Buy-to-let at distance

sixpence.

Hello

I have paid my mortgage and am thinking about investing in property. I live in London and would like to do buy-to-let in a different part of the country. 

I understand that I'd have to build a good relationship with a letting agent and also contractor for the initial refurb. Beyond that, is this a bad idea? 

One bad scenario that I can think of is that the tenants need to be taken to court because they refuse to pay. Is this something the letting agent could do?

Thank you!

Mr.Generous

Rare for court, in 10 years starting with 1 and now 5 properties never had to do it, but yes agent can do it. Minor repairs would be a pain, I'd also find a handyman. Tenant finder - you can get the agent to do it, but think about it. You invest £££ then let someone else pick who lives there.

Agent finds perfect tenant for them, who wants to stay 12 months. Then you pay agent again.

Short stay don't take as much care.

I find tenant who stays 2-3 years. More money for us, less for the agent.

Every tenant change costs approx a months rent MINIMUM plus a load of hassle.

During voids you pay gas, electric, water and council tax. Doesn't cost much but you switch bills from old tenant, to you, to new tenant. Long term is best, trust me.

propertyrental

No. Letting agents cannot take tenants to court. The owner /landlord can, or a solicitor can (or eg a family member with POA can).

Beyond that, your post suggests you have a large learning curve. Start by reading

https://forums.moneysavingexpert.com/discussion/5180214/tenancies-in-eng-wales-guides-for-landlords-and-tenants/p1

sixpence.

Thank you for these two responses.

@propertyrental Are there any other materials or resources you'd suggest? I've put together a B2L strategy myself based on my own research: mainly online blogs and watching many of Jamie York's YouTube videos. I don't really want to invest 3K in a course, that seems like a bit of a pyramid scheme.

What books / other materials would you recommend? 

Ideally I'd love a coach to mentor me through this but that kind of thing seems rare unless one is paying through the nose.

propertyrental

If you read the link I gave you, it contains multiple further links to websites, advice sites, leglislation, books and more.

Read them all!

Dazed_and_C0nfused

Will you be buying with a mortgage?

If so have you discovered the new(ish) rules which prevent you from claiming the finance costs as an expense?

There is a tax credit available which mitigates this to some degree but ultimately your taxable profit can be much more than you might otherwise expect.

Mr.Generous

Re the court stuff the owner has to sign papers but not be there in person. Owners may be overseas, elderly and housebound or both. The agent can do most things, but it would be a rare thing. I know a few landlords, and none have ever gone to court same as me.

If you get the chance talk to existing landlords. You don't have to do what they do, but hearing different ways of making it work will help. It's a slog at times, but far better for me than working for someone else. Everyone looks at the yield, and of course I do too. But over the long term the increase in value of the property also provides a great return.

Property has added about £500k to my net worth in 10 years.

propertyrental

Mr.Generous said:

Re the court stuff the owner has to sign papers but not be there in person. Owners may be overseas, elderly and housebound or both. The agent can do most things, but it would be a rare thing. I know a few landlords, and none have ever gone to court same as me.

I may be wrong, but I don't believe a non-lawyer eg letting agent, can represent a client (landlord) in court (unless perhaps granted POA).

tiger135

why anyone wants to do this nowadays is beyond me 

CKhalvashi

sixpence. said:

Thank you for these two responses.

@propertyrental Are there any other materials or resources you'd suggest? I've put together a B2L strategy myself based on my own research: mainly online blogs and watching many of Jamie York's YouTube videos. I don't really want to invest 3K in a course, that seems like a bit of a pyramid scheme.

What books / other materials would you recommend? 

Ideally I'd love a coach to mentor me through this but that kind of thing seems rare unless one is paying through the nose.

No you wouldn't.

I make my money through partnerships and getting on with running the business, anyone outside of government schemes is likely making more money from courses than what they're saying will make you money.

I volunteer in my community to help small businesses with marketing etc but would never charge to coach. If someone has a decent model, why would they want to spill the beans on the inner workings? I don't hide what I do, but keep quiet on how I do it.

With BTL, there's little more 'strategy' than finding a property at a decent price, renting it out and hoping that the many potential pitfalls don't come true. There are 4%-ish yields and potential 50% upsides on very safe investments at the moment (long dated UK government bonds) so property seems very unappealing.

_Penny_Dreadful

propertyrental said:

Mr.Generous said:

Re the court stuff the owner has to sign papers but not be there in person. Owners may be overseas, elderly and housebound or both. The agent can do most things, but it would be a rare thing. I know a few landlords, and none have ever gone to court same as me.

I may be wrong, but I don't believe a non-lawyer eg letting agent, can represent a client (landlord) in court (unless perhaps granted POA).

You're not wrong.  If the landlord cannot represent themselves then the landlord needs to engage the services of a barrister or solicitor.