Renting - why do tenants get ripped off?

moneysavinmonkey

we live in a capitalist economy OP.
People charge what others are willing to pay.

pinkshoes

shawtj2 wrote: »

Yes maybe I am being a bit naive. I am just too honest. Ok so if the tenants pay their own gas and electric, but isn't it fair to only expect them to pay the actual mortgage cost each month?? If anything goes wrong with the house - you are the owner of the house say (slates fell off the roof) that is not the tenants responsibility as they are not the house owner. I would feel cheeky charging them more of things they did not cause!


Eg I have a mortgage of £46,000 and pay £350 a month. that is what I would charge them because even if say the boiler goes faulty ? (I would pay that myself out of my own budget while living in and owning the house). I certainly would not expect them to pay for it (so why increase the rent to cover that?)

You're obviously not a business woman with a business brain :rolleyes:

Renting properties out is a business, and a business is about making money. If the money wasn't tied up in property, it would be making interest in a bank, or invested in stocks & shares etc... it's what happens when you have to earn a living to make it in this big scary world.

Money may not equal happiness, but it does buy you nice stuff!

Rent it out at the market rate then buy yourself a new car!

mlz1413

OP you are also considering your tenants are lovely people who would never do anything wrong and would repair any damage they did themselves.

No matter how thoroughly you vet people you will never know how they live until you get your house back from being rented. Some tenants are lovely and leave the property the way they got it, I know I washed walls, skirtings hoovered everything and cleaned the bath to me all normal things.

But sadly not everyone is like that, some just move their stuff out damaging walls and floors as they go, they leave the oven covered in fat and hair blocking the plug holes to name the printable stuff.

By renting to just cover your bills you have no safety net, if the property isn't rented out you have no safety net. And you have all your bills to pay on where ever you are living.

Its a lovely idea to rent out for a minimum, but sadly not ideal.

Gingernutmeg

I can (kind of) see where the OP is coming from, not that I agree with it entirely lol. While I understand that renting out a house is a business, and as such those able to do so should be allowed to make a fair profit, there is something just a little 'uncomfortable' about something so fundamental as housing becoming such 'big' business. However you view it, renting a house isn't that same as renting a car ... *most* people could reasonably be expected to manage without a car, but *most* people can't reasonably manage without a home, it's a different thing entirely.

However, LLs just fill a gap, and aren't the cause of the problems, and of course need to make enough money to cover both a profit and the maintenance of their property. But ... there are some countries that have rent capping (and indeed we used to (still do?) have some form of rent control here), so what the OP is suggesting isn't totally crazy ... Wouldn't be popular though lol

Butterfliesarepretty

Gingernutmeg wrote: »

I can (kind of) see where the OP is coming from, not that I agree with it entirely lol. While I understand that renting out a house is a business, and as such those able to do so should be allowed to make a fair profit, there is something just a little 'uncomfortable' about something so fundamental as housing becoming such 'big' business. However you view it, renting a house isn't that same as renting a car ... *most* people could reasonably be expected to manage without a car, but *most* people can't reasonably manage without a home, it's a different thing entirely.

However, LLs just fill a gap, and aren't the cause of the problems, and of course need to make enough money to cover both a profit and the maintenance of their property. But ... there are some countries that have rent capping (and indeed we used to (still do?) have some form of rent control here), so what the OP is suggesting isn't totally crazy ... Wouldn't be popular though lol

Thanks gingernutmeg, I can be too nice a person (my boyfriend and family say). I have moved a few times and know about selling houses and what is fair, but I know nothing about renting and I would hate to rip anyone off. I am not greedy at all and I do not think about profit. My job is as a clerical assistant for an outsourcing company and soon I will be getting 22 years of vol redundancy. When this happens I intend to re-do my house, new plaster ceilings etc and a re-wire (that I could not afford before) so its ready in case I want to sell in a few years. I have lived in two 3 bed semis and a large 4 bed detached all before i got divorced!

Oh and i do live in a realistic world, sometimes its just nice to be fair to tenants and buyers.

I was only asking how it works not how it should be. It was just my opinion, and it does not have to be taken seriously.

Thanks everyone

Gorgeous_George

It's ok to 'not think about profit' but you would need to charge more than the mortgage interest just to break even.

So, for a £100K house, £600 per month would cover the interest only at 7.2% (100% mortgage). No profit = no tax.

Add in repair costs, redecorating costs, insurances etc., and not forgetting RISK. There is a risk that the property will be empty for some periods of time or that tenants will not pay. There's a risk that tenants will maliciously damage the property.

Running the business as the OP suggests would see all LL's bankrupt unless they could afford to subsidise their tenants forever. That said, I reward good tenants with extra improvements, lower rent and a nice (cash) pressie at Christmas.

GG

spinks

shawtj2 wrote: »

I have never rented a house but if I did leave my two bed terraced (double glazing, furniture, central heating, electric and gas) I would just charge for the mortgage eg mine is £350 a month then add my gas and electric which is £46 a month.
Just don't get it - or am I missing something. I prefer to be honest and not overcharge people.

OP consider this.

You leave your two bed terraced.

You advertise it for £350 per month plus gas and electric.

Joe Bloggs down the road is paying a mortgage on their house of £600 per month but know that they can rent that out for £1000 per month.

What is to stop them renting your house therefore lowering their outgoings considerably and getting a tenant to move into their house to pay the going rate which will cover their own mortgage aswell as the rent on your house.

Do you fancy getting ripped off like that? If so, let us know when you are moving out.

Butterfliesarepretty

spinks wrote: »

OP consider this.

You leave your two bed terraced.

You advertise it for £350 per month plus gas and electric.

Joe Bloggs down the road is paying a mortgage on their house of £600 per month but know that they can rent that out for £1000 per month.

What is to stop them renting your house therefore lowering their outgoings considerably and getting a tenant to move into their house to pay the going rate which will cover their own mortgage aswell as the rent on your house.

Do you fancy getting ripped off like that? If so, let us know when you are moving out.

Less sarcasm please, like I said I admit I know nothing about renting.:rotfl:
I don't intend to rent just wanted to know how it worked.

Thanks all for the advice.