Alternative to BTL. I've had enough

[Darranu]

Morning all,

I'm sure this has been asked before for various reasons but what other investments are there that give >7% return?

A bit of background information on my situation:-
I've been a landlord for 15 years starting when I was 26, over that time I've saved up deposits and bought when I could afford another property, I now have 4 houses and a shop which includes a separate flat.

For the most part I've been happy, always had a good professional relationship with tenants and prided myself with the fact that I carry out repairs that are reported within a few days were possible.

Financially, due in part to the low interest rates they've gave a great ROI, the average LTV is around 50% and all are on repayment. It's long term plan for the future.

Now the reason for the question.
Of late I seem to be dealing with more and more tenants who just want to play the system, not with rent arrears but just in general. Staying for 2 years leaving a fully refurbished house looking extremely tired then claiming normal wear and tear when deposit time comes etc.

The final straw was returning from holiday last night to find a letter from the council informing me that they've received a complaint from a tenant that parts of the flat were in disrepair, it's a lovely flay and far from in disrepair.

I've never received a complain from the tenants and when we last spoke 2 months ago whilst I was fitting new carpets for them (at my expense) everything was fine and they were grateful for the new carpets.

I spoke to them last night and they said they'd made the complaint as a way of getting further up the waiting list for a council house, oh deep joy.

They would be all paid off by the time I'm 52 and if I'm honest I was looking forward to enjoying the benefits that would bring but I don't know if I can be arsed with this for another 11 years, life's to short as they say.

So back to the original question and apologies for the long post but what are the thoughts of PH, surely there's a better alternative but I just can't think what it is?

Thanks in advance,
Darran

[Darranu]

greygoose said:

Shell shares yield about that at the moment, whether that can continue with current oil prices is debatable.

There's a few that pay good dividends at the moment isn't there and it's something I'm giving serious thought too.
My problem is if I cash in now that's it just div reinvestment and any share growth / loss.

With BTL due to the 50% leverage and low interest rate's it's still a great overall ROI and I know that in 11 years I'll have X and roughly X per month
Ultimately someones paying my mortgage off for me.

Also I have a few shares and worried about sticking all my eggs in the same basket.

Thanks for the reply
Darran

[Darranu]

DSLiverpool said:

Darranu said:

Now the reason for the question.
Of late I seem to be dealing with more and more tenants who just want to play the system, not with rent arrears but just in general.

Your a good man and people are doing to you what you wouldn't dream of doing to others, you have a great plan for being 52 less so for being 41 ! as such stretch the end game a few years and get them fully managed - have no contact with your tenants at. Possibly keep one house back to managed yourself if you want to keep your hand in.

Thank you,
That's not a bad idea actually, I sort of feel like they've won if I sell up.

I've always looked at agents as been a layer of people between me and the tenant that can cause things not to get actioned as quickly as I'd like, be that chasing rent or facilitating repairs.
It could be that that's exactly what I need as it would insulate me from it all slightly and if things aren't quite as efficient then so be it.

Cheers,
Darran

[Darranu]

Thanks Tony, good advice indeed.

[Darranu]

sidicks said:

The OP's comment are a prime example of the risks involved in BTL, particular where the desire is for income rather than overall return

Just to clarify I don't desire income from my investment at present, that's why there all on repayment.
Any profit left over get's invested in shares each year as a way of spreading the risk.
I live solely from my income from my day job, BTL is just a plan B if my pension doesn't turn out to be as good as forecast.

Regards,
Darran

[Darranu]

thebraketester said:

Do you rent them out privately or through and agent?

An agent might be a good idea as they deal with all the bulllst. Ok, it's gonna dent your initial return but should free you uo from the faff

Hi,

I manage them and carry out all the repair myself with the exception of gas, all boilers are on a British Gas maintenance contract which allows the tenant to call them direct with any issue's.

I've always avoided agents as we all know that any repairs incur their cut on top, as I do the repairs myself it seems like I'd be paying the 8% + vat and the end result would be the same, me popping down to fix.

If I wasn't so handy this wouldn't be an issue but I really don't like the idea of an agent charging me x plus their cut to fix a blocked drain for example when I know I could just do it myself instead.

That said I think it's the maintenance that's starting to drag me down a bit so maybe worth thinking about just stepping back a little.

[Darranu]

Jockman said:

You have a conventional pension and a commercial shop. Any thoughts on combining the two?

I appreciate this will increase your exposure to property for a short period but it may allow you to take advantage of a possible dip in values at an opportune time.

Hi,
I really don't know anything about pensions which isn't ideal.
I'm fortunate as I have 3 pensions, BAE, Bombardier and Railway and all of them are final salary so I'm not sure if they're that flexible.

I'm sure there's more tax efficient ways of owning the shop though as you say.

Thanks
D

[Darranu]

sidicks said:

Isn't there a way you can get an agent to take away most of the admin with the tenants, which still allowing you to get involved in the maintenance (if you chose to do so), thus saving you money?

Edited by sidicks on Sunday 28th August 10:00

Yes definitely, my only concern is that if I pop down to carry out repairs I then have that physical contact with the tenant and I loose that layer of separation.

I think full management is the way forward and just take a step back and leave it alone.

On a side note, I've just been down to the flat and surprise surprise there's nothing wrong at all.
They'd just put the complaint in to the council as a way a painting a picture of squalor in the hope of been elevated up the council house waiting list.

I'm tempted to just issue them with a S21 but think that would just play into their hands s a few days of careful reflection is in order.

[Darranu]

Guys,

Thank you for some genuine good advise, I rarely post on the forum but browse a lot.

From time to time I see threads degenerate into mindless tit for tat bickering / trolling. This on the other hand has helped me greatly in gaining some perspective.

I e-mailed the lady at the council dealing with the complaint yesterday detailing the situation and suggesting that we conduct a joint inspection with a view to resolving the matter, I'll call her tomorrow also but wanted the paper trail of an e-mail so that it couldn't be disputed that I'd tried to resolve things within the 14 days.

Regarding the tenants..... Whilst there yesterday I pointed out that I'd never reviewed the rent as they don't cause me too much hassle, in their quest to get higher up the Council housing waiting list this has now changed so it's rent review time. Hopefully they'll just leave after this.

If I issue a S21 and start eviction proceedings that will just play into their hands as that will genuinely increase their priority and the council may even suggest that they stop paying the rent as way of been evicted quicker thus reaching their end goal in a shorter period of time, this happened to me in the past, you couldn't make it up really could you.

When I've sat and thought about it, this is the only property that gives me grief, possibly as it's the cheapest to rent and is at the lower end of the market, although it does give the greatest yield.
I'm going to stick it on full management with a friends letting agency and stay on the sofa, as someone pointed out if I sell now I'm sure to regret it in the future.

Thanks again for taking the time to reply, you're all a credit to PH and gave me a much needed reality check

Cheers
Darran

[Darranu]

Hoofy said:

Could you work with the tenant to help them to play the system? At least they will leave without trashing your place (windows, doors, walls kicked through).

No, their not that bright and if I'm honest I can't be bothered to converse with them.
Rent review in a weeks time, if the next month's rents late then S21.

Next tenants will be on full managed via agent.

Cheers
D

[Darranu]

audidoody said:

You can only issue a S21 once the tenancy agreement is up. You can only issue a S8 if they are in breach of the TA. Late rent is not a reason. They have to be in arrears for a full month before you can even start a S8. You'll need professional help to do this as one wrong word or comma and the S8 is invalid.

Their on a periodic tenancy, S8 requires 2 months arrears if they pay monthly if I remember correctly.

[Darranu]

I'm going down the S21 route so not an issue
Either way I'm very organised with book keeping and paper trail's.

Been here before so not concerned or daunted by the legal aspect

Regards
Darran