and many people are relying on the value of their homes going up to fund their retirement.

There are many reasons for this. Buy to let is a big one, so is not building enough houses and building low quality houses. I already mentioned the pensions crisis. Many people were only able to get on the ladder because their parent or grandparents helped them, which just forced prices up even more and make it even harder for the next generation who couldn't rely on that assistance.

The reason lenders want deposits is to protect themselves from losses. If the buyer defaults on the mortgage they will need to sell the house at auction and the deposit helps offset the difference in what the house will sell for and what is owned. As house prices continue to rise the deposits needed get bigger and bigger. Increasing rent means it gets harder and harder to save up. We are now looking at the highest tax burden in peace time, high inflation and huge increases to energy bills too.

All I'm saying is that people should think twice about contributing to these problems, and about taking on the responsibility of owning someone else's home.

Well it sounds like the dystopian nightmare has finally arrived.

im not sure what your suggestion is for making this any better as you’ve omitted it.

Maybe the OP reads the recommendations and runs the numbers properly. Then if they decide to go ahead and put the considerable effort in that’s required to be a successful LL I hope they earn an absolute boat load of cash to spend on whatever the hell they want.