Help with timing for a possibly buy

caprikid1

canaldumidi said:

caprikid1 said:

Personally, I would not bother, the only people who will make Money will be the government in tax.

you are forgetting the letting agent.....

Agreed but the real winner with no risk is the government, they can easily take 50% of any left over cash.

[Deleted User]

No, don't risk it.

steampowered

Personally I would consider BTL only in the following circumstances:

• I was looking for a very long term investment (the up front costs make BTL not worthwhile if you only want to be tied in for a few years)
• I was not a higher or additional rate taxpayer (since BTL is unattractive if you pay higher rate income tax - unless you are one of those people that just doesn't declare your income and is willing to engage in tax fraud - thankfully HMRC are clamping down on that a bit more now)
• I had made the most of more tax efficient investment options including pensions and stocks & shares ISAs
• I had done the sums and the sort of property I want to buy works from a business point of view -  starting with the rent and taking off the tax, estate agent fees, VAT on the estate agent fees, a reserve for void periods, a reserve for maintenance/refurbishment costs and insurance costs (it sounds like you might want to insure against non-payment of rent)?

You are looking to do it for the long term - that's a big tick.

Do just think about whether topping up your pension could be a better option, depending on how your pension pot looks. 

london21

diystarter7 said:

We've done our research etc etc. If we do BTL, we'd use a long-established EA that had a good record, use their fully managed service with insurance for problem T's ie evictions, non-payment of rent etc. We have also decided only to rent to working professionals, no pets, smoking etc, etc.

We will be getting a bTL of no more than 40%.

Today I read about the queen's speech mentioning new rights for tenants and I thik it is the section 21 notice to evict without reason.
If the above does become law, am I guessing that if I wanted to sell or major works etc we could serve sect 21 on them? However, as
you know in life things change and we may decide to rerent, not refurb etc etc but our intentions at the time of the sect 21 would have been honarable.

We intend to by near a station, a nice quite area, a small place 2 bedrooms so suits a workig couple, or one with one child, no pets/smoking etc.
We've done calculations and allowance for repairs over 5 years and even with interest rates going up, poss property prices going down over twenty years we should be ahead and we are aware re awful T's not paying rent etc.


What do you think?

Btw, is there anything in the favour of LL around the corner where nasty T's not only don't pay rent but sublet, trash, destroy your property where is is BTL, or your home you rent out whilst you are away on work in another country/place etc?

Btw, having read some of the BTL, rental threads, it is our choice who we rent out to it is our money and nothing will change that.

Some ups and downs to consider.

Good to consider the pros and cons but a friend has said that he did extended vetting and went for professional tenants.

Also did landlord insurance.

So far with his 2 properties been going well.

Some have not been so lucky and with the eviction process favouring the tenant in most cases does not help. 

Thrugelmir

diystarter7 said:

TheJP said:

Cant comment on S21 question but have you thought that 'working professionals' are not always the best tenants? 

They are in the type of property we are considering buying.

People make great actors. Often not what they first appear to be. Your relationship will only ever be a business one. 

propertyhunter

@steampowered said it all.

There's better ways to make money rather than be a landlord. I did the calculation for my 400k 2-bed flat before I sold it, and actually, after all the tax I would have it pay, service charge and EA fees, it would be a minimal return. Who invests 400k to get 2%? You're essentially relying on capital appreciation, and that's not guaranteed. 

Long-term steady investments into pension pots and ISAs are the way to go. 

Markneath

propertyhunter said:

@steampowered said it all.

There's better ways to make money rather than be a landlord. I did the calculation for my 400k 2-bed flat before I sold it, and actually, after all the tax I would have it pay, service charge and EA fees, it would be a minimal return. Who invests 400k to get 2%? You're essentially relying on capital appreciation, and that's not guaranteed. 

Long-term steady investments into pension pots and ISAs are the way to go. 

It doesn’t really work unless you use leverage, 400k would typically be 10 houses 40k down,120 k mortgage each house. 10x800 per month rent. 

10x250 per month mortgages, so 8000-2500 leaves 5500 minus other costs. Yes I know 3% additional stamp duty etc but thats a recent thing. The money was there to be made but one house isn’t worth the hassle. 

To answer the OP though no I wouldn’t get into it today, the tax situation today and other changes its probably not going to be worth it. 

diystarter7

I'd just like to thank everyone for helping, trying to help here and all posts are appreciated.

HRH_MUngo

I have had four tenants in my flat.

The worst one was the 'professional' - a social worker.

She let about five other people live in the flat and in the few months she was there, caused damage.

Even the tenant who ended up going to prison kept the flat immaculate.

Nothing will protect you against bad tenants.

steve866

All the landlords they have had bad tenants / non-rent payers / evictions etc. must be kicking themselves for not renting to nice, professional tenants!