Becoming a landlord - is it worth it?

caprikid1

Never become a landlord till you have purchased the house you want. You could tie up valuable money.

If you cannot find a house you want , is there any hope of you finding an investment property.

jbrassy

Short answer: no.

Longer answer: 
"A further shadow is the faith that many Brits put in property as their pension. Anyone who has read the Money section of a Sunday newspaper will be familiar with the question regularly posed to celebrity interviewees: Which is better, property or pension? In all but a tiny minority of cases, the answer comes back “property”. 

House prices have tended to rise over time, so it is not hard to understand why people say this. £100,000 worth of UK property 25 years ago would be worth an average of around £454,000 today. This obviously varies by region. In London it would be worth around £580,000 and in Scotland, £407,000. These figures exclude any costs of ownership such as maintenance, repairs, insurance or taxes; any income generated by the property (not relevant for primary residence, only buy-to-let); and the impact of leverage/mortgage finance. 

However, that same £100,000 invested in the global stock market (again, excluding any costs) would have grown even more, to around £631,000. This is almost 10% more than in even the best performing regional property market, London. Furthermore, it doesn’t matter whether you look at this over 5, 10, 15, 20, 25 or 30 year horizons. The stock market would always have resulted in a bigger increase in your £100,000 compared with UK residential property.

This also does not take into any account the substantial tax savings which can be earned by saving into a pension nor the substantial taxes and costs associated with buying and selling property."

Source: https://www.schroders.com/en-gb/uk/individual/insights/what-174-years-of-data-tell-us-about-house-price-affordability-in-the-uk/

horsewithnoname

All the landlords on here will tell you not to be a landlord. 

fluffymuffy

We thought long and hard about investing in property. Then bought shares in a commercial property fund. That was years ago. It was a good idea. 

ReadySteadyPop

fluffymuffy said:

We thought long and hard about investing in property. Then bought shares in a commercial property fund. That was years ago. It was a good idea. 

Did you sell out before commercial property tanked during Covid, or has it made a comeback?

Albermarle

ReadySteadyPop said:

fluffymuffy said:

We thought long and hard about investing in property. Then bought shares in a commercial property fund. That was years ago. It was a good idea. 

Did you sell out before commercial property tanked during Covid, or has it made a comeback?

I have an investment in a commercial property fund ( TR Property) It has always been pretty volatile and it did tank 50% due to Covid. By the end of 2021 it had pretty much recovered, but like many similar  investments struggled as interest rates went up. Still one third down compared to just before Covid. Although has paid out nearly 20 % in dividends over the 4 years.

user1977

Albermarle said:

ReadySteadyPop said:

fluffymuffy said:

We thought long and hard about investing in property. Then bought shares in a commercial property fund. That was years ago. It was a good idea. 

Did you sell out before commercial property tanked during Covid, or has it made a comeback?

I have an investment in a commercial property fund ( TR Property) It has always been pretty volatile and it did tank 50% due to Covid. By the end of 2021 it had pretty much recovered, but like many similar  investments struggled as interest rates went up. Still one third down compared to just before Covid. Although has paid out nearly 20 % in dividends over the 4 years.

Also depends on the mix of properties they've invested in - things like retail and office space have obviously suffered from Covid, but warehousing has shot up with retail shifting to online.

Elliott.T123

As others have said... No.

Mr.Generous

jbrassy said:

Short answer: no.

Longer answer: 
"A further shadow is the faith that many Brits put in property as their pension. Anyone who has read the Money section of a Sunday newspaper will be familiar with the question regularly posed to celebrity interviewees: Which is better, property or pension? In all but a tiny minority of cases, the answer comes back “property”. 

House prices have tended to rise over time, so it is not hard to understand why people say this. £100,000 worth of UK property 25 years ago would be worth an average of around £454,000 today. This obviously varies by region. In London it would be worth around £580,000 and in Scotland, £407,000. These figures exclude any costs of ownership such as maintenance, repairs, insurance or taxes; any income generated by the property (not relevant for primary residence, only buy-to-let); and the impact of leverage/mortgage finance. 

However, that same £100,000 invested in the global stock market (again, excluding any costs) would have grown even more, to around £631,000. This is almost 10% more than in even the best performing regional property market, London. Furthermore, it doesn’t matter whether you look at this over 5, 10, 15, 20, 25 or 30 year horizons. The stock market would always have resulted in a bigger increase in your £100,000 compared with UK residential property.

This also does not take into any account the substantial tax savings which can be earned by saving into a pension nor the substantial taxes and costs associated with buying and selling property."

Source: https://www.schroders.com/en-gb/uk/individual/insights/what-174-years-of-data-tell-us-about-house-price-affordability-in-the-uk/

At a rough guess the rents over 25 years on £100k invested would come to £360k*. Don't forget to include that.

A 50k house 25 years ago renting @ £400 pcm, reaching £800 pcm 25 yrs later. So ave rent £600.

£600 x 12 x 25 x 2 = £360,000

Vectis

All I can talk about is from the experience of being a LL with multiple properties, some let via an agent and others managed by ourselves.

Was it difficult? It really, really depends on the tenant(s) you get in. We had one tenant for about 5-6 years and he was fine. Left some damage on leaving but we wrote it off because he'd been a good tenant. We've had others who have been nightmares, missed rental payments, asking for lightbulbs to be changed etc.

We sold up and got out of it a few years ago. Would we get back into letting houses? No, not now. Things have gone far too much in favour of the tenant and I can only see that getting worse. I honestly think it's going to get more difficult for tenants in the coming years as I know of many LLs who are selling up and getting out. There's going to be a lot less properties on the market for tenants further down the line.