Buy To Let

[Ric.ror]

I know I bang on about this but I’m nervous. Should I do it?
I have the funds from my recently sold house so I could buy outright or part buy and get a mortgage. I am 56 and would like to have an additional income and also like to save a little. I would like hassle free so would go through a landlord service.


Any advice would be very gratefully received

[HansUrbancka]

I think it's a risky business if you have only one Property for Let.

You need to consider the Pros & Cons of which there is a lot of information on the Net. :- Click the following :-

https://www.bing.com/search?q=Property...Pros+%26+Cons+of+Buying+to+Let&qs=n&;form=QBLH&;sp=-1&pq=property...pros+%26+cons+of+buying+to+let&sc=0-39&sk=&cvid=78DE22B8F9E7405C96397DCA3DAEEAE7

Hans.

[Maydup]

Depending on where you are in the UK, maybe you could by a property for holiday lets rather than let as a permanent home? It might be smaller and less capital outlay, and obviously you wouldnt have the anxiety of tennats. You could sell at any time and even use it yourself or for family breaks. Again agents would look after it for you for a commission.

[KARL]

Frankly, the rental market conditions in your area (i.e. where you buy) are extremely important and also their long term stability. If you are in Knightsbridge then you are pretty well assured fairly strong demand almost indefinitely. At the opposite end of the scale that aspect can be a rather dire prospect. Wherever you buy you need to decide whether to charge at the top of what the market will tolerate (covering all outlays but more difficult to fill/sell) or below average (vulnerable to knocks such as arrears, damage, onerous new legislation - but the best guarantee for bigger choice of tenants and long stays). Being on the average gives you average result: constant hassle at the average rate.

We have been letting a property for more than 35 years and on the whole we have been lucky, it has suited us until more recently. We have taken the latter approach above (below average rate of rent). The flat is part of the building we live in and having control of our surroundings has always been key (no mutual maintenance reluctance). But we find that even though we try to treat our tenants well, even become friends with them, it is in the end disappointing to then often find that they actually harbour the "us and them" attitude and when leaving they suddenly assume we have been exploiting them and all manner of defaults, damage, etc. suddenly crop up. Renting is one form of investment which provides an income but there are others and I would now in many ways like to be rid of the whole thing including our home.

I am assuming you are in the UK, including all your assets. From our experience until now and if I were you, I would move any surplus cash assets out of the UK and into a good foreign currency, the Swiss Franc (CHF) probably being the most impressive historically. Attachment to where we live (house and area) was what led to our buying the other unit, not the attraction of the investment as such although we always hoped not to actually lose on it. If our situation changes in the right way, we will sell everything and radically change our entire strategy.

Obviously, you will in the end make your own decision. Think about how you would cope with repeated hassle over the next 10, 20, 30 years - even if you have an agent you will still get the end result through them: Bad tenants, no tenants for a time, overheads both in agent fees, damage and onerous regulation, etc. Jacking the rent up may solve some problems but that makes others even worse. Being a landlord is not a magic carpet any more than the classic dream of owning a pub. Nobody likes a landlord, us-and-them is a national disease in the UK. If you are considering buying to let for the coming 5-10 years only then don't.

[Ric.ror]

I was thinking of keeping it - using it to part fund my needlessly extravagant lifestyle (its not really but I live beyond my wage) and afterwards to be an inheritance for my heirs

Thank you all for your answers - there certainly is a lot to think about

[AuntLydia]

If you are buying a BTL outright then work out the Return in % taking into account extra costs such as safety certificates maintenance etc. Bear in mind any rental income is taxable and you can no longer use mortgage payments as an expense against Tax. Tenants can be a pain and eat into your rental profits. If you have to evict them it literally is a nightmare. I'm selling my BTL using an agent that only sells property with tenants in. They are good tenants, the rent is paid direct to me through a refugee programme and they have the place spotless. The selling company reckon on the house valued at £85k the return per annum on investment will be around 6% if no mortgage was involved, much better than savings accounts . £400 per month rent though is hardly going to fund a fancy lifestyle and often cheap rental homes are in places that private buyers would not want to live. I would not advise BTL as an investment....but know a nice house for sale if you insist lol!

[fiction-factory]

At 46 I might have done it but at 56 i decided it wasn't for me based on stories I'd heard . If I'd got say £10000 from a house sale (and I realise it coudl be a lot more in your case) at age 56 I'd have invested some in my pension AVCs if I was still paying tax at 40% but would have either moved house or put the money in an investment and draw down say £11000 a year over 10 years (allowing for modest interest) until I got to state pension age

[fiction-factory]

^ Oops- If I'd got say £100,000 ...

[Ric.ror]

Once again - thank you for the answers so far - they have all been most thought provoking