Buy to let

monaymadlol

Are BTL as of 2022 still a viable investment option, considered best performing Vs say a stocks and shares passive investment option, with a say 20 year forecast?

theartfullodger

Ask me in 20 year's time and we'll tell you.  Until then , whatever anyone says, it's a guess   Anyone!

Certainly in my experience it's not as profitable as it used to be.   

Only go into b2l if you have both the financial and emotional reserves to cope with the tenant from hell (or agent from,...), Voids, unexpected huge repair bills, 'phone call Saturday 10:30pm about toilet leaking through ceiling onto sofa and carpet in lounge, angry tenants visiting you at your home (they have the right to your actual address) further burdens of legislation or taxation etc etc etc.  Oh and interest rate rises.  I had a for then large mortgage when BoE interest rates hit 17% under Thatcher, November 1979, my building society was kind and only charging me 15%. Painful.

Happy days!

dimbo61

No one knows the answer to this question.
You might invest in the best company Scottish Mortgages have done very well in Tech stocks.
You might buy the Right BTL property in the right location at the right time with the right mortgage and ltv.
You might have a brilliant tenant for the next 20 years.
United might win the premier League this year

theartfullodger

Investing in things or companies that have done well in the past, using history as your guide, is just as prudent as driving a car only looking out the back window.

monaymadlol

Thanks!

I think it was viable 5-10 years ago at the latest, but since more regulations etc, harder entryway to market have made things difficult and you should only do it as the last option in portfolio.

SS ISA wrappers in global passive stocks and shares drip fed over 20 years, tax free, can/is more lucrative and stress free. Anymore arguments for/against especially given the current climate, maybe we'll all be dead soon anyway!

MEM62

monaymadlol said:

Are BTL as of 2022 still a viable investment option, considered best performing Vs say a stocks and shares passive investment option, with a say 20 year forecast?

I can only speak from a personal point of view but I am selling.  I am an 'accidental' landlord as we kept my flat when my OH and I bought a house together almost six years ago.  I am selling for numerous reasons;

* It is not tax efficient by any means and, if you do it properly as I do, the returns on your investment are not stellar.  (And my place was mortgage-free!) 
* Being a landlord is a commitment and must be done properly.  As I live 45 miles away from the property and no longer have family ties to the area, managing things are a greater pain that I want.
* The current rules and regulations surrounding letting are not landlord friendly and I believe that they will become even more onerous in the future.
* The property is not increasing in value yet each years my CGT liability increases.  

Those are basically my personal reasons for selling - added to the fact that I will filter much of the equity from the sale into my pension over the next few years - which gives me an instant 25% uplift.  Most people still see BTL through rose-tinted glasses.  It is not the holy grail of investing.  Almost all that consider it under estimate the costs (fees, insurances, maintenance etc) and the risks (void periods, tenants not looking after the property and potential defaults on rent payments).  Consider the recent ruling during COVID where all evictions were banned.  Could you have dealt with that if you had a problem tenant in place at the time?

It may work for some but it is no longer for me.          

        

theartfullodger

Interesting.  Always find it odd that people "accidentally" sign tenancy agreement etc etc etc.

But hey, guess it could happen.

HotPantsCruiser

monaymadlol said:

Thanks!

I think it was viable 5-10 years ago at the latest, but since more regulations etc, harder entryway to market have made things difficult and you should only do it as the last option in portfolio.

SS ISA wrappers in global passive stocks and shares drip fed over 20 years, tax free, can/is more lucrative and stress free. Anymore arguments for/against especially given the current climate, maybe we'll all be dead soon anyway!

If interest rates get forced up by the current turmoil the HPI aspect that used to take the sting out of voids/repairs etc. won`t be there any more for new BTL buyers.

MEM62

theartfullodger said:

Interesting.  Always find it odd that people "accidentally" sign tenancy agreement etc etc etc.

But hey, guess it could happen.

A always find the phrase amusing too but that's how HMRC refer to my situation.   

seven-day-weekend

I have had a BTL since 2015 (intentional!).  

We will be selling up if our tenants, who are excellent, leave.  This is because of the onerous rules regarding letting, which are all in the tenant's favour, the fact that it takes about a year to evict any toxic tenant, even if they have paid you no rent and/or trashed the place.  This can occur even if you had good references for them, because a) they can fake them or b) a former landlord can give a glowing reference just to get rid of them.  There is also so much paperwork that has to be given at the beginning of the tenancy and if you don't do it right, you can't legally serve notice.  You also have to do the work of the home office by checking their 'right to rent' before the tenancy starts.

Financially it is not the big earner that many people believe it it be, especially if you have a mortgage (we haven't) or an older property that needs constant maintenance (our flat was built in 2014, so so far has needed minimal maintenance)..

Hope this helps.

london21

No one knows the future for certain.

Accidental landlord LOL

Depends on the amount you have to invest, your risk apetitie, are you ok with the responsibility of been a full time landlord etc.