Non aviation content. Play nice – No religion, no politics and no axe grinding please.
#1690690
cockney steve wrote:Tenants can be very demanding on the repair and decoration front. broken appliances, electrical fittings, door locks,plumbing, toilets..... not to mention the "voids" (attempting to re let)


To be fair the tenants don't even have to be demanding if there is a significant failure, worst case a central heating boiler that could easily be several months rent down the pan.

Close friends of mine have his and her's BTL lets properties, one each for their pensions. They're in nice parts of town in South Manchester, their policy has been to pitch low on the rent to retain good tenants who don't cause them problems; it has worked well both are in long term stable lets (5 & 7 years), so no spells empty. However, both properties have had new boilers in the last 3 years.

The type and location of the properties is giving reasonable capital growth.
#1690693
Popeye wrote:If you can stretch to it go for a small freehold house. We started off with a flat and had our fingers severely burned by service charges, etc. Management companies are largely licensed bandits.

Surely the tenant would be paying the service charges? ( and a managed let through an agents would be taking 10% plus vetting costs)
#1690725
^^^^^^^ You see it as a charitable rebate, then? Still using a microwave that the tenant claimed wasn't working late at night....that necessitated a trip to Tesco for a replacement......she did a runner owing ~£400.
another, allowed her child to scribble on the wallpaper in the adult's bedroom (it was very expensive and covered only one wall, fortunately. The successor did not enjoy such opulence !
Tenant and Ex caused a disturbance an internal wall was casualty, sustaining a hole caused by an errant fist /boot /bottle.


Capital growth is fine if you don't need an income! Building societies demand at least 2% extra interest for a BTL mortgage. -As noted, only Limited Co's get the tax-breaks to make it work. the smaller investor is being squeezed out and forced to go to big business/banks. (How's that for a conspiracy- theory? :P
#1690728
eltonioni wrote:The sinking fund pays for broken boilers. Such things separate serious landlords from the rest who see a broken boiler as lost rent.

A sinking fund is simply profit that you put by for contingencies. It will still be taxed, whatever you do with it.
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#1690729
Barcli wrote:Surely the tenant would be paying the service charges? ( and a managed let through an agents would be taking 10% plus vetting costs)

Nope. Ground rent and service charges are covered by the landlord. Tenants are generally responsible for council tax, water rates, power and telecoms.
#1690742
Colonel Panic wrote:With a “buy-to-AirBnB” what happens to the Council Tax? We are being right royally screwed by the local council who are now charging us Double Council Tax because a property is empty pending re-development. Grrrr.


Just register yourself as living there. No law against living between 2 homes as long as you don't register to vote in both.

Claim single person relief.
#1690747
Flyingfemme wrote:
eltonioni wrote:The sinking fund pays for broken boilers. Such things separate serious landlords from the rest who see a broken boiler as lost rent.

A sinking fund is simply profit that you put by for contingencies. It will still be taxed, whatever you do with it.

It's not my area of expertise, but you might want to get some advice on that. At 6% gross yield there's not much to tax anyway.
#1690749
Colonel Panic wrote:With a “buy-to-AirBnB” what happens to the Council Tax? We are being right royally screwed by the local council who are now charging us Double Council Tax because a property is empty pending re-development. Grrrr.

We pay council tax on both our properties, even though we only ever occupy one at a time - that's just the way the system works.
I've got a relative that converted a garage into a place for visitors to stay ... and now get's charged an addition council tax on it because it's capable of being inhabited as a stand-alone dwelling (having it's own kitchen and en-suite seemed to be the trigger).
#1690753
cockney steve wrote:^^^^^^^ You see it as a charitable rebate, then?

I don't, it's a business. I'm not a landlord though so as I say, it isn't my area of expertise when it comes to how small landlords set themselves up.

cockney steve wrote: the smaller investor is being squeezed out and forced to go to big business/banks. (How's that for a conspiracy- theory? :P

They certainly are, no conspiracy about it. :P

The 2015 Cameron / Osborne budget talked of increasing the number of affordable homes to buy. The 2016 May/Hammond budget talked of increasing the number of affordable homes to rent. A subtle but important switcheroo. Quite a surprising (and probably very stupid) switch for a Conservative government to make too.

What has happened in the last few years is that large scale apartment renting has become an investment sector that large funds are muscling into at the request of HMG to "solve the housing crisis" by institutionalising it. The taxation system seems to have been changed to squeeze smaller investors out of owning the property and into owning a financial product.

It happened with student accomodation 20 years ago and now it's the turn of private renters. When I produced my first large student scheme in 1998 I remember pals with student lets telling me that students didn't want to live in big blocks instead of living in a house with their mates. I've done a few more since then and each one fills as soon as it is completed, and another hundred or so houses drop out of the student lettings market. Many of these have been picked up by smaller landlords looking to rent to non students. Those houses are going to find themselves without tenants in the next few years too, so they will cycle back into private family homes as landlords drop out of the market.

I can see how incredibly frustrating it must be for nice people who have been quietly renting nice property to other nice people for years. It's happening though, and we can't stop it, so a small private landlord buying today needs to take extra care because the future will favour new institutional grade property.
#1690842
I still think property is a good long term investment in spite of recent changes. In general, property grows in value over time, and can earn income in the meantime.

Avoid the over 55's flat. You're limiting your potential market and i doubt it will appreciate at the same rate as an unrestricted property.
#1690852
Flying badger  wrote:I still think property is a good long term investment in spite of recent changes. In general, property grows in value over time, and can earn income in the meantime.

Avoid the over 55's flat. You're limiting your potential market and i doubt it will appreciate at the same rate as an unrestricted property.


It is potentially a good long term investment, but owning just a single property is very risky. You need multiple properties to make it a reliable.

A simple questions to ask yourself,
    can you afford zero income for a year?
    Can you afford/face gutting and refitting the property with little notice?
    Are you prepared to evict?

It may sound like I've had a bad run of tenants, I haven't really but it has been hard work at times.

Worst tenant? School teacher. Turned out to be an alcoholic that constantly beat his partner, who had recently been released from prison. Including legal costs, that one cost the equivalent of about 6 months rent.

Best tenant? Bought a block of 4 flats with sitting tenants. Vendor said "flat 4, Sue, lovely lady, don't know much about her, uses it as an office". Runs it as a massage parlour/brothel more like. Pays rent on the dot, no hassle other than when a client had a heart attack and died!
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