Is it a good time to be a landlord?

findingtaxtaxing · 8 January 2018 at 3:37PM

Hi

I have some money from an inheritance which I'm looking to invest (around £150k). I'd always thought that if I had the money I'd buy a small house and rent it out. I'm almost mortgage free in my own house. But a friend who is a landlord is looking to sell his house and has suggested now isn't a good time to be a landlord - I'd love to know what other people think.

I know that house prices can go up as well as down but I always thought bricks and mortar was a reasonably safe bet. Savings accounts don't offer much return and I'm not big on risk taking so thought I'd avoid stocks and shares.

Thanks for sharing your opinions with me. I have a child with additional needs who may not be able to work as an adult so this is for their future too.

Comms69 · 8 January 2018 at 3:39PM

It's fine as long as you do your research.

Will you be buying outright?

If so, you should have fewer problems.

findingtaxtaxing · 8 January 2018 at 3:41PM

Yes, I thought that buying within budget would be better than taking out a buy to let mortgage. I think my friend was suggesting he thought there would be a Labour government soon and that "Labour hate landlords" so would make it difficult to grow an investment.

Mossfarr · 8 January 2018 at 3:46PM

I am a landlord and my view is that it is not a good time to be a landlord.
The is very little profit to be made - particularly if you let through an agent. If you arrange the lettings and management yourself its a lot more work than you think - and a lot of legal requirements to comply with (and these are increasing all the time)!
And, worst of all, if you are unlucky and get a bad tenant who doesn't pay and damages your property it could end up costing you thousands.

findingtaxtaxing · 8 January 2018 at 4:00PM

Yes, I'd use an agent to fully manage things. I don't have the time or knowledge to do everything myself.

Comms69 · 8 January 2018 at 4:05PM

findingtaxtaxing wrote: »

Yes, I'd use an agent to fully manage things. I don't have the time or knowledge to do everything myself.

Find the time. Ultimately you would be liable for every aspect of the tenancy.

Slithery · 8 January 2018 at 4:18PM

Fully read the following post and all of the links it contains. This is the absolute minimum you should research before even thinking about becoming a landlord.

Also using an agent doesn't absolve you of any of the responsibilities, at the end of the day it's you that is liable for any mistakes.

http://forums.moneysavingexpert.com/showthread.php?t=5180214

findingtaxtaxing · 8 January 2018 at 4:51PM

Thanks for the link - I'll take a look...it's all starting to sound much more complicated than I thought.

Comms69 · 8 January 2018 at 4:53PM

findingtaxtaxing wrote: »

Thanks for the link - I'll take a look...it's all starting to sound much more complicated than I thought.

It may help to take a look at some of the posts on here, every week there's atleast one eviction post, one rent unpaid post and one deposit question (your top 3)

Dorian1958 · 8 January 2018 at 5:14PM

If you are not big on risk taking, then I would suggest this is not for you. There are risks all over with this idea; buying an unsuitable property, not understanding your market, assessing whether or not you have the skill set required to manage a property and an agent (who will need to be managed), being able to vet prospective tenants, managing it like a business, and having the mental and financial resources to cope when things don't always go to plan. When things are going ok, money can still be made, MrsDorian and I have 2 outright owned rentals making about 5%after costs but before tax. After another 7 years or so we plan to sell so there might be a bit of capital gain as well (also taxable). A lot for you to think about and not the path to easy riches that some folk think it is.Good luck.

FBaby · 8 January 2018 at 5:27PM

Yes, I'd use an agent to fully manage things. I don't have the time or knowledge to do everything myself.

Don't assume that this will mean they will take over all your responsibilities as a LL and that you will get good service for your money. My experience through 3 different agents was that they were more hard work managing then managing the tenants directly. They ripped us off each chance they got, and in the end, any matters resorted in them calling me asking me what to do, so didn't really see the point of paying them £100 a month for that luxury.

It's hard work being a landlord but considering the impact of doing things wrong, I much rather do it myself, save my money and take in on the chin if I do something wrong. Lots and lots of readings (and you'll see a lot of links here to what you need to know) will be much more valuable. Put the money you would pay an agency aside and you'll have a pot of money to deal with any urgency.

Do you maths before you do anything, you'd be amazed how much being a LL cost and most will only gain from it as a long term investment. In that case, you need to weigh whether it is worth the stress and aggro.

PLEASE READ BEFORE POSTING

Is it a good time to be a landlord?

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