The joy of being a landlord

[Freakbro]

How is it not communist, its funded by the taxpayer,

Because there is a whole world of nuance between "If you're not fully a Capitalist then you're a Communist"

@Irish_Tom summed it up better than i could. Though not identical to yourself as you just seem to bypass the Socialist part and go straight to the extreme Communist moniker

The issue I have with people like JBP (and certain members of this forum) is when they cry "socialism" or "socialist" at people, groups, or policies that they don't like, and try to equate them with the very worst instances of Communism in practice. Yes, when taken too far, socialism (like most things) is terrible, you'll get no argument from me there. But someone like Bernie Sanders (or even Jeremy Corbyn) isn't advocating for Stalin-Leninism. Their ideas might share some roots (and there are plenty of grounds to criticize them honestly) but it's disingenuous to equate them to Pol Pot. The Communist Manifesto actually has a whole section on how Communism differs from other branches of Socialism — so while all Communists are Socialists, not all Socialists are Communists.

Greta Thunberg's recent anti-capitalist rant is a good case in point. She makes some valid points about Capitalism facilitating the exploitation of people and the environment over the last few hundred years, and I agree with her that economic growth shouldn't be our only priority. But she ignores the benefits that Capitalism has bestowed on the human race in that time. She also explicitly states that she isn't advocating for a return to "Socialism, Liberalism, Communism, Conservatism, Centrism, you name it", but that doesn't stop certain people from claiming she's a dyed-in-the-wool Marxist.

if every company was owned by the state, we would be in full communism,

Ok, great. Whats that got to do with our Country? Who is proposing that every company should be run by the state? Though after 30+ years of National Infrastructure being bled dry by Capitalists and all the profit leaving the country, there does seem to be a change in sentiment in the public that maybe it wasnt such a good idea.

your healthcare, or anyone elses, is none of my business, likewise, my healthcare, is none of your business.

Yep, you are a Libertarian even if you dont realise it.

What's wrong with Singapore?

Great if you're one of the few rich, not so good for the rest of the society.

I'm not anything, im just explaining things.

Well, you are of course 'something' and you just happen to be explaining things from a very Libertarian point of view

 

[Maple Leaf]

Now, I'm no expert on political ideologies, but what has this
got to do with this

"Devilman" originally said: 'Why should private individuals make profit on something so basically fundamental as a roof over one's head to call home, instead of the money going directly to local councils / government?'

Then "GaryThe Snail" replied: 'It would be cheaper to rent if the councils had them all. Personally I don't think we should have landlords. It's all about profit and squeezing the money out of renters.'

I was pointing out that in a capitalist country people or companies making a profit out of providing goods, services, rental property (accommodation, vehicles, tools etc) is acceptable. To say that NO privately owned accommodation can be legally rented to anyone and that all rented accommodation MUST be owned and operated by the State is what you would expect to see under a State Socialist system or a hybrid system.

Capitalism is an economic theory about the control of trade and industry by private individuals for profit. Paying taxes to support society is not an antithesis to Capitalism,

I wasn't claiming that paying taxes is antithetical to the Capitalist system. I was asking: why it is that so many people in this country think that they are entitled to have their chosen lifestyles subsidized by the tax-payer?

Yeah ripping off students is a dream.

5 or 6 to a property
Low expectations of quality
Rinse the deposit for damages every year. Quoting the same damage on the Inventory that they said they'd fix last year.l, but saying you did it yourself.
A desperate captive market.
You can rob them too once a year.
(Happened to me, actually key entry and all our sound systems stolen. Mine was just a all in 1 boombox affair. Others lost separate systems worth 100s.)
Scum land lords rinsing teenagers for everything and giving nothing but damp back.

5 or 6 is a licensed HMO now - they have to be inspected by the Council and there are numerous health and safety rules they must follow.

Low expectations of quality? If it's not acceptable don't rent it or negotiate a cheaper rent.

There has been a deposit protection system in this country since 2007. The landlord has to have a detailed inventory signed and dated at the beginning of the tenancy. If there is extra damage in the property then don't sign the inventory, or if the damage was concealed (so you signed it), then take photographs of it and send copies of them to the letting agent/landlord. If they try to keep part of your deposit for those pre-existing damages then raise a dispute with the Deposit Protection Service. If they cannot prove the damages were not there when you started your tenancy then they have to return your money. If they fail to protect your deposit with the DPS (as my last landlord did) then you are entitled to have your full deposit returned, compensation of up to 3 times the value of the deposit and they cannot use a Section 21 eviction notice against you.

Your landlord burgled your rented student house? I hope you called the Police and reported it.

Generalize much? I've known good and bad student landlords. There are good and bad people in all walks of life.

 

[dowie]

Again the point I'm making is that the supply of new housing isn't sufficient.

If landlords are currently selling slightly more homes than they're buying then the presence of landlords in the market clearly that doesn't negate my point re: lack of supply, does it?

Also some people do need to rent and lack of rental properties affects rent prices too. Again... an issue with supply.

I wonder if people are going to start grasping that there is a really obvious issue with supply here:

Renting: Shortfall of properties creates frenzied market, surveyors say

Agents say high numbers of tenants chasing a shortage of properties will continue to push up rents.

www.bbc.co.uk

Fierce competition among tenants chasing a limited number of homes to rent shows no sign of abating, surveyors say.
One agent said the rental market in his area was "frenzied" as tenants tried to secure the few available properties.
The Royal Institution of Chartered Surveyors (Rics) said a similar picture was seen across the UK.
It is likely to push up rents further, averaging at a 4% annual increase, adding to pressure from rising prices.

There seems to be almost a sort of naive view that if there were fewer landlords then that would fix things but they're a minority of homeowners and they are, as a group, selling of more properties than they buy now... that has minimal effect on the larger market for people who want to buy but it does squeeze rental tenants and with a growing population and fewer properties available to rent then guess what happens...

The real problem is the supply of housing in general, that's why it is expensive! The other naive view some people have is that if only prices would fall they'd magically be able to afford... this again ignores reality, if prices fall thanks to interest rates increasing then properties don't necessarily become any more affordable... there are still all the same people who really want to buy out there competing for the limited supply, it mostly just means that for the same monthly repayment you can now only borrow a smaller mortgage.

The problem is still supply; we're not building/approving sufficient new homes.

Now there could be restrictions on holiday lets too... this is a farcical self-inflicted situation, planning regs are the cause of this issue in the first place and now local authorities get to decide between harming their local tourism industry (and local jobs) vs harming their local housing market (and the ability of younger people to buy a home).

Holiday homes in England to need planning permission under new plans

Airbnb says it would welcome register for short-term lets in tourist hotspots but warns ‘balance must be struck’

www.theguardian.com

People who convert homes into short-term holiday lets would require planning permission in tourist hotspots in England under government plans.

The Department for Levelling Up, Housing and Communities has said it will consult on the change as well as whether to give owners the flexibility to let out their home for a maximum number of nights a year without the need for the permission.

The government said it would also hold a consultation on another proposal for a registration scheme for short-term holiday lets.

Lastly, the other farcical situation we have is the sticking plaster stuff that like stamp duty holidays, help with deposits etc.. none of that changes the fundamentals, giving incentives to first-time buyers just fuels demand which increases prices as there are still restrictions on supply, it just helps a subset of those wishing to buy at the expense of everyone else wishing to buy as the prices then increase further.

The solution is to build more, be more permissive with planning, build high-density stuff near railway stations... green belt immediately adjacent to railway stations is total BS and should be immediately granted planning permission for high-density housing like blocks of flats, town houses etc. People wanting to extend/improve existing homes should be allowed to with minimal fuss... back garden extensions, loft conversions are a total no-brainer and should be approved rapidly, it doesn't build a new home but it does add to the total sq ft of living space available, someone able to convert a 3 bed into a 4 bed no longer needs to move/leaves another 4 bed available for the rest of the market etc..

Similar applies to social housing or any NIMBY-style complaints about new developments being the wrong type, there is such a shortage of everything that it shouldn't matter if it's an over-50s-only community or if it's an apartment block with "not enough social housing".. it's all additional sq footage of floor space to add to the market and reduce demand elsewhere, it all helps right now regardless of the type of development.

/rant - tl;dr UK planning system and lack of development is total BS and has one of the biggest negative impacts on the quality of life/living costs of everyone living here

 

[gavoo]

The amount of return on investment you can get for renting out a property is insane considering the property appreciates in value also.

I've rented for about 10 years because no mortgage brokers will lend me enough but if I was rich I'd be a landlord for sure.

 

[bigmike20vt]

The amount of return on investment you can get for renting out a property is insane considering the property appreciates in value also.

I've rented for about 10 years because no mortgage brokers will lend me enough but if I was rich I'd be a landlord for sure.

I can't say I have seen such amazing profits on ours. we are still keeping it as our lad may live in it once he is older but once all the fees are paid keeping it well maintained, we make maybe £200 a Month.profit on it. it's not nothing but it's not all that.... tho that said we could charge more for it I guess but if we do I doubt our tenant could afford to stay (she works at my old place so won't be on a great salary) so we just let it tick over as we have had bad tenants before and don't want to spin the roulette wheel again and get some loser who refuses to pay and trashes the place (again)

 

[hurfdurf]

I can't say I have seen such amazing profits on ours. we are still keeping it as our lad may live in it once he is older but once all the fees are paid keeping it well maintained, we make maybe £200 a Month.profit on it. it's not nothing but it's not all that.... tho that said we could charge more for it I guess but if we do I doubt our tenant could afford to stay (she works at my old place so won't be on a great salary) so we just let it tick over as we have had bad tenants before and don't want to spin the roulette wheel again and get some loser who refuses to pay and trashes the place (again)

Does the £200 a month profit come on top of the mortgage being paid off, or is it already paid off?

 

[Quartz]

The amount of return on investment you can get for renting out a property is insane considering the property appreciates in value also.

Only if you chose the right location. My own property in Luton has not significantly appreciated once you account for inflation - I posted about it in another thread.

Oh yes, just got another £1000 bill...

 

[dowie]

Another illustration of how not tackling the supply issue but just throwing a bit of cash to fuel demand doesn't really help in the long run:

https://twitter.com/i/web/status/1646805082996916224

https://twitter.com/i/web/status/1646806035624067075

 

[Scam]

I can't say I have seen such amazing profits on ours. we are still keeping it as our lad may live in it once he is older but once all the fees are paid keeping it well maintained, we make maybe £200 a Month.profit on it. it's not nothing but it's not all that.... tho that said we could charge more for it I guess but if we do I doubt our tenant could afford to stay (she works at my old place so won't be on a great salary) so we just let it tick over as we have had bad tenants before and don't want to spin the roulette wheel again and get some loser who refuses to pay and trashes the place (again)

Crazy that BTL is (was) so good an investment in this country that landlords expect to make profit every month. Or rather, crazy that rent is so high in the country that landlords can charge enough to make a profit every month! Let alone the capital gains on the property itself. I'm not going to bother doing the maths but if you put down £50k on a £250k property and rented it out, in 25 years that property would be worth a heck of a lot more than the £100k you'd make if you'd have put that £50k investment into some sort of savings/investment at approx 3%. Add a monthly profit to that and as @gavoo says you can get insane returns. Maybe not so much now that property appreciation has slowed, but if you got into it in the late nineties like a lot of boomers you'd be laughing now.

 

[bigmike20vt]

you are using hindsight and the world does not work like that. yes looking back people back then made a whole bunch of cash.... but then you could say that about a lot of investments. (a mate of mine mined 6 bitcoins , another had shares in Tesla (dunno if he sold them before the recent drop)

I only speak for ourselves . I am not a career landlord and just renting out my wife's flat which she owned when I met her. it has appreciated in value but nothing like what properties did in the
90s through to now.

we lost money in the low to mis 1000s (at a guess 3.5k) with our 1st 2 Tenants. one trashed the place, ran off after not paying the rent for multiple months and left food in the fridge and on the table etc to rot. our next tenant flooded the shop below the flat and created a black mould problem by disconnecting all the storages heaters in the flat and blocked the air vents (and yet we got in strife over it).

LLs have to cover these kinds of people as well so the good ones unfortunately pay more. I do not understand how LLs from hell get away with it to be honest as we were taken to the cleaners by our bad tenants. (which is why I am happy to take less than market average for the area now we have a good one but that still does not make it right).

btw you say you find it hard to understand how landlords can expect to make a profit every month... really? welcome to the world of economics.
most businesses have loans to set up (some have very large ones). they expect to make a profit on top of just paying the loan off. if all that was what they could hope for then I doubt they would bother..... and banking on a £300k flat appreciating in value enough to clear maintanence costs and inflation and provide a living wage off is just daft imo.

I know some career landlords really don't like people such as ourselves in the game and would be happy for us to leave. reason being we are NOT looking to make profit on the property over and above covering the tax, maintanence and our mortgage (which is tiny)

this means it is very easy for us to undercut landlords looking to make a profit. private landlord businesses are not going to go anywhere ... if anything it is only people like us who will be forced out as it won't be worth the hassle of saving the property for our lad....
which will then mean the big landlord businesses will have less competition.

I may be wrong but my feeling is of people like us quit (my mate recently sold theirs as was not worth the agro) then rent will go up.

 

[StriderX]

Rent is going up anyway, better it happen faster and the whole system culminates than to keep trundling along as if nothing is wrong with the property situation in this country.

The quicker people get fed up the better.

 

[Mrwong]

I wonder if people are going to start grasping that there is a really obvious issue with supply here:

Renting: Shortfall of properties creates frenzied market, surveyors say

Agents say high numbers of tenants chasing a shortage of properties will continue to push up rents.

www.bbc.co.uk

There seems to be almost a sort of naive view that if there were fewer landlords then that would fix things but they're a minority of homeowners and they are, as a group, selling of more properties than they buy now... that has minimal effect on the larger market for people who want to buy but it does squeeze rental tenants and with a growing population and fewer properties available to rent then guess what happens...

The real problem is the supply of housing in general, that's why it is expensive! The other naive view some people have is that if only prices would fall they'd magically be able to afford... this again ignores reality, if prices fall thanks to interest rates increasing then properties don't necessarily become any more affordable... there are still all the same people who really want to buy out there competing for the limited supply, it mostly just means that for the same monthly repayment you can now only borrow a smaller mortgage.

The problem is still supply; we're not building/approving sufficient new homes.




The solution is to build more, be more permissive with planning, build high-density stuff near railway stations... green belt immediately adjacent to railway stations is total BS and should be immediately granted planning permission for high-density housing like blocks of flats, town houses etc. People wanting to extend/improve existing homes should be allowed to with minimal fuss... back garden extensions, loft conversions are a total no-brainer and should be approved rapidly, it doesn't build a new home but it does add to the total sq ft of living space available, someone able to convert a 3 bed into a 4 bed no longer needs to move/leaves another 4 bed available for the rest of the market etc..

Similar applies to social housing or any NIMBY-style complaints about new developments being the wrong type, there is such a shortage of everything that it shouldn't matter if it's an over-50s-only community or if it's an apartment block with "not enough social housing".. it's all additional sq footage of floor space to add to the market and reduce demand elsewhere, it all helps right now regardless of the type of development.

/rant - tl;dr UK planning system and lack of development is total BS and has one of the biggest negative impacts on the quality of life/living costs of everyone living here

All governments have been restricting building, and allowing companies to advertise properties in other countries, while the same developers don't advertise here.
Become a landowner and destroy proper production and economic output.

 

[Mrwong]

Crazy that BTL is (was) so good an investment in this country that landlords expect to make profit every month. Or rather, crazy that rent is so high in the country that landlords can charge enough to make a profit every month! Let alone the capital gains on the property itself. I'm not going to bother doing the maths but if you put down £50k on a £250k property and rented it out, in 25 years that property would be worth a heck of a lot more than the £100k you'd make if you'd have put that £50k investment into some sort of savings/investment at approx 3%. Add a monthly profit to that and as @gavoo says you can get insane returns. Maybe not so much now that property appreciation has slowed, but if you got into it in the late nineties like a lot of boomers you'd be laughing now.

This is why we are having all these problems, of course the increase in the amount of people which we cannot mention adds to the situation. All these individual problems add up to become one big problem People have been brainwashed to accept and not criticise, then wonder why taxes are rising and new financial charges are imposed in all areas have been growing.

“As soon as the land of any country has all become private property, the landlords love to reap where they never sowed, and demand a rent even for its natural produce.” — Adam Smith

"wages were determined by minimum subsistence level of the workers. Whenever during the growth process wages rise above the subsistence level, population increases and brings them to the level of subsistence. On the other hand, wages cannot fall below the subsistence level because below it workers cannot survive. " Ricardo.

Therefore the greater powers who use the woke culture etc.. or what ever name they like to attach every few years to suppress peoples.
Most people think I am anti immigration, yes I am but not for the reasons they have been taught, it has nothing to do with skin etc..
You know those things that have been attached, to make people think you are bad etc..

 

[Freakbro]

Only if you chose the right location. My own property in Luton has not significantly appreciated once you account for inflation - I posted about it in another thread.

Oh yes, just got another £1000 bill...

Did you forget your keys again?

 

[Scam]

Did you forget your keys again?

lol

In all seriousness @Quartz I'd be interested to know how much you put down as a deposit, what year that was and what your property is worth now (and how much of the mortgage left if applicable). I can't honestly see how any landlord that invested >10-15 years ago could have lost out in comparison with other options. Even without getting a profit every month on top.

 

[bigmike20vt]

all this having a pop at the small fry landlords making a few quid on a handful of properties (sometimes only one) is ignoring the massive elephant in the room. the billionaire property tycoons who own 100s if not 1000s of properties over the UK, as well as a huge percentage of the land.
do you really think any government will have to power to landgrab from the likes of wellcome or Oxbridge university?
they won't....... so as usual it will be the normal person on the street who get nobbled because no government will dare touch the real people affecting these things... it's a bit like the government now... they will increase tax for small businesses or Joe average on the street but the real money people do not get touched, and companies like Amazon will just threaten to close up shop if they get taxed the same as say Albert Arkwright's corner shop.

 

[Freddie1980]

The amount of return on investment you can get for renting out a property is insane considering the property appreciates in value also.

I've rented for about 10 years because no mortgage brokers will lend me enough but if I was rich I'd be a landlord for sure.

It's not always the case, sure over the long term (10 years+) your likely to make money provided you get good tenants who look after the property but for a good yield i.e. annual rental income / purchasing price it can take a long time get the yield close what you get on an ordinary FTSE tracker ISA (and that's using gross income not net, repairs, agent fees and servicing/ground rents on flats all need to paid for).

I wouldn't want to be a landlord in this day and age, the changes to the tax rules means you no longer claim mortgage interest as a taxable deduction, higher stamp duty on properties that are not your main home make becoming a landlord harder and as mentioned above return on investment isn't great (the real return that you see in your pocket is around 2% to 4%) and the property values at the moment are in decline and mortgages are less affordable.

 

[Freddie1980]

all this having a pop at the small fry landlords making a few quid on a handful of properties (sometimes only one) is ignoring the massive elephant in the room. the billionaire property tycoons who own 100s if not 1000s of properties over the UK, as well as a huge percentage of the land.
do you really think any government will have to power to landgrab from the likes of wellcome or Oxbridge university?
they won't....... so as usual it will be the normal person on the street who get nobbled because no government will dare touch the real people affecting these things... it's a bit like the government now... they will increase tax for small businesses or Joe average on the street but the real money people do not get touched, and companies like Amazon will just threaten to close up shop if they get taxed the same as say Albert Arkwright's corner shop.

At least property tycoons are providing somewhere to live, the worst IMO are the overseas investors who have bought huge numbers of homes in and around London (on the back of Crossrail in many cases) and have simply let the property remain empty and unused and don't let it out. A complete waste of a good home for a family or young couple.

 

[dowie]

I'm not going to bother doing the maths but if you put down £50k on a £250k property and rented it out, in 25 years that property would be worth a heck of a lot more than the £100k you'd make if you'd have put that £50k investment into some sort of savings/investment at approx 3%.

Yes, a low return and no leverage would result in a smaller amount than a leveraged bet that turns out good.

You could make a leveraged bet on the stock market too if you like, the difference is that you can be liquidated more easily if it goes against you... whereas with housing if your bet goes wrong you can go into negative equity and well, you're not forced to sell but also you can't necessarily sell unless you have a way of getting back into the green again.

 

[Maple Leaf]

I know some career landlords really don't like people such as ourselves in the game and would be happy for us to leave. reason being we are NOT looking to make profit on the property over and above covering the tax, maintanence and our mortgage (which is tiny)

this means it is very easy for us to undercut landlords looking to make a profit. private landlord businesses are not going to go anywhere ... if anything it is only people like us who will be forced out as it won't be worth the hassle of saving the property for our lad....
which will then mean the big landlord businesses will have less competition.

I may be wrong but my feeling is of people like us quit (my mate recently sold theirs as was not worth the agro) then rent will go up.

all this having a pop at the small fry landlords making a few quid on a handful of properties (sometimes only one) is ignoring the massive elephant in the room. the billionaire property tycoons who own 100s if not 1000s of properties over the UK, as well as a huge percentage of the land.
do you really think any government will have to power to landgrab from the likes of wellcome or Oxbridge university?
they won't....... so as usual it will be the normal person on the street who get nobbled because no government will dare touch the real people affecting these things... it's a bit like the government now... they will increase tax for small businesses or Joe average on the street but the real money people do not get touched, and companies like Amazon will just threaten to close up shop if they get taxed the same as say Albert Arkwright's corner shop.

In my own area, they have just brought in a licensing scheme which will apply to all HMOs (Houses in Multiple Occupation). Houses with 3 or 4 unrelated tenants now have to be licensed by the Council and setting up a new one already requires planning permission (which you will never get). Those licenses cost over £1,500 and only last 5 years. (Houses with 5 or more unrelated tenants are already licensed.) They inspect all these licensed properties and insist on thousands of pounds of over-the-top modifications ostensibly for fire prevention. However, identical houses rented to families of 4 or 5 people, including 2 or 3 young children, do not have to follow any of these enhanced fire protection rules.

Furthermore, they are scrapping the Section 21 (no fault eviction) notice system which means that a small AST (Assured Shorthold Tenancy) student landlord cannot end a student's tenancy when their degree course has ended and get a new tenant in September. This will wreck the student AST HMO letting system, as finding tenants at other times of year (if a student decides to hang around for a while) is very difficult.

The effect of this is that small landlords are now exiting the student HMO market and most of their tenants are having to find places in BTR (Build-To-Rent) apartment buildings and university/private PBSA (Purpose Built Student Accommodation) which is all built and subsequently managed by private companies. These places charge more than double the rent/costs of a traditional HMO for the most basic accommodation. Also, in the latter case, the tenants are not on ASTs so they have very few rights and can be kicked out quickly without any Court action. (During the first Covid lockdown many students living in university/private Halls of Residence were evicted and some lost all their possessions because they went home to their parents, stopped paying the rent and their rooms were then emptied without any right of appeal. That would be illegal in the Private AST HMO sector.)

Of course, it's no coincidence that these BTR apartment buildings and PBSA Halls of Residence are owned by big businesses including Hedge Funds, Pension Funds and foreign billionaires, who doubtless make generous contributions to the Conservative Party. The government is effectively forcing small private landlords (most of whom only own 1 or 2 houses) out of the market so that their powerful friends can take over without having to compete with cheaper accommodation providers. The law of supply and demand will then cause rents to increase and standards to fall due to the decreased competition in the marketplace. The tenants lose out because they then have to pay 2-3 times more rent to live in the same area.