Becoming a landlord - is it worth it?

can_darter

Hi

Would love to get people's opinions on whether becoming a landlord in this day and age is worth it?

Context: my partner were house owners and sold our house a couple of years ago. We found a place to rent as we couldn't find anywhere to buy at the time and are still renting.

Interest rates went up not long after we sold and the size of house we could afford went down - we've been sitting on a deposit for over 2 years (with that money devaluing everyday given inflation being much higher than interest rates) and now interest rates are a bit lower we're thinking about buying again - but we love our rental and don't want to move.

Do you think becoming a landlord with our deposit money is sensible given stamp duty rates etc?

Would welcome all views!

Albermarle

Have you looked into all the rules and regulations you have to understand and follow as a landlord?
The usual opinion is that the tax and regulatory regime for landlords is a lot tougher than it used to be, so it is a lot less attractive than it was in the BTL heyday.
If you have a few properties and are handy yourself at DIY etc. then you are spreading the risk and keeping costs down, but just having one property is pretty risky.

we've been sitting on a deposit for over 2 years (with that money devaluing everyday given inflation being much higher than interest rates)

Savings rates have been higher than inflation for about a year.
Currently inflation is around 2% and savings rates are 4 to 5%.

mebu60

Can you buy your rental? 

Bookworm105

why do you think that the risk of being a single property landlord is a better financial investment than other types of investment over and above cash ?

You may think that shares are "complex" and "risky" but as you have little understanding of the financial return from being a LL such a comparison would be poor.

FlorayG

Renting is always a risk. Your landlord may refuse to undertake repairs or may decide to sell up and give you notice to leave. What will you do then if all your money is bound up in your own rental? It could take months to remove your tenants so that you can live there yourself. I'm a landlord and I can't think of a single advantage of owning a tenanted property when you are renting yourself

ReadySteadyPop

can_darter said:

Hi

Would love to get people's opinions on whether becoming a landlord in this day and age is worth it?

Context: my partner were house owners and sold our house a couple of years ago. We found a place to rent as we couldn't find anywhere to buy at the time and are still renting.

Interest rates went up not long after we sold and the size of house we could afford went down - we've been sitting on a deposit for over 2 years (with that money devaluing everyday given inflation being much higher than interest rates) and now interest rates are a bit lower we're thinking about buying again - but we love our rental and don't want to move.

Do you think becoming a landlord with our deposit money is sensible given stamp duty rates etc?

Would welcome all views!

https://propertyindustryeye.com/budget-stamp-duty-hike-on-second-homes-deterring-property-investors/

Less people seem to think it is a good idea, I would avoid this route to be honest.

theartfullodger

Do you have the financial AND emotional reserves to cope with the tenant-from-hell (or agent-from..).  No rent for say 7 months, you still pay all expenses, mortgage, legal fees to TRY and evict, repair bills (oh yes, or if you don't do repairs judge will likely side with  tenant as you are harassing them. And tenant has right to know you actual address etc etc etc...

Done ANY training in being a landlord and/or landlord/tenant law??   If not, the consequence (ignorance) can be painful, expensive, drawn-out, complicated. When I started I thought I knew everything, didn't, it was 'orrible. 

Or is money in (several - I suggest 3) safer savings accounts better?? 

MEM62

can_darter said:

Would love to get people's opinions on whether becoming a landlord in this day and age is worth it?

Short answer - No.  

Mr.Generous

It can be worth it or nobody would do it, but in your circumstances I wouldn't. The current political climate is totally against landlords, and the economy is heading rapidly towards big problems. Landlords without debt and able to face a problem tenant or two can ride it out, otherwise it could be a disaster.

Stubod

Becoming a landlord - is it worth it?

..no....

SiliconChip

Your post suggests that the proceeds from your house sale would only be enough for a deposit on another property, so you'd need a mortgage for the balance. Many lenders will not offer buy to let mortgages unless you already own the property that you live in, so your choice would be limited and it's likely that rates might be higher than those available to other buyers. It's also likely that your deposit will need to be at least 25% of the value of the property.