Any Buy to Let Experts? Good and Bad Experiences Sought

[Ernest]

Buy to let are scum of the earth and should be taxed out of business

 

[Vegas Seagull]

Scum.

'You're only 'scum' if you don't own the roof over your own head' c NVH Hove's leading landlord

 

[Vegas Seagull]

As somebody who is early 30s has a solid professional career and cannot imagine buying a house without a bunse from somewhere (which coming from a working class family is not going to happen) very valuable.

You'll be ok with 5 or 10 years of existing savings from your 'solid, professional career'

 

[Lord Bracknell]

Blame the politicians and regulators for this situation

Indeed.

We need to question the ludicrous Coalition propaganda that claims that the new rules that allow folk to convert their pension pots into a lump sum will be a good thing. The effect can only be further distortions of the housing market, combined with widespread personal tragedies arising from the collapse of the pension system.

 

[Uncle Spielberg]

Indeed.

We need to question the ludicrous Coalition propaganda that claims that the new rules that allow folk to convert their pension pots into a lump sum will be a good thing. The effect can only be further distortions of the housing market, combined with widespread personal tragedies arising from the collapse of the pension system.

It will have a massive impact LB the politicians and regulators do not know what they have done, one allowing a btl bonanza and the other making it impossible for millions of people to ever own their own property

 

[Vegas Seagull]

Happy New Year All

I've thought about going down the buy-to-let route for some time now and, if brave enough, will make 2015 the year I commit!

Throughout the normal course of life, I've bought and sold properties (sole residences that I've lived in) and am now in the fortunate position of having a sizable amount of equity.

Rather than ploughing it all back into another residential property, I'm considering downsizing my residential property and using most of the equity to purchase a flat to rent out. (I'd still need some of the equity as a deposit on the residential property which would have to be mortgaged.)

As a beginner landlord, I would use a letting agency to manage the tenants etc. How astronomical are their fees?

I don't have a very high risk appetite; I've worked too hard for too long to risk losing it all now, so I'd want to play it as safe as possible, i.e. flat near Brighton station. But I'm petrified that tenants will trash the place and I'll end up spending any profit on repairs, or worse, end up in debt.

I'd still be working so looking to do this as a sideline to boost my woefully inadequate pension fund!

I do have an appointment with an IFA next week to discuss financials, but just thought I'd try and get some personal experiences, both good and bad, from the wise owls of NSC. Would you recommend it? Have you done and wished you hadn't?

So please share your thoughts, by PM if preferred. I would appreciate it.

Many thanks in advance.

One bed flats are the easier to let & sell on involving less people to disagree/move/get partners etc. The advertising hoardings' at The Amex are a good place to look for a good local firm who are 'Friends of the Albion'

 

[clippedgull]

Buy to let are scum of the earth and should be taxed out of business

Isn't that what Tony Bloom is doing to us at the Amex?

 

[Seagull58]

Be extremely discriminatory. You'll be seeking employed, white, mid twenties to early 30 's professional people with references, deposits, work record and good diction. And remember, letting agents are concerned with making money for one person, guess who that is.
You're welcome.

Good advice but you can still get burnt. I had one that fitted the description above but she had a nervous breakdown, lost her job and didn't tell me. she fell 2 months behind with the rent twice and I let her stay both times because the outstanding money finally turned up both times, courtesy of her parents and her ex-boss (and lover!) as I subsequently found out. I eventually had to get a court order for eviction, at which point she moved out. I ended up about 2 grand out of pocket but it wasn't too bad. Apart from her I have had 3 excellent tenants over 5 years, including one who redecorated and put a new cooker in the kitchen all at her own expense, leaving the cooker when she left. I pay 8% to a letting agent. My place is in Horsham. My ex-wife has rented out a 1 bedroomed flat in Horsham for 17 years (14 years with one tenant) with no problems whatsoever. I would recommend it.

 

[deletebeepbeepbeep]

You'll be ok with 5 or 10 years of existing savings from your 'solid, professional career'

How are you meant to save any substantial amount of money (i.e. the 20k required for a deposit) when you are spending £800 on rent a month, try renting a single flat anywhere in Brighton for less that £750 a month, it is not possible. Then for most of Brighton you can stick £70 CT a month of top of that. And then Bills and then any transport you need for work because Brighton has barely any non service level jobs.

 

[beorhthelm]

Buy to let are scum of the earth and should be taxed out of business

thats all very well to say, but how would you frame such a tax to avoid those who circumstances mean they rent out a property? or other landlords for that matter, who is going to provide private rental if you exclude anyone who borrows money to buy property?

 

[Sleaford Seagull]

How are you meant to save any substantial amount of money (i.e. the 20k required for a deposit) when you are spending £800 on rent a month, try renting a single flat anywhere in Brighton for less that £750 a month, it is not possible. Then for most of Brighton you can stick £70 CT a month of top of that. And then Bills and then any transport you need for work because Brighton has barely any non service level jobs.

Christ! Glad I moved from Sussex really then! £10k is pretty standard deposit for first home where I live(Lincoln/Newark).
Most of my friends pay £400-£500pm rent on 2 bed houses with gardens etc. Salaries aren't hugely different either, well at least not when compared to the property price difference.

Buy a 3 bed detached house in the Midlands, somewhere on the high speed train link to London, then rent it out and use profits to save for a property in Sussex? There's no shortage of property around me

 

[Ernest]

thats all very well to say, but how would you frame such a tax to avoid those who circumstances mean they rent out a property? or other landlords for that matter, who is going to provide private rental if you exclude anyone who borrows money to buy property?

Buy to let landlords should be EXECUTED for TREASON

 

[The Antikythera Mechanism]

For some it's just a case of having savings that cannot, currently, return better than 3%,before tax, after investing for 5 years. The banks are saying that the FTSE will rise between 10-15% this year, but how many will be prepared to gamble on this?

 

[mwrpoole]

Happy New Year All

I've thought about going down the buy-to-let route for some time now and, if brave enough, will make 2015 the year I commit!

Throughout the normal course of life, I've bought and sold properties (sole residences that I've lived in) and am now in the fortunate position of having a sizable amount of equity.

Rather than ploughing it all back into another residential property, I'm considering downsizing my residential property and using most of the equity to purchase a flat to rent out. (I'd still need some of the equity as a deposit on the residential property which would have to be mortgaged.)

As a beginner landlord, I would use a letting agency to manage the tenants etc. How astronomical are their fees?

I don't have a very high risk appetite; I've worked too hard for too long to risk losing it all now, so I'd want to play it as safe as possible, i.e. flat near Brighton station. But I'm petrified that tenants will trash the place and I'll end up spending any profit on repairs, or worse, end up in debt.

I'd still be working so looking to do this as a sideline to boost my woefully inadequate pension fund!

I do have an appointment with an IFA next week to discuss financials, but just thought I'd try and get some personal experiences, both good and bad, from the wise owls of NSC. Would you recommend it? Have you done and wished you hadn't?

So please share your thoughts, by PM if preferred. I would appreciate it.

Many thanks in advance.

Go for it.

Use a reputable letting agent. 10% is about right for 'lettings' only, that means you deal with any maintenance issues yourself. You could let them manage the whole thing for you but that'll be nearer 15% + their choice of tradesmen. In years to come you may decide to do away with the agents and do it yourself, but for now play safe.

For their money, they will vet all tenants and run reference checks on them, so you should be confident that the tenants have history of renting and a good record of doing so.

It costs me about £400 a year but I take out a policy with British Gas that covers boiler, heating, drainage, wiring, leaks etc etc. Just means any problems you can ring them and get a reasonably quick service for emergencies.

BTL mortgages are very cheap at present, I've just extended for another 3 years at 3.4% fixed.

The tenants have to put down a deposit, usually 10% of the annual rent. This is only returned to them if they leave the property in good order. I've never had reason to keep any of the deposit and the property has always been left spotless, which you would expect seeing as they want their deposit back.

I would offer unfurnished tenancies rather than furnished. From my experience, people have their own furniture and move with it, and it means you have less stuff to maintain and worry about.

My current tenants are paying 6 months rent up front each time, and have just paid for their 3rd 6 months. Previous to that tenants were paying monthly and the letting agent offered an insurance at 1.25% that offered a rent protection scheme, so should the tenant not pay then the insurance would, and it also covered any legal costs if I had to evict them for non payment. An additional cost and never had to use it, but for the few£ per month it does give you a comfort factor, and bear in mind you effectively only pay 80% of the cost due to the generous tax man. Not all agents offered this but I went for the one who did.

You will also need landlord property insurance and you can include 'contents' to cover white goods and other fittings.

You should do some basic sums to work out your monthly/annual profit. An IFA will advise but bear in mind the profit is taxable.

 

[Uncle Spielberg]

3.39% fixed for 3 years is the best I can find up to 65% ltv, TMW

 

[Dick Head]

What about an recruitment consultant who is also a property landlord ?

What about an recruitment consultant who is also a property landlord and who is also Bill Archer ?

 

[mwrpoole]

Indeed.

We need to question the ludicrous Coalition propaganda that claims that the new rules that allow folk to convert their pension pots into a lump sum will be a good thing. The effect can only be further distortions of the housing market, combined with widespread personal tragedies arising from the collapse of the pension system.

I await to see if this actually happens. Taking your entire pension out and paying tax of 20/40% on it (after the free 25% part) doesn't seem to make sense to me. You can already take out 25% tax free and that would provide a decent enough deposit for a BTL for most. If it doesn't would you really want to take more out and pay tax on it?

 

[Uncle Spielberg]

I await to see if this actually happens. Taking your entire pension out and paying tax of 20/40% on it (after the free 25% part) doesn't seem to make sense to me. You can already take out 25% tax free and that would provide a decent enough deposit for a BTL for most. If it doesn't would you really want to take more out and pay tax on it?

Depends, at 55 why not, if you have £ 50k , 12.5k tax free, 37.5k say 20% = £ 7500 you can access £ 42.5k of it and use it to build up a property portfolio whereas with an annuity especially if you are single you wait until 65 and if you die it ends up with the company, this way people will have a meaningful asset to pass on

 

[Seagull58]

Depends, at 55 why not, if you have £ 50k , 12.5k tax free, 37.5k say 20% = £ 7500 you can access £ 42.5k of it and use it to build up a property portfolio whereas with an annuity especially if you are single you wait until 65 and if you die it ends up with the company, this way people will have a meaningful asset to pass on

But you don't have to buy an annuity. You can go into income drawdown and remain invested in whatever asset classes you want indefinitely. All passed on to your descendants when you die.

 

[MattBackHome]

...And then Bills ...

There are other, less expensive cafes to eat in. HONK.

(Sorry - and I agree entirely with your general point)