The joy of being a landlord

[mrochester]

Fair enough so option 1 is to regulate rental markets so that pricing is reasonable and option 2 is have the government build and rent so much housing that private rentals arent required anymore and so the rental market below the top end collapses. I suppose either way works.

Correct. Make sure theres enough social housing for all those who need it and have a higher end private rental market for people who choose to want better than social housing will provide.

 

[Angst]

Correct. Make sure theres enough social housing for all those who need it and have a higher end private rental market for people who choose to want better than social housing will provide.

In reality though option one is decades quicker to implement and much cheaper for the government.

 

[mrochester]

In reality though option one is decades quicker to implement and much cheaper for the government.

We should be doing what’s better long term, not what is the quickest win.

 

[Angst]

We should be doing what’s better long term, not what is the quickest win.

I wholeheartedly agree. Implementing option 1 while working on option 2 is the best solution all round but i just dont see this government doing anythign at all.

 

[413x]

In reality though option one is decades quicker to implement and much cheaper for the government.

If you go too far you chase landlords away. Then you have rental shortage as landlords exit in droves.

 

[Raymond Lin]

We should be doing what’s better long term, not what is the quickest win.

Quickest win get you votes, if you get voted out of office then you won't have time to do long term projects. It's a catch 22 situation unfortunately. They would be reluctant to do things that don't see the results in their tenure.

 

[Angst]

If you go too far you chase landlords away. Then you have rental shortage as landlords exit in droves.

A lot of private landlords yes most likely but I can imagine large businesses such as banks would still find a viable busness proposition out of it and replace them.

 

[413x]

A lot of private landlords yes most likely but I can imagine large businesses such as banks would still find a viable busness proposition out of it and replace them.

Maybe, maybe not. Not sure on the details. But with epc, rates etc and all other stuff im hearing from actual landlords they are exiting or not adding any more.

(these are landlords with debts on the property, not cash buyers)

 

[Angst]

Thats the risk of the business i guess, if you cant afford to provide a property with a reasonable epc rating so that tenants dont freeze to death then its probably best you dont stay in the business. Al business is risk, no one is entitled to make a profit.

 

[413x]

Thats the risk of the business i guess, if you cant afford to provide a property with a reasonable epc rating so that tenants dont freeze to death then its probably best you dont stay in the business. Al business is risk, no one is entitled to make a profit.

I agree with epc stuff too.

But if you put too much pressure on you will create a shortage, and in a free market.. That means more £

Cap that profit. And you'll suffer even more with lack of supply.


As before.. With adequate social housing none of this would be an issue.

 

[bigmike20vt]

Social housing is crucial for the lowest earners but tighter regulations around how property rental works capping the amount that can be charged would help aswell. The market as it is is truly not fit for purpose for such an essential service. Every other key service such as energy is (supposedly)tightly regulated and so should housing.

rather than listing the essential services not working it would be easier to list the ones which are

rail? nope
busses? nope
postal service? ok maybe but its far more expensive than ever before.
water? sure if you like swimming in sewage otherwise no
energy? nope
NHS? nope
housing no
fibre broadband rollout - way behind schedule (personally it is ok for me but that does not mean its working as planned)

so even if i am being generous, that is 1 out of 8 services which are currently just about fit for purpose.

 

[413x]

rather than listing the essential services not working it would be easier to list the ones which are

rail? nope
busses? nope
postal service? ok maybe but its far more expensive than ever before.
water? sure if you like swimming in sewage
energy? nope
NHS? nope
housing no
fibre broadband rollout - way behind schedule (personally it is ok for me but that does not mean its working as planned)

so even if i am being generous, that is 1 out of 8 services which are currently just about fit for purpose.

Its an absolute state. And we put up with it. Longer it goes on the longer, harder and more expensive to fix.

 

[mrochester]

Thats the risk of the business i guess, if you cant afford to provide a property with a reasonable epc rating so that tenants dont freeze to death then its probably best you dont stay in the business. Al business is risk, no one is entitled to make a profit.

True, but if the cost of providing that property for rent is higher than the amount you are permitted to charge for it, you’ll very quickly go out of business through no fault of your own as the property owner. There HAS to be profit in private rental. You can’t expect private individuals to subsidise housing for the poor; that’s where government is supposed to step in.

I think making properties safer, more energy efficient and more comfortable are all the right things to do, but these measures all come at a cost that has to be paid by someone. It’s ultimately the tenant of the property that has to pay as the end of the supply chain.

 

[JonRGV250]

There HAS to be profit in private rental. You can’t expect private individuals to subsidise housing for the poor; that’s where government is supposed to step in.

Yes, exactly.
I’m really not sure why some seem to struggle getting their heads around it.

 

[Angst]

rather than listing the essential services not working it would be easier to list the ones which are

rail? nope
busses? nope
postal service? ok maybe but its far more expensive than ever before.
water? sure if you like swimming in sewage otherwise no
energy? nope
NHS? nope
housing no
fibre broadband rollout - way behind schedule (personally it is ok for me but that does not mean its working as planned)

so even if i am being generous, that is 1 out of 8 services which are currently just about fit for purpose.

You know what most of them have in common? They probably shouldnt have been privatised.

 

[Angst]

True, but if the cost of providing that property for rent is higher than the amount you are permitted to charge for it, you’ll very quickly go out of business through no fault of your own as the property owner. There HAS to be profit in private rental. You can’t expect private individuals to subsidise housing for the poor; that’s where government is supposed to step in.

I think making properties safer, more energy efficient and more comfortable are all the right things to do, but these measures all come at a cost that has to be paid by someone. It’s ultimately the tenant of the property that has to pay as the end of the supply chain.

Nowhere did i state that it shouldnt be profitable just that it should be regulated to be priced reasonably. Also why should the tenant pay the full cost for the maintenance of the landlords asset? Any improvements the landlord makes to benefit the tenants ultimately benefits the landlord by increasing the value of their asset. If property devalued over time in this country then this is a fairr argument but it doesnt, overtime the value of property increases and any money the landlord spends modernisign the property increases it further.

 

[mrochester]

Yes, exactly.
I’m really not sure why some seem to struggle getting their heads around it.

I don’t think they struggle with it, they just morally/ethically don’t believe property should be a profit centre for a private individual/business. Their stance would probably be; private owner occupier fine, social rental fine, private rental not fine.

 

[mrochester]

Nowhere did i state that it shouldnt be profitable just that it should be regulated to be priced reasonably. Also why should the tenant pay the full cost for the maintenance of the landlords asset? Any improvements the landlord makes to benefit the tenants ultimately benefits the landlord by increasing the value of their asset. If property devalued over time in this country then this is a fairr argument but it doesnt, overtime the value of property increases and any money the landlord spends modernisign the property increases it further.

Not necessarily true. I spent money (albeit small fry) improving my rental property and ended up selling it for less than I’d bought it for 15 years later.

You also can’t look at the value of the property in that way. If a landlord spends £3000 today upgrading the central heating system, it’s of no use right now to the landlord if that increases the property value sometime in the future; the landlord needs to recoup those costs today.

 

[JonRGV250]

I would quite like to know just how much profit some on here think we “hobby” landlords actually make after all expenses.

 

[mrochester]

I would quite like to know just how much profit some on here think we “hobby” landlords actually make after all expenses.

I think after factoring in all costs (which included a 2.1% mortgage) I basically broke even on a property I rented out for £500pcm. The benefit to me was someone else was paying off the capital for me, but I only realised that when I sold the property (and it basically made up for selling it for less than I bought it).