Would you invest in BTLs now?

[Acura]

If you were about to inherit a sizable chunk would you invest in 10+ BTLs right now? 
 

I’ve done my best to get out of the BTL market, so when I was asked this weekend about investing in property I personally advised against it. However, what else reaps the same rewards? 
 

They're thinking of university towns. Definitely not my personal choice but it’s not my money!

 

WWYD? 

[Richlist]

If its someone who has already been doing it successfully for a few years it CAN be a good place to put your money. As we know, new landlords can make some awful mistakes......so new entrants need an experienced buddy (a recommended letting  agent perhaps) or they need to spend time reading do's and dont's.

Even then there are so many variables.....region, location within, type of property, age, condition, price, yield, development potential, type of let, target tenant, sole trader or limited liability, their tax position, their attitude to risk etc etc. It's impossible to generalise without knowing an individual's personal circumstances. However with the best savings accounts offering very little return it's not very difficult to improve the return (sometimes significantly) through the right property investment.

Just to add some balance to my reply although property can be an excellent investment it's also very, very easy to take shortcuts, make the wrong choices or just screw up and loose a lot of money.

[Carryon Regardless]

Personal view.

If I were to inherit enough to buy so many properties, and there will be additional pre revenue costs, I would use it as a draw down fund.

The mind set that we should continually become a greater financial entity is upset more and more by the lack of reliability regarding our forecasting  of the future.

Our Gov't, and no doubt other Gov't's, make it more impossible to understand our responsibilities going forward. They increase our risks and reduce our rewards. The risks of being unable to shed our responsibilities while working for little or no reward becomes greater.

As said though, I can't see a better investment. But I have limited vision and restricted opportunity to look elsewhere.

 

 

[Melboy]

Nearly 4 years ago I got fed up with the low interest rates (which have got even lower!  Nationwide BS 0.2%!! ) and I decided to buy for cash another modern 2 bed property with garage which I had been watching for a while. I really fancied it and I already owned a rental property in the same road so in my disturbed head it made sense to buy it.

At the time it probably wasn't the brightest of ideas and I could tell that Wifey didn't think it was particularly one of my best ideas BUT in this period of time the property has had first rate tenants who are staying put for the foreseeable future and the value has risen to an easy sell on capital profit in excess of £20k in fact, I could have sold it 2 weeks after buying it to a landlord friend of mine who offered me a 5k profit on it........I declined the offer.

Not without it's problems though. New boiler this year and all new fencing required plus electrical work etc. etc. BUT it's all up together now looking very smart and in a prime requested location and I am pleased (smug grin) I did what I did and even the Wife grudgingly agrees now. Who knew that IR would remain so low for so long.

I won't be buying any more though as I am getting too old now and I do have a few rentals which I look after more as an interest than anything else but good luck to anyone else who takes the plunge into BTL.

[Acura]

Thanks everyone. Very insightful, as always. 
 

Personally I’ll be glad to get out of private renting as it has been a 35 year project for me. My husband has always found change-overs stressful, and wants to throw the towel in whenever things need doing. So I’ll be glad to get shot just for a quieter life in that respect, never mind how things have become increasingly more difficult over the years with all the legislations etc. 

Anyhow, thanks again for your input. Food for thought I will pass on. Cheers! 

[Carryon Regardless]

There are a couple of threads where this might seem relevant, but I'll put it here for consideration.

https://propertyindustryeye.com/government-urged-to-do-more-to-stop-btl-landlords-leaving-the-sector/

 

[Grampa]

Its not stopping me. I'm completing on another BTL this week. My target properties have changed from leasehold to freehold though and any new purchases are via a limited company.

Not the best of time of year to complete on and the property needs very little work, just a bit of cleaning and titivating. I have been a bit cheeky and started advertising after exchange (last week) and have 3 viewings friday lined up. So subject to ref's and suitability I may get someone in mid Jan.  

[Richlist]

I definitely think the combination of freehold property purchased through a limited liability company is the way to go in the future. It's the model I aspire to going forward. I've been very happy to sell my leasehold properties over the course of the past 7+ years .......spread over the years in order to reduce my CGT bill.

Small leasehold flats are great in terms of tenants ie usually singles or couples, no pets, no kids and usually no problems but leasehold admin' can be a pain to buy, sell, deal with freeholders, their managing agents, additional fees etc etc. Freehold houses on the other hand are usually easier & quicker to buy & sell, considerably less admin but they attract a different type of tenant.......families, kids, & pets. Balanced against that is they are more likely to stay long term.

[Grampa]

Though I'm steering away from leasehold for all the reasons RL gives above I did purchase one last year, a nice modern 2 bed ex-council flat with its own entrance, parking and courtyard and the only service charges are the insurance contribution of about 120 quid per year to the freeholder which is the council. Though I acknowledge I could get others bills for maintenance as and when required  I see this as an acceptable lower cost compromise of owning leasehold. 

[Melboy]

I never buy leasehold. It's a Melboy thing.

I have to admit that I am considering buying another quality 2 bed house but as I have mentioned I am getting a bit ancient now and should be put out to grass really and call it a day but on hearing the inflation figures in excess of 5% today on R4 I am thinking that holding cash is a waste of time these days and it will only get worse over the next 3 years.

I clearly remember the inflation debacle of the 1970's and how personal cash savings were wiped out very quickly from those lucky enough to have a pile of cash.

[Richlist]

Seems your problem might be tuning in to R4 😉😉......when I was younger listening to anything other than R1 labelled you old and past anything worthwhile. Nowadays there are so many great radio stations that R4 listeners usually find they feel old before their time. Tune in to some real music, turn up the volume and who knows, you may have many more years left as a property investor.

Merry Christmas.

[Melboy]

1 hour ago, Richlist said:

Seems your problem might be tuning in to R4 😉😉......when I was younger listening to anything other than R1 labelled you old and past anything worthwhile. Nowadays there are so many great radio stations that R4 listeners usually find they feel old before their time. Tune in to some real music, turn up the volume and who knows, you may have many more years left as a property investor.

Merry Christmas.

Have you ever thought about Counselling as a career RL   😂

I only listen the once to R4 which is for the weather and 7am news report until about 7.30 and that's it but I take your point.

[Melboy]

On 12/14/2021 at 9:06 AM, Carryon Regardless said:

There are a couple of threads where this might seem relevant, but I'll put it here for consideration.

https://propertyindustryeye.com/government-urged-to-do-more-to-stop-btl-landlords-leaving-the-sector/

 

Yes we are well aware of this and the article comments section probably reflects the majority of the views on here.

Laughable when you think that Shelter and this Conservative government have done more damage to the Buy To Let business and private landlord with their constant law changes etc. etc. and now they they are issuing warnings which we said would happen on this forum (and other forums) 5 or more years ago.

The queue at the local housing office will only get longer and the supply list of available rental property will get shorter.

.....................and by the way.........have you bought any building materials lately? Jeez! the prices for nearly everything has quadrupled. This is going to lead to a huge increase in the next 2 years for new build property and pre-loved property will follow.

[Richlist]

There is a very buoyant market in building materials that are second hand, surplus/old stock, over ordered or generally bought but not required......all at a fraction of normal prices. It requires time & effort to search for it instead of just a phone call but it's out there nevertheless. I only ever buy new stuff if I can't find what I need from other sources......but then unlike builders I'm 

* not usually in a hurry.

* can be flexible as I'm not working to a fixed budget.

[Richlist]

Read a good one today on another forum........a solicitor called out an emergency plumber to stop a water leak. The plumber stopped the leak in just a few minutes and presented the solicitor with a bill for £100. The solicitor asked the plumber for a breakdown of the charges because he was only there for 5 minutes. The breakdown said.....

* To turn off the stopcock - £1

* Knowing which stopcock to turn off - £99

[Melboy]

14 hours ago, Richlist said:

Read a good one today on another forum........a solicitor called out an emergency plumber to stop a water leak. The plumber stopped the leak in just a few minutes and presented the solicitor with a bill for £100. The solicitor asked the plumber for a breakdown of the charges because he was only there for 5 minutes. The breakdown said.....

* To turn off the stopcock - £1

* Knowing which stopcock to turn off - £99

A solicitor, of all people, questioning the high charges.

[Carryon Regardless]

Really a tradesman is at risk by carrying out work for a solicitor.

If he raises an invoice for £100 and the solicitor can demonstrate the charge is £1 too high, and then charges a nominal 15 minutes for demonstrating that, then the tradesman might be billed £26 by the solicitor for his outstanding portion of 15 minutes at £500 p.h.

[Richlist]

Surely the tradesman would remind the solicitor that he also charges for his time. So, the tradesman would then make an additional charge of £26 for being delayed by the solicitor ! Two can play at that game. 😁😁

 

 

 

 

 

[Melboy]

 

Nothing we don't know about already really but an interesting article from the Daily Telegraph. Perhaps one day Government and in particular this current Conservative Government will realise the damage they are doing with their anti landlord agenda.

Personally I'm not selling anything and will continue to fumble on in my own way as always. 😄

War on landlords will cost Britain 50,000 rental homes this year (msn.com)

[Carryon Regardless]

I read an article that says rent inflation is more in the last year than the total of the previous 13, due to a lack of rental properties.

Trouble is I trust the media about as much as politicians.

[Grampa]

2 hours ago, Carryon Regardless said:

I read an article that says rent inflation is more in the last year than the total of the previous 13, due to a lack of rental properties.

Trouble is I trust the media about as much as politicians.

Rents are certainly shooting up and its easy to get left behind. I choose for most of my personal rentals to be under market rent but do increase them like clockwork every year. I have (touch wood) very little turn over of tenants and many are long term tenants but I do deal with maintenance fairly promptly and don't necessary take the cheapest option when buying appliances/carpets etc.   I have seen a number of my client landlords insist on what I would consider excessively high increases such as £50+ pcm on 700-900pcm properties and do the bare minimum on maintenance. Some tenants have swallowed the cost but then put in numerous maintenance requests or upgrade requests but we have had 3/4 tenants give notice because of "large" increases.   

[Carryon Regardless]

Aside from fair rent tribunals,

from today Wales introduce a style of rent cap,

how long before England does similar?

[kanrent]

59 minutes ago, Carryon Regardless said:

Aside from fair rent tribunals,

from today Wales introduce a style of rent cap,

how long before England does similar?

Not long but there is also a natural rent cap, if rents go too high people just won't be able to rent, governments should keep out and allow business to find its own level

[Carryon Regardless]

I tend to agree, with the majority of my tenants that's the case anyway.

Even if local comparison rents went much higher, the money just 'aint there. By squeezing them too hard all I would do is cause them to default. Once that starts they rarely make it back.

Also from today Wales repossessions require 6 months notice, as a start of the process. So not easy to replace them either.

 

[Melboy]

With an almost certainty BoE interest rates will rise at at 12 today from 2.25% to 3%. The warnings have been there for the past 2 weeks and financial institutions have already factored this rate rise into their day to day business. It is not going to stop there either as the USA is currently 4% on the Federal Bank Rate and also likely to go higher next month.   I can see 4% here in the UK by the end of January 2023.

These latest IR rises will seriously affect the BtL market and of course the normal mortgage market money supply. Batten down the hatches for a rough ride ahead. The burning question is of course is Buy To Let property landlord / management business in it's final throes of serious decline and this gloomy prediction is before the Autumn budget on the 17th November where I see BtL landlords and their business getting stuffed yet again.