Becoming a landlord - is it worth it?

km1500

the short answer - No

The longer, more balanced, fully thought out answer, taking everything into consideration is - No

london21

You have to follow all the right process and hope to have a decent tenant that pays without problems. 

Also tax implications, checking the numbers make sense. 

Ltd company vs own name etc. 

Spinybif

The argument over landlords selling up so less property available to rent is misguided. The property will not be left empty:either a new landlord will buy or a potential renter which reduces the number of people looking to rent. 

The people who do lose out are those on benefits / looking for cheap rentals or bad histories. Those higher up the rental scale gain as ex-rental properties tend to sell for less making them more affordable to buy. There will also be many houses which are too expensive to make EPC grade C coming on the market as landlords sell off before the 2030 deadline.

For a landlord who owns a grade C property outright the future looks good. Better still if  a register of bad tenants, safeguarded by an independent ombudsman, was established by a company such as Experian. The deterent effect alone of being on the register would significantly reduce the pressure on the Courts to evict problem tenants. 

dinosaur66

things against being a landlord

new stamp duty tax rises equals first years rent totally gone eaten up in stamp duty or even worse in scotland

section 24 taxed on non exsistent profits

and i think high buy to let intrest rates for next 5 years -SVR is 9% on a buy to let / where is the profit

capital gains risks of going up to 40% in next few years

EPC grade C £10k to make a grade D still a grade D

councils all over the country introducucing landlord registers for a fee where they actually do absolutely nothing

section 21 done away with

IMO current market is not for beginners .

300 propertys for sale town i live

6 propertys for rent

average bog standard bungalow 2 bed -cost £350k plus £17k stamp duty -rent would be £1300

average bog standard 3 bed 1960s semi cost 350k plus 17k stamp duty rent would be £1400-£1500

do an open weekend on both /assuming they are priced  correctly and you would have over 100 turn up at each desperate to take them.

£175k deposit and £175k buy to let at SVR which mortgage works nationwide have at 8.99% and  intrest payable per month £1350 approx plus section 24 tax on this as well

plus stamp duty wiped out first year rent

this is why there are no rentals bar a few accidental landlords renting in lots of towns now

can_darter

Thanks for all the replies! Some comments:

mebu60 said:

Can you buy your rental? 

It's something we need to try and explore with the landlord - but the broader land it sits on is family owned (and our landlord is part of the family) so it's probably a non-starter.

Bookworm105 said:

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 ?

We don't necessarily, we're considering a few options - one of which is becoming a landlord - hence why I'm in the forum!

FlorayG said:

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

This is useful. Thank you.theartfullodger said:

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?? 

This is good food for thought. I run my own business anyway and have enough stress with that 😂 - tbf I'd be prepared for it as much as I think anyone could...

SiliconChip said:

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.

Noted - thank you.

General consensus here seems to be "don't do it" - which is broadly good advice.

Thank you all!