So are Landlords finished?

[s1962a]

Puzzles said:

They'll be able to lobby far more successfully than the almost completely powerless small time landlords.

Considering how many MPs are landlords there might be some conflict of interest.

https://news.sky.com/story/more-than-100-mps-earn-...

[Killboy]

98elise said:

When you're in the letting business it's a good idea to know what the letting is like.

This may shock you but I also know what the houses are worth if I were to sell them

All part of the invaluable service of helping people stay in rented houses forever.

[Prizam]

Oakey said:

PH's landlords suddenly embarassed at what they rent their properties out for...

Nope. I'm about to sell my primary residence. I was going to rent it out once I get the new place. But no, it just doesn't make sense.

- Prime rental property, 3-bed semi. very desirable area, lots of good schools etc... would rent for around £1,500 a month.
- Legally, I have naff all come back if someone rents it, then decides they would rather live for free and not pay rent. that can wipe out a year's worth of income.
- A LOT of folks, leave the place in a complete state. Get just 1 of those in 10 years and any profits are wiped out.
- Would get a similar return from a decent savings account
- No mortgage

So... the government gets what it wants. I won't be a landlord, one less property on the rental market, Supply and demand means the average rental goes up a bit. I pay less stamp duty, I pay less income tax, My budget for the next place increases and I have fewer headaches.


Side note edit: The house sold over asking, in under a week, last year in the winter just before Christmas... to a couple that were renting. With a very large cash deposit. So I guess there is plenty of cash sloshing about from responsible renters, and although the rental market isn't getting my property, it will gain back the ones my buyers are leaving.

Edited by Prizam on Monday 29th April 09:12

[Killboy]

I like how everyone uses the rental income vs costs to show the unattractiveness of being a landlord, but don't seem to factor in the property price growth of the last 10/20 years.

[Prizam]

Killboy said:

I like how everyone uses the rental income vs costs to show the unattractiveness of being a landlord, but don't seem to factor in the property price growth of the last 10/20 years.

That if you want to capitalise on it, you must pay capital gains tax. Go and look up a calculator to see how eye-watering it is.

You said 10/20 years, so let's go with 15 years of compound interest in a bank at 5%. (I have more than this on my savings)


In 15 years you would have 111.37% return.
It would take 13 Years, 11 months to double the value.

Arguably though, if you are a higher rate tax payer, capital TAX gains and a good accountant could be cheaper. But it only takes 1 person to trash the house or play silly buggers in not paying rent for a couple of years to well and truly wipe all of this out.

[Killboy]

Prizam said:

That if you want to capitalise on it, you must pay capital gains tax. Go and look up a calculator to see how eye-watering it is.

You said 10/20 years, so let's go with 15 years of compound interest in a bank at 5%. (I have more than this on my savings)


In 15 years you would have 111.37% return.
It would take 13 Years, 11 months to double the value.

Arguably though, if you are a higher rate tax payer, capital TAX gains and a good accountant could be cheaper. But it only takes 1 person to trash the house or play silly buggers in not paying rent for a couple of years to well and truly wipe all of this out.

Okay. I'm having difficulty finding one in my neighborhood for exactly 15 years

£945,000 11 Oct 2019
£277,500 19 Oct 2001
240.541% increase over 18 years

£840,000 8 Jul 2019
£435,000 15 Mar 2013
93.1034% increase over 6 years

£525,000 12 Mar 2015
£362,500 24 Aug 2007
£220,000 9 Aug 2002
44.8276% increase in 8 years, 138.636% increase in 13 years

So yeah, property seems to be outperforming 15 year savings at 5% by about double?

[JagLover]

Killboy said:

Okay. I'm having difficulty finding one in my neighborhood for exactly 15 years

£945,000 11 Oct 2019
£277,500 19 Oct 2001
240.541% increase over 18 years

£840,000 8 Jul 2019
£435,000 15 Mar 2013
93.1034% increase over 6 years

£525,000 12 Mar 2015
£362,500 24 Aug 2007
£220,000 9 Aug 2002
44.8276% increase in 8 years, 138.636% increase in 13 years

So yeah, property seems to be outperforming 15 year savings at 5% by about double?

Past performance is no guarantee of future performance. House prices are very high based on affordability ratios so expecting a 5% compound return from capital gains alone is being optimistic.

[markh1973]

Prizam said:

Killboy said:

I like how everyone uses the rental income vs costs to show the unattractiveness of being a landlord, but don't seem to factor in the property price growth of the last 10/20 years.

That if you want to capitalise on it, you must pay capital gains tax. Go and look up a calculator to see how eye-watering it is.

You said 10/20 years, so let's go with 15 years of compound interest in a bank at 5%. (I have more than this on my savings)


In 15 years you would have 111.37% return.
It would take 13 Years, 11 months to double the value.

Arguably though, if you are a higher rate tax payer, capital TAX gains and a good accountant could be cheaper. But it only takes 1 person to trash the house or play silly buggers in not paying rent for a couple of years to well and truly wipe all of this out.

But you wouldn't have got 5% interest on yoru savings for large chunks of the last 15 years.

[Prizam]

JagLover said:

Killboy said:

Okay. I'm having difficulty finding one in my neighborhood for exactly 15 years

£945,000 11 Oct 2019
£277,500 19 Oct 2001
240.541% increase over 18 years

£840,000 8 Jul 2019
£435,000 15 Mar 2013
93.1034% increase over 6 years

£525,000 12 Mar 2015
£362,500 24 Aug 2007
£220,000 9 Aug 2002
44.8276% increase in 8 years, 138.636% increase in 13 years

So yeah, property seems to be outperforming 15 year savings at 5% by about double?

Past performance is no guarantee of future performance. House prices are very high based on affordability ratios so expecting a 5% compound return from capital gains alone is being optimistic.

Yes, Based on the last 15 years, 5% is optimistic. looking at the next 10 years, I don't think it's that far off. It's also guaranteed. No boilers, kitchens, piss takers or empty periods.

The last 15 years of house price growth has been "not normal". Fueled by very low borrowing and living costs. Does anyone think that in the next 10 years, houses will do another 100%?

Either way, I don't have any skin in the game. I'm out. I would have liked to keep hold of the house because, well... I love it. My children were born here, and it would make a nice fallback, should everything go horribly wrong.

[Panamax]

Prizam said:

Nope. I'm about to sell my primary residence. I was going to rent it out once I get the new place. But no, it just doesn't make sense.

Presumably that's more because you'll upset the "CGT free" position of your main residence and have to pay the higher rate of Stamp Duty on the new home if you're not replacing a main residence.

[Prizam]

markh1973 said:

But you wouldn't have got 5% interest on yoru savings for large chunks of the last 15 years.

Fine, bung it in investments then. Probably about as risky as renting. The average over the last 15 years is around 12% PA.

5 years to double your money, compound.
15 years is 499%, compound

My point still stands.

[Killboy]

JagLover said:

Past performance is no guarantee of future performance. House prices are very high based on affordability ratios so expecting a 5% compound return from capital gains alone is being optimistic.

Well these are real numbers. Who knows if 5% savings are here to stay

[Prizam]

Panamax said:

Prizam said:

Nope. I'm about to sell my primary residence. I was going to rent it out once I get the new place. But no, it just doesn't make sense.

Presumably that's more because you'll upset the "CGT free" position of your main residence and have to pay the higher rate of Stamp Duty on the new home if you're not replacing a main residence.

Yes, that's a part of it.

Why does this country hate people who work to a position of affording additional properties? For 99% of people, it's not like it "just happens".

We should celebrate success and show others how to be successful, instead of turning "playing the victim" into a competitive national sport.

[Killboy]

Prizam said:

Fine, bung it in investments then. Probably about as risky as renting. The average over the last 15 years is around 12% PA.

5 years to double your money, compound.
15 years is 499%, compound

My point still stands.

Nonsense.

[Killboy]

Prizam said:

Yes, that's a part of it.

Why does this country hate people who work to a position of affording additional properties? For 99% of people, it's not like it "just happens".

We should celebrate success and show others how to be successful, instead of turning "playing the victim" into a competitive national sport.

I wonder how many here "celebrating success" and wanting to "show others how to be successful" are the same people who use avocado toast and lattes as metrics for why young people cant afford property.

[Murph7355]

Killboy said:

All part of the invaluable service of helping people stay in rented houses forever.

Did you get evicted once? Or did your landlord run over your dog?

There is no black and white on these things, and cack handed govt will do nothing to address any of the bees in your bonnet.

There are bad landlords. There are bad tenants. And in the middle majority there are people with perfectly happy arrangements.

If the intent is to get people on the housing ladder, or to give them "cheaper" rent through council ownership, we need to build more houses. (Good luck doing that where rents are highest though. Guess why...).

[Killboy]

Murph7355 said:

Did you get evicted once? Or did your landlord run over your dog?

There is no black and white on these things, and cack handed govt will do nothing to address any of the bees in your bonnet.

There are bad landlords. There are bad tenants. And in the middle majority there are people with perfectly happy arrangements.

If the intent is to get people on the housing ladder, or to give them "cheaper" rent through council ownership, we need to build more houses. (Good luck doing that where rents are highest though. Guess why...).

Nope, nothing of the sort. I've had great landlords, and terrible ones. But if any of them tried to tell me how hard they suddenly had it when they bought the place on an interest only BTL scheme recently and are sad they are not able to kick their feet up and retire because of their excellent business acumen I may just have to bust out the tiny violin.

[Prizam]

Killboy said:

Prizam said:

Yes, that's a part of it.

Why does this country hate people who work to a position of affording additional properties? For 99% of people, it's not like it "just happens".

We should celebrate success and show others how to be successful, instead of turning "playing the victim" into a competitive national sport.

I wonder how many here "celebrating success" and wanting to "show others how to be successful" are the same people who use avocado toast and lattes as metrics for why young people cant afford property.

Avocado toast is a stupid metric, and anyone with an iota of common sense can see that.

But the sentiment is on point. Too many people with the inability to either plan or have the discipline to experience delayed gratification, decide instead to get a victim complex because they can't have the newest shiny thing. Be that Avocado toast, an iPhone, a Rented car or a rented house.

[Killboy]

Prizam said:

Avocado toast is a stupid metric, and anyone with an iota of common sense can see that.

But the sentiment is on point. Too many people with the inability to either plan or have the discipline to experience delayed gratification, decide instead to get a victim complex because they can't have the newest shiny thing. Be that Avocado toast, an iPhone, a Rented car or a rented house.

Thought so.

Can we add "profitable" rental houses to the list too?

[98elise]

markh1973 said:

Prizam said:

Killboy said:

I like how everyone uses the rental income vs costs to show the unattractiveness of being a landlord, but don't seem to factor in the property price growth of the last 10/20 years.

That if you want to capitalise on it, you must pay capital gains tax. Go and look up a calculator to see how eye-watering it is.

You said 10/20 years, so let's go with 15 years of compound interest in a bank at 5%. (I have more than this on my savings)


In 15 years you would have 111.37% return.
It would take 13 Years, 11 months to double the value.

Arguably though, if you are a higher rate tax payer, capital TAX gains and a good accountant could be cheaper. But it only takes 1 person to trash the house or play silly buggers in not paying rent for a couple of years to well and truly wipe all of this out.

But you wouldn't have got 5% interest on yoru savings for large chunks of the last 15 years.

An investment that with a similar risk would be managed funds. Personally I have both over a similar length of time.

If you take something as popular as Fundsmith (which I hold) and look at the growth over 10 years its great. Add to that you can hold them in tax free wrappers, and they are easy to liquidate. I don't remember the last time I paid any capital gains on shares.

There's no way I would invest in property over funds/shares these days, unless you could buy the property at a substantial discount, or a great yield. You can get 6% just from Lloyds Bank stock, plus any capital gains.

It seems odd that those who think property is a great investment don't seem to be investing in themselves.