Buy to Let - Does it work anymore?

Dis86

Dis86

Dis86

Caporegime
Joined
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Northern England
Just looking at investing some cash we have in a few b2l properties but unless I'm missing something I really cannot get the maths to math unless you buy outright.

Essentially if I buy without doing it via a company then my income tax rate wipes out any potential income on the properties vs mortgage costs and monthly expenditure (insurance, annual inspections etc.). Is Ltd Company the way to go to avoid this, and is it worth the detriments?
 
Dis86 said:
Just looking at investing some cash we have in a few b2l properties but unless I'm missing something I really cannot get the maths to math unless you buy outright.

Essentially if I buy without doing it via a company then my income tax rate wipes out any potential income on the properties vs mortgage costs and monthly expenditure (insurance, annual inspections etc.). Is Ltd Company the way to go to avoid this, and is it worth the detriments?
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It's very difficult to make it work now. Not worth it. Would rather just go global index fund and save the hassle.
 
I’d avoid it like the plague imo.
The odds are well and truly stacked against you in every possible way.
I’ve been ok as a LL, but the sooner I ditch it the better.
 
@EvilRob @JonRGV250 cheers gents. I'm seeing the same thing. To me this has been screwed in such a way as the only people that stand to make money are those already wealthy enough to buy multiples outright or...large businesses. Seems a rather poor way to solve property ownership issues and wealth inequality!
 
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Dis86 said:
@EvilRob @JonRGV250 cheers gents. I'm seeing the same thing. To me this has been screwed in such a way as the only people that stand to make money are those already wealthy enough to buy multiples outright or...large businesses. Seems a rather poor way to solve property ownership issues and wealth inequality!
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Yes it's almost like the legislation that makes it look like the government is trying to stand up for the little guy actually just benefits the rich further......
 
Not remotely. I am trying to gently nudge my partner towards selling her house at the moment because its always got issues to sort. Theres always costs. Shes paying an agency a monthly fee to manage it and they are quite crap and you never feel like they give a crap about getting you good prices on any work undertaken.

She pays higher rate tax on all the profits and last year the profits were something like £18,000 on a £550k house. So about 3% before tax. After tax the profits were about 1.6%. She has to do a self assessment tax return every year and probably spends about 20 hours a year on house related crap.

She owns the house outright or it really would be utterly pointless.

Shes done well enough out of the house because she bought it ~20 years ago so its appreciated in value a fair bit but outside of that its simply not worth it.

If she had put the deposit in the markets for the same amount of time she would have done miles better and wouldn't be getting hit for tax every year and the returns would be compounding.

I just don't think it makes any sense any more and when you consider the constant push to villainise landlords regardless of their quality its just such a risky business. All it takes is the wrong people and you can wipe out years of what little profit it makes.

Why are you considering this instead of investing that money?
 
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@fez looking at all options. We have 2 people who need properties and would likely be renters for life so it would have been easy to fill 2 of them. Very much thinking investment though.
 
Dis86 said:
@fez looking at all options. We have 2 people who need properties and would likely be renters for life so it would have been easy to fill 2 of them. Very much thinking investment though.
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The only way I'd ever be a landlord again is if I could guarantee quality tenants who wanted long term and I could ditch the agents.
 
Dis86 said:
@fez looking at all options. We have 2 people who need properties and would likely be renters for life so it would have been easy to fill 2 of them. Very much thinking investment though.
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Unless you can charge market rates, the houses are low maintenance and you don't need to get agents involved as well as knowing decent tradespeople to work on it or you can do it yourself I personally wouldn't touch it with a bargepole.

Personally I think the days of crazy house price inflation are done. We've reached the limit. Prices will increase but perhaps with inflation. Without that, I don't think it makes any sense to dump money into housing.

The people who did very well from renting properties did the BTL thing and took on massive debt with interest only mortgages and amassed an empire in the days where you would end up with an asset worth 2-3x what you "paid for it" and you just used the profit from rental income to stick deposits on more BTLs. I don't think there is much to be had for the hobby landlord any more.
 
adidan said:
The only way I'd ever be a landlord again is if I could guarantee quality tenants who wanted long term and I could ditch the agents.
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Yeah I wouldnt be using agents. Can do vast majority of jobs myself and have reliable contractors for the others. All it would take though is one roof replacement or even a boiler replacement and thats a hit thats going to take a long time to financially recover.
 
Dis86 said:
All it would take though is one roof replacement or even a boiler replacement and thats a hit thats going to take a long time to financially recover.
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That’s the worry, or tenants trashing the place.
There’s some pretty scary stories over in the landlord thread.
 
adidan said:
The only way I'd ever be a landlord again is if I could guarantee quality tenants who wanted long term and I could ditch the agents.
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That is actually possible, but you'd have to rent it to Serco, which I've heard quite a few are doing, but it does depend on how it would sit with you.
No way on gods green earth would I consider it, and for fairly obvious reasons.
 
I used to want a BTL but with the increase in taxes over the last few years and rule changes to favour tenants, I now have zero intention unless I can buy it outright.
I focus on overpaying my mortgage, paying AVCs on my pension, and investing.
 
JonRGV250 said:
That is actually possible, but you'd have to rent it to Serco, which I've heard quite a few are doing, but it does depend on how it would sit with you.
No way on gods green earth would I consider it, and for fairly obvious reasons.
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True, the best tenants I ever had were people who were working on relocation with a company. It was via an agent but obviously there was that extra security of the tenant's employer being involved.

Another option i'd only possibly consider is that in some areas the NHS need properties for workers to rent out so, again, there's another variable involved which means you're less likely to get dodgy tenants.
 
We rented for nine years between 2012 and 2021. The rent was never increased over that time. The landlady said that as we were good tenants and looked after her property, she lived in the south, we could rent it until she retired and sold up. We paid £750PM on a newish three bedroom town house.
 
I saw a breakdown, albeit on an instagram reel so not sure on accuracy, but it said that once all things were considered the landlord would be making under £1000 a year. I can't remebmer the exact figures but it wasn't worth it
 
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