The joy of being a landlord

[OspreyO]

It depends what you mean by worse off. Maybe in terms of short term cash flow a landlord could be worse off, but in general in terms of overall wealth and assets they will still be much better off.

I would also say the main risk of landlords losing money is negative equity when the property market crashes. Property market crashes are also a symptom of artificial price inflation via too much credit extension in mortgage loans (which in recent times has been saved by currency issuance via money printing). The market gets pumped too much by a greedy banking sector, which in turn can lead to a property crash which is very damaging for the small time landlords.

I don't have a problem with the role of landlord, many of whom do a valuable job in terms of their property transformation / upkeep skills, more with the runaway banking sector. I think the banks are to blame, but they have captured government, and the problem is poorly understood by most British people because they don't take enough interest in finance. Hence we have the boom and bust cycles of today. Personally I advocate for paper currency issuance to be taken out of the hands of the private banking sector, and feel this would solve many of the problems with the UK economy and the housing market, and allow a much more prosperous capitalist economy. The best solution I have seen for this is Bitcoin. However, those in power will not want to give up the immense power that comes with the ability to issue currency.

If the LL owns the house for 20yrs. Something has to pay all the costs and risks to get to that point.

 

[413x]

I don't understand how people are saying mortgages are more than rent.

My rent was significantly higher than my mortgage. Well it would have been for the equivalent.

I rented am absolute dive for 500ppm and was 825 when first got the house.
8 can't imagine what rent on house would be well over 1k

 

[radderfire]

This is false, you're just posting more crypto shill/conspiracy drivel based on some half-baked notions of how money supply works.
...
Speculating on crypto is risky and while some have made money plenty of others have lost as is the nature of speculation, this doesn't really address the issue with the lack of supply of housing in the UK.

We'll agree to differ on how money supply works, but there have been massive bank bailouts in 2008 and since then, so "money" is being introduced to the system artificially when proper capitalist economics would have let banks go bust.

I am not talking about crypto speculation, which is risky, I am talking about Bitcoin becoming the underlying currency of the country. Essentially this creates a possibility of accountability to the real world (non-financial) economy in as best a democratic fashion as possible, when currently we have very little.

 

[413x]

We'll agree to differ on how money supply works, but there have been massive bank bailouts in 2008 and since then, so "money" is being introduced to the system artificially when proper capitalist economics would have let banks go bust.

I am not talking about crypto speculation, which is risky, I am talking about Bitcoin becoming the underlying currency of the country. Essentially this creates a possibility of accountability to the real world (non-financial) economy in as best a democratic fashion as possible, when currently we have very little.

Have you ever made a post not mentioning bitcoin?

 

[Quartz]

but in general in terms of overall wealth and assets they will still be much better off.

You have no idea of the amount of damage a tenant can do to a property.

 

[OspreyO]

You have no idea of the amount of damage a tenant can do to a property.

That certainly a big issue.

But how to do people imagine the annual maintenance is funded. A leak, an appliance breaking down. There are on going costs that occurring during a a tenancy not just when it ends, or when the property is sold.
The rent has to exceed the annual cost of maintenance and administration. Do they think its run at a loss for 20yrs then only return a profit when it sold, if you get lucky with the market at the time.

Yes people take advantage and their are bad LLs and tenants. But the majority are just normal people. The books have to balance.

 

[Thekwango]

Much the same as we go around with the virtuous landlords association that seems to be on OCUK and the need for them to continually justify themselves

i don't really think i've seen anyone having to justify themselves on here. i have seen some defend themselves from the sweeping statements some of our more sheltered posters have posted.

 

[Zenduri]

I love this thread

 

[Thekwango]

I love this thread

why?

 

[OspreyO]

why?

Nervous laughter.

 

[Zenduri]

why?

Partly due to some of the people in her, the clear very poor attempted baiting from some and how vicious people from both sides are with their viewpoints

 

[Thekwango]

Partly due to some of the people in her, the clear very poor attempted baiting from some and how vicious people from both sides are with their viewpoints

not sure why you'd enjoy reading folks vicious viewpoints. i find it rather sad, from both sides of the argument, that people can't debate openly and honestly without resorting to insults and digs. but then that's what social media and forums have done. they've empowered the gutless and cowards of the world to act the 'big fella' on the internet. some of the accusations and insults, whether direct or implied, would almost certainly have resorted in some of the posters in here being told to and made to **** off. again, that goes for both sides of the argument.

 

[bigmike20vt]

I don't understand how people are saying mortgages are more than rent.

My rent was significantly higher than my mortgage. Well it would have been for the equivalent.

I rented am absolute dive for 500ppm and was 825 when first got the house.
8 can't imagine what rent on house would be well over 1k

you know.... i think you may be right assuming you exclude maintanence issues... just chatting to a lass i work with who rents.... her rent for a small 2 bed flat with her partner is £1K per month excluding bills.

part of the issue is she is in london/cambridge commuter territory near a train station, but that is wasted on her as she doesnt work in london or cambridge.

either way she said i was hugely under charging on our flat so that made a nice chance to be accused of that rather than the devil incarnate or a money scrubbing scumbag

i was stunned at that tho. £1k per month for a flat and not even in cambridge or london. she should move into our flat.. only 1 bed but square footage its at least as large as hers... but would need me to evict our current tenant....... am sure that would get support here

 

[Mesai]

I don't understand how people are saying mortgages are more than rent.

My rent was significantly higher than my mortgage. Well it would have been for the equivalent.

I rented am absolute dive for 500ppm and was 825 when first got the house.
8 can't imagine what rent on house would be well over 1k

Depends on so many factors. You can rent in central London for £1500-2000, but try and buy one of those places for anything close to that (assuming a "normal" deposit).

House prices have increased far more than rent has so there is a notable difference. Owning a house is also more expensive than just renting.

 

[OspreyO]

not sure why you'd enjoy reading folks vicious viewpoints. i find it rather sad, from both sides of the argument, that people can't debate openly and honestly without resorting to insults and digs. but then that's what social media and forums have done. they've empowered the gutless and cowards of the world to act the 'big fella' on the internet. some of the accusations and insults, whether direct or implied, would almost certainly have resorted in some of the posters in here being told to and made to **** off. again, that goes for both sides of the argument.

I think it's a bit like the dirtiest player on the pitch trying to play the victim card.

It's a not a laughing matter for many be they tenant or landlord.

 

[NVP]

We will be renting below market rates, not because there’s no mortgage on the rental property to pay and not for some moral high ground but because we want someone in it long term - my view is, the right person will make it their home, which hopefully means they’ll take better care of it (they’ll be more than welcome to redecorate for example, within reason obviously, we may even come to some agreement on a temporary rent reduction if they’ve saved me having too!)
I appreciate I’m relatively lucky in that we live in a small town (10k residents or thereabouts) so if we don’t know the potential renters personally, it won’t be hard to find someone we know who does. Means we can do our ‘due diligence’ as best we can in advance of anyone moving in.

I've found the cheaper the rent the poorer the tenants (is that a pun?). If you want someone to make it a home find the biggest businesses in the area and ask to advertise on their workplace notice boards. Professionals only, couples preferred. Then you're good.

 

[413x]

Depends on so many factors. You can rent in central London for £1500-2000, but try and buy one of those places for anything close to that (assuming a "normal" deposit).

House prices have increased far more than rent has so there is a notable difference. Owning a house is also more expensive than just renting.

Yeah obviously this is anecdotal.
But this was a terrible (well I class it as terrible) 1 bed upper floor of a converted house.
Had electric heating. Where if you turned the heaters on you could smell dust burning. Where the outer door handle fell. Off in my hand and the kitchen cupboard doors were falling off from rot. Bathroom was obviously once white but plastic bath and toilet were discoloured to yellow.

And that was 500 a month in a cheap part of outer Cardiff.

For full Disclosure the 825 ppm mortgage was on a 260k house with a 42k deposit (so 84pc ltv) on a 28 Yr mortgage.

The house needed no work (although spent a lot on redecorating). I'd say maintaience has been minimal. Nothing big has gone wrong except an electrician for a burning out shower junction box.

So really, here, it's far far in favour of having a mortgage vs rent.


325ppm difference for a hugely better property.

I'll have a look and see if I can find it the value of the old rental.


Found it
Zoopla estimates
My house = 340k (825ppm mortgage @ 27 years 84pc ltv)
Old rental = 115k (500ppm)

This rental figure is for 2020 as well. Bet its much higher

 

[mattx4]

Yeah obviously this is anecdotal.
But this was a terrible (well I class it as terrible) 1 bed upper floor of a converted house.
Had electric heating. Where if you turned the heaters on you could smell dust burning. Where the outer door handle fell. Off in my hand and the kitchen cupboard doors were falling off from rot. Bathroom was obviously once white but plastic bath and toilet were discoloured to yellow.

And that was 500 a month in a cheap part of outer Cardiff.

For full Disclosure the 825 ppm mortgage was on a 260k house with a 42k deposit (so 84pc ltv) on a 28 Yr mortgage.

The house needed no work (although spent a lot on redecorating). I'd say maintaience has been minimal. Nothing big has gone wrong except an electrician for a burning out shower junction box.

So really, here, it's far far in favour of having a mortgage vs rent.


325ppm difference for a hugely better property.

I'll have a look and see if I can find it the value of the old rental.


Found it
Zoopla estimates
My house = 340k (825ppm mortgage @ 27 years 84pc ltv)
Old rental = 115k (500ppm)

This rental figure is for 2020 as well. Bet its much higher

Your not really comparing apples to apples here.

If you were to put that house on the market now a ftb with a 10% deposit would be paying around 1700 a month on a mortgage 30 years at 5%. If you were to rent it out I'm guessing it would be around 1-1.2k a month

So if your a ftb looking to move to a new area you could rent for over 500 a month cheaper than buying.

 

[Quartz]

But how to do people imagine the annual maintenance is funded.

Yes, but people look at it just in terms of the rent and the mortgage paid, without reference to anything else. Look upthread where one landlord's tenant is looking for them to spend £4k on something which will take years to recoup.

 

[413x]

Your not really comparing apples to apples here.

If you were to put that house on the market now a ftb with a 10% deposit would be paying around 1700 a month on a mortgage 30 years at 5%. If you were to rent it out I'm guessing it would be around 1-1.2k a month

So if your a ftb looking to move to a new area you could rent for over 500 a month cheaper than buying.

But back when it was 260 I assume that flat would have been worth.. 90? 100?


So when the mortgage here was 825 the rent there was 500.
So a house worth 2.5x. But the rent to. Mortgage ratio is is about 1.6x (ish)

Sure you have the deposit there. But still. Around here renting much more expensive than mortgage