Buy-To-Let

Anyone got any thoughts on it? Or any experience with it

Oh, I’ve got plenty of thoughts on it!

I’ve never rented a property from a buy to let landlord, but I’ve been terribly unfortunate enough to live right next door to a house that was bought for let from new. Multiple occupants over almost 2 decades. Don’t ever want to be in that position again.

There’s a camp out there now that says buy to let landlords should be hit with triple council tax. Of course if that happened, they’d just up the rents to cover the costs. Either that, or they should be smashed with mega tax on their profits.

I could go on, but I’m winding myself up already :rofl:

Why, are you looking to buy a massive portfolio of properties to justify your Lord title?

What was bad about it?

Council tax is for the ones living there, while I agree a property tax is better (because it means empty properties cost money to landlords in tax), it’s not really what I’m asking

Don’t see why, there’s a lot of things that landlords have to do lmao

Yes, I am seeing what my options are for future investment.

Are you actually having a laugh? What do YOU think!

I don’t know, it’s why I’m asking. I don’t see anything inherently wrong with multiple people occupying a property over the course of 2 decades

You’re clearly naive. You want to try being a private homeowner living next to a rental property for almost 20 years. Whilst you might think it’s all hunky dory, I can assure you, it isn’t. I don’t think I need to go there any further.

I think your choice of wording is poor, I lived in a place for half of my life where the majority was council rented (including my own) as my parents made very little money. To this day, my parents are still renting from the council, albeit in a better area.

I, personally, am asking exactly what you encountered that was so terrible over two decades of living next to a rental property. We have always taken good care of the houses we lived in; aiming to make it like a home, but I will admit the culture of our household values (shaped by the fact that my father wasn’t born in Britain) our physical appearance (i.e. not showing that the household is not as wealthy as everyone else in the area).

Naivety is not the same as simply having different life experiences.

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I grew up in a Council house, so you don’t need to try and lecture me on that one. It was actually a great experience, but that was 40 years ago.

So yes, you’ve pushed my buttons dear man. So then the house next door to you goes from being occupied by one person or perhaps a couple. Then, a few weeks or months down the line, you discover there’s 10 or 11 people living in a 3 bedroom house because the rooms have been sub letted by the person renting it. The landlord seemingly has no clue. The local Council seemingly has no clue that they’re being royally ripped off because the supposed single renter is getting a reduction on their council tax when there’s 10 people actually living there. Then, one day, after numerous complaints to the Council, the eviction teams finally come around and clear the place. This is not a fantasy story.

I’m not saying all landlords are poor landlords, but some who use poor letting agents or those who try to do all of the lettings themselves, sometimes don’t give a crap about the people who live next to their properties. They almost certainly don’t care about the mental health and well being of those people either.

Ah, I see what you mean. This kind of thing shouldn’t happen, for sure; I haven’t actually considered that someone could do this but AFAIK that would put some level of liability on the landlord, as you require a HMO licence to let to multiple unrelated persons

While I probably can agree I don’t entirely care about the people who live next to properties I’ll purchase (it’s an investment, I have no particular stake in their feelings) I actually (if it hasn’t been obvious by now) do have a very strong hatred for those who disturb the majority, since people at my university accommodation come home so late disturbing me; I would make known my business line number to neighbours so I can deal with things in a timely fashion

I will take your advice and see about reputable lettings agents, since my town/city has a row of them in the centre. I don’t think I have the time, nor the patience to do the lettings/maintenance myself

Mine have done a solid 5% a year, but more in capital gains.

Being a landlord - or at least a good one… - is not everyone’s cup of tea and is sometimes a bit of an arse.

There are crap tenants, just like there are crap landlords. I’d say never put in more than you can walk away from. Overindebting yourself and trying to squeeze every penny out of it will end in tears. Build on a one-year cash buffer of maintenance and other costs - and treat any income after that in arrears.

Amateur landlords get into trouble with debt, basically. Then end up getting burnt. Treat it like a business and don’t get too emotionally involved, and it’s OK.

And so on and so forth…

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If the landlord lives 200 miles away, they don’t know what’s going on. I know a landlord who was quite rightly, prosecuted by the local council for allowing an unauthorised HMO despite the landlord claiming they knew nothing about what was going on. That just comes down to piss poor management on the landlord.

And then there’s the problem of intimidation. This can’t be underestimated. There’s some very disturbing people out there. Make a complaint and the the aftermath can be awful.

If you’ve got a clause in your contract, you’re fine.

They don’t need an HMO to put their friends up for six months!

Nothing scummier than people having their second mortgages paid off by the less well-off and still moaning how bad it is for them because money is tight. Oh woe is me

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It’s not just your mortgage, it’s tax as well… I mean, I’m getting taxed on rental income, so a solid chunk of it is going straight to the exchequer. It’s a very sick system.

Yeah, trouble is, how many friends? Clearly if there’s 10 or 12 people living in a house designed for a family of 3 or 4, then it’s never going to end well.

Add to that overflowing bins, 3 times the amount of cars normally associated with one address, people up all hours of the night and day. It just causes problems for the whole neighbourhood. Sorry if I sound a little bitter.

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All true, but it’s not illegal. Some UK cities have higher population density in areas now than in the 19th century…

You abolutely probably don’t want to do the job yourself. Get a proper decent letting agent that will carry out checks inside the property and who know what’s going on. Even if it costs a bit more money, it will be worth it in the long run.

Would you be able to give me a ballpark figure of how much you spend a year on maintaining your rental? Like, what kind of range can I expect?

Also, WRT amateur landlords getting into debt, do you mean overleveraging and then having multiple properties default at once/not building a large enough buffer?

You’re right. But I think that can be abstracted so they’re unaware of who’s reporting them, right? e.g. audio only recordings of loud noise etc at night

/shrug I was the less well-off and will use whatever profits I earn to invest in my hometown; to commit a few moral faux pas on the way is of no care to me. I will be forgiving so long as people act in good faith with me; I am not a loan-shark

Definitely the plan. Thinking about asking a friend of mine to halves with me to lower the risk too, can always buy him out later.

I mean, if you literally want ballpark, assume you get nothing back on the first six months to a year. Then take money off the top once you have an annual buffer. I mean, that sounds extreme, but it will ‘work’

I’d say this is the biggest risk starting out. Particularly now btl mortgages are ridiculously expensive and non-deductible. It’s quite a commitment to take out a second mortgage (or even first!)

On smaller properties, the sheer cost of the legal work may not be worth it… If you want to go on with other people, maybe also consider a Ltd and payout via dividends. Probably not the way to start though :joy: