Getting into buy to let property business

[Amp34]

I really do not understand your post. On one hand you say that the majority have only basic business acumen and knowledge, yet on the other you suggest that they achieve their goal to let their property whilst spending as little as possible.

Surely you cannot expect a landlord to spend more than is necessary, you realise they are in it to make their living, right?

No, the point I'm trying to make is there is a difference between the professional landlord that does things right and a lot of amateur buy to letters who are in it for the "get rich quick" attitude you see on so many of the TV programmes they try to emulate.

The professional landlords are usually in it for the long term, use professionals to look after their houses and (are more likely to) provide a good product for someone renting. The amateur landlord buys an run down house, sticks some white paint on the walls themselves and maybe purchases the cheapest kitchen they can from B&Q then tries to let it out for as much as possible.

I expect a rented house to be up to the standard of a normal house, not something with drafty single glazing, 30 year old bathrooms and mould on the walls (yes I have been to some with mould on the walls!). People wonder why nobody wants to rent in this country, the above is exactly why!

 

[Collider]

I think you do have a point and people do have a right to expect rentals to be up to standard in terms of being a proper home and they are paying for it.

That said (and probably controversially in the context of not opening up our rentals to communal ownership / giving them away as per some of the other remarks in this thread lol) we avoid the market that is likely to cause us issues (benefits, students etc) and so it makes sense for us to go for a higher spec and maintain it. We have a property that was (before we were given it) let to students for a while and while not disrespecting the students on this forum (and I was one too) you have never seen anything like it. It had no stairs (open plan stair case thing) when it passed to me as the students had been evicted and saw fit to remove them! Never seen anything like it. The basement was also flooded out. It cost a lot of money to put right, though given we own it outright it pays us back a reasonable sum. When the builders were working on it a guy who rents properties out near here suggested we should break it up and rent the basement as a bedsit..but its a house and I think breaking properties into that sort of group can mean a general downgrading of property in the area (its not like we are in London where space is a premium this is practically the middle of nowhere albeit it has a University in it).

I think anyone who rents out a house knowing it has a mould problem is an excellent reason there should be licensing..you can be causing long term health issues doing that and I am not sure how people live with themselves.

 

[Jez]

To be fair you are really referring more to the personalities of the landlords, this is in no way specific to the letting segment, you just need to take a look in some of these "post your desk" type threads on here to see the conditions of a lot of peoples' houses (a lot of which are probably owner occupied).

We (for example) have a mix, some better than others, and all are priced for the local area, condition, and comparables on the market at the time. Most landlords will be the same, and all will share the common view that you do not replace unnecessarily when you can make do and mend. It does sound as though you have had a particularly rough time finding somewhere, though

 

[Amp34]

To be fair you are really referring more to the personalities of the landlords, this is in no way specific to the letting segment, you just need to take a look in some of these "post your desk" type threads on here to see the conditions of a lot of peoples' houses (a lot of which are probably owner occupied).

We (for example) have a mix, some better than others, and all are priced for the local area, condition, and comparables on the market at the time. Most landlords will be the same, and all will share the common view that you do not replace unnecessarily when you can make do and mend. It does sound as though you have had a particularly rough time finding somewhere, though

That's the London rental market for you...! (or at least what I have seen so far.)

 

[salami1212]

some good advice here, thank you..

I do not agree that there is anything wrong with buying to let. People have a need, we can provide it.

 

[Andrew_McP]

The problem is that BTL is subsidised by the tax system. Buying as an owner occupier is not. It is a totally corrupt system, only perpetuated because so many MPs have vested interests in this area.

I have no problem with people buying to rent, but there should be no tax deductions applicable to level the playing field.

 

[MBennett]

All you need to know

http://www.housepricecrash.co.uk/

I'm addicted to that site!! Lots of like minded individuals

 

[MADMAN]

thx excellent link bookmarked

 

[PMKeates]

Do you live in London? If so you'd know that would probably be about £4k a week!

Nope, somewhere on the outskirts of zone1/2 (north of the river) that isn't a dive. I did also say just under

I do, in Wapping, and that seems expensive to me. I pay a fair bit less than £1000 pcm for a pretty nice place in a pleasant location. The view from the lounge every day:

 

[Xordium]

Buy to let property owners are economic parasites.

Completely agree. They keep prices artificially high and are not subject to proper governmental regulation.

 

[Squink]

A home is one of the core requirements for an person to live, not something which should be used & abused by people with a higher disposable income to earn a few extra bucks at the expense of others.

I have no problem with people being buy to let landlords out of circumstance - as life isn't something which can be planned so easily - but those who deliberately start buying up homes are parasites - bleeding the disposable income of the population & damaging our economy.

I fully agree. There should be rental properties available but people shouldn't be encouraged to aggressively pursue large portfolios. Part of the trouble is the glut of programmes (particularly Homes Under The Hammer) introducing the idea to anyone with a few grand in the bank looking for easy money. I recall one particularly noxious statement where the bloke said something along the lines of "the market isn't doing too well now but let's hope it picks up soon so that prices rise the way we all like them too".

All the landlords thinking themselves astute businessmen, you probably aren't. You simply have the ability to stitch up people who don't have the same financial support from the bank as you do. Every time you buy a house, there's a reasonable chance that you're taking it from someone who's saved up years for it and would live in it for many years. All to line your own pockets and drive them into cheaper housing. Keep telling yourself you're a 'businessman' and 'providing a service to people who need it', but really you're not. At least be honest and admit your income is a result of other people's financial loss.

BTW I'm a home owner and have suffered no particular financial loss from buy to letters, but I find the whole property market in the UK to be in a fairly disgusting greed-driven state.

 

[Amp34]

I do, in Wapping, and that seems expensive to me. I pay a fair bit less than £1000 pcm for a pretty nice place in a pleasant location. The view from the lounge every day:

I assume you share a house? I'm looking at around £700-800 a month which is about the minimum at the moment looking at various websites and that's not for a river/water view. Even in Wapping it seems to be very hit and miss at that amount, some nice stuff, some dumps with tiny rooms.

EDIT: That's where one of my main gripes is, those house share houses that are "managed" by Agents/Landlords are normally in a fairly poor state and have turned every possible room into a bedroom to make as much profit as possible. Basically they are preying on the desperate, knowing that people will grab it as they need somewhere to live and the rental market is so quick.

 

[estebanrey]

Do you think people could still always afford a mortgage and could buy a home outright if there were no rental properties?

I don't myself.

Then you are basically saying the laws behind supply and demand aren't true.

 

[PMKeates]

I assume you share a house? I'm looking at around £700-800 a month which is about the minimum at the moment looking at various websites and that's not for a river/water view. Even in Wapping it seems to be very hit and miss at that amount, some nice stuff, some dumps with tiny rooms.

That's right, share a house with two close friends - but it has three bedrooms, two reception rooms, study/fourth bedroom, utility room, three balconies with great views, two bathrooms/three WCs, large kitchen, dining room, garage, driveway, private road etc. etc, and for that we pay £2600 pcm! It's a straight, normal rental. It was up for £3445 pcm, so that gives you an idea of what room you have to negotiate.

I guess when you said "£1000 pcm for a room" I imagined just a tiny unfurnished room with flickering lights

 

[estebanrey]

Good job you aren't into astronomy then, the light pollution there looks awful.

 

[PMKeates]

Good job you aren't into astronomy then, the light pollution there looks awful.

It's the worst when the lasers hit you in the eyes. I'm on my third set!

 

[edscdk]

Then you are basically saying the laws behind supply and demand aren't true.

if houses were cheap and it was illegal to let a property there would be people that would be forced to live in the street, and others would buy several for convienence.

 

[Greebo]

I think that ship has sailed my friend.

I hate to say this but for once I agree with Kwerk

Reasons are:

1. Falling house prices - You have to factor in that in buying your BTL property it is going to fall. In fact at the moment, I saw some figures the other day that shows houses are currently selling for 30% less than their advertised price at.

2. BTL mortgages - with the banking crisis etc it is much harder to get a BTL mortgage and a lot of financial institutitons have raised rates and criteria. You could perhaps in the past get away with a 25% deposit. Now 40% isn;t unheard of and I know a few lenders who base the deposit on the rental return. Eg YB require a 150% rental to mortgage ratio which means say you want to buy a £150,000 house and the mortgage would be circa £1000 at 95% and you got £600 a month rent, they would not lend you 95%, £142,500 or evn 60%, £90,000 as the max mortgage repayment would need to be only £400 a month so in effect they would only lend 40% of the house.

3. Low rental rates - Not sure for other parts of the country, but until house prices plummet, a BTL property in our area would not give you a decent return. A £200,000 property only gets you a rental of £600 a month. Interest alone on average will be £500 a month. Knock off other costs like initial legal fees, stamp duty, landlord insurance and maintenance and you might if you are lucky have £20 a month towards the capital cost of the property. You would be better off sticking the deposit in a bank.

 

[estebanrey]

if houses were cheap and it was illegal to let a property there would be people that would be forced to live in the street, and others would buy several for convienence.

How do you work that out? The monthly cost of renting nowadays isn't too far off what a mortgage costs, most people renting could easily afford mortgage repayments (especially if they were cheaper like in the fantasy scenario) but they just can't get the deposit so they are forced to rent.

If renting was much cheaper than buying I would see your point but it's not.

 

[edscdk]

How do you work that out? The monthly cost of renting nowadays isn't too far off what a mortgage costs, most people renting could easily afford mortgage repayments .

that does not mean they would be offered a mortgage, and what about the deposit how many peopel ahve 30 to 50k in the bank..

also not everyone wants to be saddled with a 25year commitment...