Is a BTL a good option for the next 5-10 years?
Discussion
Came across this forum from a google search and found the discussion to be a lot better than other forums I post on, so I am looking for some discussion, challenge or help on my current thoughts. My starting point for the next 5 - 10 years is that central banks are unable to raise rates to levels that would be appropriate given the amount of debt that governments have taken on. Hence real rates, whilst they may increase, will remain firmly negative for the forseeable future. I assume its far easier for governments to let inflation run slightly hot and inflate away their debts rather than taking the politically unpopular route of tax increases and austerity in an attempt to pay it down. If this is true, I think (and I say that because Im really not sure it is) the best strategy is to lever up and take on as much debt as possible? Im considering taking ~£40k and securing a BTL property. I could perhaps go up to double this.
Personally, I'm late twenties and already have a few hundred k in crypto but that's the limit of my investments. I'm happy with maintaining that exposure for the same reasons as above, but I'm looking at complimentary investments. Stocks seem like a poor idea - they average 10%/yr but are at unreasonable valuations; Not saying there is going to be a crash as I think equities will continue to increase as scarce assets so long as QE continues. However, I could get that 10% in the crypto world quite easily as 'interest' but (1) I could only get that on deposit capital and wouldn't be able to use leverage, and (2) the capital might be earning 10%/yr in interest but is also exposed to the loss of purchasing power which reduces the gain, whereas a mortgage is exposed to the same factors in reverse.
Some problems with the numbers in that I am an expat, which limits my ability to secure the more competitive rates. It also means that I'd be liable for tax on rental income (and CGT) from UK property whereas a more straightforward investment would probably be comparatively tax free. Still, as I only have a small UK based income I'd not exceed basic tax and some rental income may even fall within my allowance. A cursory search suggests I could get a 75% LTV @ 4% which would give a £40k deposit/£120k mortgage, repayment of £650/mo and a rental value of ~£13-1500/mo. Clearly out of that there would be letting agent fees and a whole host of other costs that would reduce the profitability, but it seems on the surface it would certainly be a profitable let. However, the real idea here isn't the let itself its the real terms depreciation of borrowing capital on a 5-10 year fix.
Comparing £40k at 10% compounded for 7 years (for equities or cash) gives an almost £38k profit - but the whole amount would have lost purchasing power over those years which would reduce this whole amount in real terms. Comparatively, £120k mortgage depreciating in value at 3% per annum (£24k - but think this is a very incorrect way to think about this as the outstanding debt is also reducing over time) plus a small profit assumption of £200/mo (£17k over 7 years) plus capital that has been paid off the mortgage (maybe another £10-20k, but there is some double counting here with the depreciation I assume) plus (potentially) capital appreciation @ 4%/yr minus CGT @ 20% (£40k) seems vastly superior.
Very interested in comments and criticisms of any or all of this. I'm completely new to this and just trying to make some informed decisions.
Personally, I'm late twenties and already have a few hundred k in crypto but that's the limit of my investments. I'm happy with maintaining that exposure for the same reasons as above, but I'm looking at complimentary investments. Stocks seem like a poor idea - they average 10%/yr but are at unreasonable valuations; Not saying there is going to be a crash as I think equities will continue to increase as scarce assets so long as QE continues. However, I could get that 10% in the crypto world quite easily as 'interest' but (1) I could only get that on deposit capital and wouldn't be able to use leverage, and (2) the capital might be earning 10%/yr in interest but is also exposed to the loss of purchasing power which reduces the gain, whereas a mortgage is exposed to the same factors in reverse.
Some problems with the numbers in that I am an expat, which limits my ability to secure the more competitive rates. It also means that I'd be liable for tax on rental income (and CGT) from UK property whereas a more straightforward investment would probably be comparatively tax free. Still, as I only have a small UK based income I'd not exceed basic tax and some rental income may even fall within my allowance. A cursory search suggests I could get a 75% LTV @ 4% which would give a £40k deposit/£120k mortgage, repayment of £650/mo and a rental value of ~£13-1500/mo. Clearly out of that there would be letting agent fees and a whole host of other costs that would reduce the profitability, but it seems on the surface it would certainly be a profitable let. However, the real idea here isn't the let itself its the real terms depreciation of borrowing capital on a 5-10 year fix.
Comparing £40k at 10% compounded for 7 years (for equities or cash) gives an almost £38k profit - but the whole amount would have lost purchasing power over those years which would reduce this whole amount in real terms. Comparatively, £120k mortgage depreciating in value at 3% per annum (£24k - but think this is a very incorrect way to think about this as the outstanding debt is also reducing over time) plus a small profit assumption of £200/mo (£17k over 7 years) plus capital that has been paid off the mortgage (maybe another £10-20k, but there is some double counting here with the depreciation I assume) plus (potentially) capital appreciation @ 4%/yr minus CGT @ 20% (£40k) seems vastly superior.
Very interested in comments and criticisms of any or all of this. I'm completely new to this and just trying to make some informed decisions.
Well you can have my 10p's worth - so you have £40k to invest which you could put into a B2L - let's say that gives you a house of circa £155k value allowing for stamp duty (minimal at these levels) and other costs
I personally think you would be doing very well to get £1,500pm from a £155k house, but I only know the area I live in, if you could get £1,500 a month or close to it then that's a gross return of 11.6%, happy days.
If you can get even close to that, then I would buy the house - personally I think you are more likely to find your £150k (ish) house rents for £650/£750pm which gives circa 5%. At those kind of levels it should just about wipe its nose as an investment, but really you are playing a long perm bet on property going up in value, which may be right in general, but if you buy in the wrong area it the property market takes a battering (if rates go up in 22) then it can take many years to recover.
The other thing to bear in mind is that if S.21 of the Housing Act 88 is removed (as we have been told it will) then gaining possession of your property when you come to sell it will not be as easy as it used to be. As I get older, I prefer the option of simply selling funds/shares instantly rather than it taking months to sell a property once you get possession of it.
No right answer and I think all depends on what property you can find and how much it rents for.
I personally think you would be doing very well to get £1,500pm from a £155k house, but I only know the area I live in, if you could get £1,500 a month or close to it then that's a gross return of 11.6%, happy days.
If you can get even close to that, then I would buy the house - personally I think you are more likely to find your £150k (ish) house rents for £650/£750pm which gives circa 5%. At those kind of levels it should just about wipe its nose as an investment, but really you are playing a long perm bet on property going up in value, which may be right in general, but if you buy in the wrong area it the property market takes a battering (if rates go up in 22) then it can take many years to recover.
The other thing to bear in mind is that if S.21 of the Housing Act 88 is removed (as we have been told it will) then gaining possession of your property when you come to sell it will not be as easy as it used to be. As I get older, I prefer the option of simply selling funds/shares instantly rather than it taking months to sell a property once you get possession of it.
No right answer and I think all depends on what property you can find and how much it rents for.
In most non-slumlord instances, I think you can expect a higher yield from equities than property, looking at S&P500 and similar histories.
What makes BTL look compelling is the use of leverage. You can also apply leverage to equities if you like. In both assets, the leverage can cut both ways..
Management costs, empty periods, maintenance, illiquidity, selling costs all out me off, to be honest.
I still fancy one but it’ll be a small part of my portfolio.
What makes BTL look compelling is the use of leverage. You can also apply leverage to equities if you like. In both assets, the leverage can cut both ways..
Management costs, empty periods, maintenance, illiquidity, selling costs all out me off, to be honest.
I still fancy one but it’ll be a small part of my portfolio.
My view is very much that it isn’t worth the hassle of buying one or two as a personal investment as the tax and regulatory regime is deeply unattractive if you do it this way. Instead it needs a bit more focus on buying more into Ltd company structures (which is what I’ve been doing over the past couple of years and am continuing to do as a long term play to deliver income and hedge against inflation).
If you can get £1300-1600/mth off a £160k property then you will be doing much much better than my local market can deliver…
Voids, illiquidity, running costs don’t bother me in the slightest as the numbers still work (especially given recent house price increases, although I don’t really factor those in save for the effect they have on rent). BUT I didn’t buy any until I knew I could easily absorb 6 months loss of rent and a full refurb if it came to it, nor would I look at it with a 5 year investment horizon.
Fwiw, I don’t see the interest rate issue as focussed on government debt but rather the significant impact a return to higher rates would have on the general populace and the economy. As I’ve been say for some time, I think a low interest rate/higher inflation environment is going to be with us for a while.
ETA: it isn’t my largest asset class but my property holdings are an order of magnitude greater than my listed equities. The situation might well be different were I younger and able to get everything into tax efficient wrappers, in which case there would be much to be said for following some of the advice that others will doubtless give around investing in funds via ISAs, pensions etc and saving the costs/hassle.
If you can get £1300-1600/mth off a £160k property then you will be doing much much better than my local market can deliver…
Voids, illiquidity, running costs don’t bother me in the slightest as the numbers still work (especially given recent house price increases, although I don’t really factor those in save for the effect they have on rent). BUT I didn’t buy any until I knew I could easily absorb 6 months loss of rent and a full refurb if it came to it, nor would I look at it with a 5 year investment horizon.
Fwiw, I don’t see the interest rate issue as focussed on government debt but rather the significant impact a return to higher rates would have on the general populace and the economy. As I’ve been say for some time, I think a low interest rate/higher inflation environment is going to be with us for a while.
ETA: it isn’t my largest asset class but my property holdings are an order of magnitude greater than my listed equities. The situation might well be different were I younger and able to get everything into tax efficient wrappers, in which case there would be much to be said for following some of the advice that others will doubtless give around investing in funds via ISAs, pensions etc and saving the costs/hassle.
Edited by LooneyTunes on Sunday 19th December 22:28
I'll echo Kickstart's comment about the rental income: it sounds high to me, but very good if you can get it.
Otherwise, I think you're on the right track, especially given that you won't be hammered too much by tax.
I'm sure that you would have considered that they aren't a quick asset to dispose of.
Otherwise, I think you're on the right track, especially given that you won't be hammered too much by tax.
I'm sure that you would have considered that they aren't a quick asset to dispose of.
Gatsby88 said:
...
Very interested in comments and criticisms of any or all of this. I'm completely new to this and just trying to make some informed decisions.
So you think your gross rental yield is going to be over 10%?Very interested in comments and criticisms of any or all of this. I'm completely new to this and just trying to make some informed decisions.
It's possible, but only in certain parts of the letting market. There is a sliding scale of typical yields for BTL which range from 4% to maybe 10%. As you move to get higher yields though, you tend to find you get more problems. Those problems can be managed, but they take some time and they are a lot easier with experience.
Personally, I wouldn't bother, unless you are on hand here in the UK to deal with the issues, you think you would enjoy learning to be a landlord, and you plan to expand to have more than just a single unit.
It sounds like you have done extremely well in crypto, so I can understand why you think you have a winning formula which you don't want to change. But my view, crypto is very exposed to changes in government regulation. It would be easy to imagine the US or UK government for example to legislate a annual holding tax on crypto or an additional transaction charge levied when it is spent, if they thought crypto was going to challenge their authority to control money policy or levy taxes. Which is why I think you would be wise to diversify and perhaps move some of this money to invest instead in something more boring like a global shares index tracker.
It's a good way of diversifying IME but don't expect a very high net yield and consider the hassle/time to dedicate to BTL.
For me taxation is the killer with BTL, both on income and CGT. Particularly compared to the generosity of HMRC in terms of pension tax relief as you still have UK income.
For me taxation is the killer with BTL, both on income and CGT. Particularly compared to the generosity of HMRC in terms of pension tax relief as you still have UK income.
Find the country and area you want to buy in. Then decide what you want to buy. Then find a good letting agent who can show a track record of success with what and where you're thinking of buying. Then have a sit down with them and ask them all your questions.
Biggest "risk" in UK just now is political - more specifically the inevitability of socialism.
Worldwide, socialists are all currently bleating about the same things - principally higher taxes, greater equality and green development. This could involve wealth/land taxes and general reduction of wealth to bring the rich closer to the poor (what mental cases do to increase equality). The green stuff will inevitably involve large scale expenditure on adaptations to properties.
It is, of course, all b
ks. But it's damaging bks and it affects certain peoples appetite for property investment.
However, if you think there's sense in "sufficient unto the day is the evil thereof", go for it. If you do it and hate it then unless you're an idiot you should be able to get back out of it without much loss.
Now read the first paragraph again.
Biggest "risk" in UK just now is political - more specifically the inevitability of socialism.
Worldwide, socialists are all currently bleating about the same things - principally higher taxes, greater equality and green development. This could involve wealth/land taxes and general reduction of wealth to bring the rich closer to the poor (what mental cases do to increase equality). The green stuff will inevitably involve large scale expenditure on adaptations to properties.
It is, of course, all b
ks. But it's damaging bks and it affects certain peoples appetite for property investment. However, if you think there's sense in "sufficient unto the day is the evil thereof", go for it. If you do it and hate it then unless you're an idiot you should be able to get back out of it without much loss.
Now read the first paragraph again.
I've been tempted to do this too, particularly as I recently learned (on here i think) that most BTL are purchased with interest only mortgage and minimal deposit.
A friend of mine does this and a few years back was telling me if he had 50k he'd buy 10. I'm not sure how realistic that is these days, though it was probably only four or so years ago. His own house is IO.
The other end of the scale, I see lots of 1-1.5m houses around by me all of a sudden, popping up, and again, that level tends to be IO mortgages from what I can gather.
On the regulatory side of things, i see the Welsh (am in Wales) government saying they are going to do more to help younger people buy locally (good i think) and will be clamping down on second/multiple home ownership. Thats a big risk I think, but depends on which part of the UK you live in.
So IO mortgages rely on property prices staying level to clear it, or going up to make a profit. The interest is a constant level throughout, so a fixed cost, but on 150k IO mortgage over 20 years thats a pretty big chunk of change just on the interest isn't it.
Guess where i'm as is this - go in big via a LTD and do it like a business, or if its for 1 BTL I wouldn't bother and just max out pension first. I've managed to get confirmation with my biggest pension pot that they'll honour age 55 access so that's where i'll be.
A friend of mine does this and a few years back was telling me if he had 50k he'd buy 10. I'm not sure how realistic that is these days, though it was probably only four or so years ago. His own house is IO.
The other end of the scale, I see lots of 1-1.5m houses around by me all of a sudden, popping up, and again, that level tends to be IO mortgages from what I can gather.
On the regulatory side of things, i see the Welsh (am in Wales) government saying they are going to do more to help younger people buy locally (good i think) and will be clamping down on second/multiple home ownership. Thats a big risk I think, but depends on which part of the UK you live in.
So IO mortgages rely on property prices staying level to clear it, or going up to make a profit. The interest is a constant level throughout, so a fixed cost, but on 150k IO mortgage over 20 years thats a pretty big chunk of change just on the interest isn't it.
Guess where i'm as is this - go in big via a LTD and do it like a business, or if its for 1 BTL I wouldn't bother and just max out pension first. I've managed to get confirmation with my biggest pension pot that they'll honour age 55 access so that's where i'll be.
You won’t get £1300 per month on a £150k property.
Dependant on area it’ll be most likely £625 - £675 per month.
You must be comfortable with risk as you invest in crypto. I would suggest some property might be a good way to balance your investment portfolio.
As an expat you would probably want to employ a managing agent to manage your property, allow 10% plus vat.
There are numerous ongoing costs for landlords, treat it as a business rather than easy money, some years are better than others. 4% - 6% would be our return after costs.
Dependant on area it’ll be most likely £625 - £675 per month.
You must be comfortable with risk as you invest in crypto. I would suggest some property might be a good way to balance your investment portfolio.
As an expat you would probably want to employ a managing agent to manage your property, allow 10% plus vat.
There are numerous ongoing costs for landlords, treat it as a business rather than easy money, some years are better than others. 4% - 6% would be our return after costs.
Many thanks for all the comments, it has given me plenty to consider.
The mortgage option I looked at was 4% which gave a mortgage figure of £650/mo. I havent engaged a broker yet and hopefully that can be lowered a little, but I wouldn't engage with this if the gross rent only just covered the mortgage.
I'm certainly looking to go beyond a single property, but I thought it best to try to walk before running!
On the tax issue, I only have a small amount of UK income nowadays so its highly unlikely that I'd exceed the 20% tax bracket even with 3-4 BTLs so its only an extra 1%. I know there are some cost efficiencies with LTD companies as well, but this seems like something that I should be aware of and perhaps look to streamline over time but isn't necessarily critical to the overall strategy.
Unfortunately, as I'm not tax resident in the UK, I can no longer use ISA's and such.
On the crypto issue; I dont really want to derail this thread (I'll eventually move to posting in the crypto threads here as they seem better than normal retail stuff) but I think we are way past the point of Bitcoin being banned. Regulations are actually pretty clear on things like BTC/ETH, Miami and NYC mayors are positioning their cities as being crypto centres and plenty of law makers have admitted owning and are advocating on behalf of crypto. Not to mention that crypto companies in the US are one of the US' only real growth industries right now. Lastly, if SHTF, I'm lucky enough to have a job where securing a visa and moving to most countries in the world is very doable and on that note Singapore, the ME and a whole host of EE countries have been very positive towards crypto - I could happily secure a job and live in any of them.
Thanks for the point about the letting agent. Hadn't thought of that (I think most of them are incompetent freeloaders) but I might contact a few of them for some initial enquiries.
Kickstart said:
I personally think you would be doing very well to get £1,500pm from a £155k house, but I only know the area I live in, if you could get £1,500 a month or close to it then that's a gross return of 11.6%, happy days. If you can get even close to that, then I would buy the house - personally I think you are more likely to find your £150k (ish) house rents for £650/£750pm which gives circa 5%.
A few other people mentioned this. The property Im basing my numbers on is a student let, 3 bedroom in a large student city. Its currently tenanted and is receiving this amount of rent. I would be sceptical of this but its on the same road where an ex-girlfriend used to live at university so I know the rental amount quoted is broadly correct. There are 4 and 5 bedroom options available too generating 8-10% gross yield as a guide. Student lets tend to have higher yields from what I can see and solve the s21 problem mentioned as well, although obviously HMO stuff adds a layer of complexity. My alternative is a 2 bed city centre apartment which can either rent out as an AST or via AirBnB, with the AST option generating 6.5% gross yield from the numbers I've looked at. However, I really just want absolutely nothing to do with apartments at all given the leasehold nature, service charge, cladding and other nonsense.The mortgage option I looked at was 4% which gave a mortgage figure of £650/mo. I havent engaged a broker yet and hopefully that can be lowered a little, but I wouldn't engage with this if the gross rent only just covered the mortgage.
Kickstart said:
At those kind of levels it should just about wipe its nose as an investment, but really you are playing a long perm bet on property going up in value, which may be right in general, but if you buy in the wrong area it the property market takes a battering (if rates go up in 22) then it can take many years to recover.
Not just betting on the property increasing in value (although I think that's a fair assumption in the current environment). I'm really betting on QE continuing, inflation running higher than has traditionally been seen and therefore eroding away the value of the debt over time. Governments and the private sector are indebted to ridiculous levels so I don't think its too outlandish to assume there will be a favourable environment for debt over the next decade. If I can make this work, I'd look to take on more than a single property in time because, in the grand scheme of things, $120k of debt isnt that much overall.Royal Jelly said:
What makes BTL look compelling is the use of leverage. You can also apply leverage to equities if you like. In both assets, the leverage can cut both ways..
Absolutely. But, crucially, a BTL is leverage where you basically can't get liquidated and runs at super low interest rates which something like margin trading wouldn't offer. Are there any instruments in equities where you can get hundred of thousands of pounds worth of debt for 3% for a decade? I don't know of any but would be very interested to hear about ideas.LooneyTunes said:
My view is very much that it isn’t worth the hassle of buying one or two as a personal investment as the tax and regulatory regime is deeply unattractive if you do it this way. Instead it needs a bit more focus on buying more into Ltd company structures (which is what I’ve been doing over the past couple of years and am continuing to do as a long term play to deliver income and hedge against inflation).
I agree. However, I'm a bit lost as to how you start this chain off since when I looked most banks want a LTD company to have been trading for some time and to have some turnover prior to lending. I don't know how you start a LTD company up to secure BTL properties without buying the first property outright in cash? Is that possible (as a first time LL as well)?I'm certainly looking to go beyond a single property, but I thought it best to try to walk before running!
On the tax issue, I only have a small amount of UK income nowadays so its highly unlikely that I'd exceed the 20% tax bracket even with 3-4 BTLs so its only an extra 1%. I know there are some cost efficiencies with LTD companies as well, but this seems like something that I should be aware of and perhaps look to streamline over time but isn't necessarily critical to the overall strategy.LooneyTunes said:
BUT I didn’t buy any until I knew I could easily absorb 6 months loss of rent and a full refurb if it came to it, nor would I look at it with a 5 year investment horizon.
Fwiw, I don’t see the interest rate issue as focussed on government debt but rather the significant impact a return to higher rates would have on the general populace and the economy. As I’ve been say for some time, I think a low interest rate/higher inflation environment is going to be with us for a while.
ETA: it isn’t my largest asset class but my property holdings are an order of magnitude greater than my listed equities. The situation might well be different were I younger and able to get everything into tax efficient wrappers, in which case there would be much to be said for following some of the advice that others will doubtless give around investing in funds via ISAs, pensions etc and saving the costs/hassle.
Luckily, I'm quite cash flow positive at the moment and could easily cover the mortgage with my disposable income. Yes, I agree with that as well - there are clearly multiple incentives to maintain the current environment and I agree this is the status quo for the next decade. Its reassuring to hear that you believe the same and are investing in a similar way.Fwiw, I don’t see the interest rate issue as focussed on government debt but rather the significant impact a return to higher rates would have on the general populace and the economy. As I’ve been say for some time, I think a low interest rate/higher inflation environment is going to be with us for a while.
ETA: it isn’t my largest asset class but my property holdings are an order of magnitude greater than my listed equities. The situation might well be different were I younger and able to get everything into tax efficient wrappers, in which case there would be much to be said for following some of the advice that others will doubtless give around investing in funds via ISAs, pensions etc and saving the costs/hassle.
Unfortunately, as I'm not tax resident in the UK, I can no longer use ISA's and such.
EddieSteadyGo said:
Personally, I wouldn't bother, unless you are on hand here in the UK to deal with the issues, you think you would enjoy learning to be a landlord, and you plan to expand to have more than just a single unit.
It sounds like you have done extremely well in crypto, so I can understand why you think you have a winning formula which you don't want to change. But my view, crypto is very exposed to changes in government regulation. It would be easy to imagine the US or UK government for example to legislate a annual holding tax on crypto or an additional transaction charge levied when it is spent, if they thought crypto was going to challenge their authority to control money policy or levy taxes. Which is why I think you would be wise to diversify and perhaps move some of this money to invest instead in something more boring like a global shares index tracker.
Definitely planning to expand beyond a single property *if* I can make this work. I have enough free cash flow whereby I could probably add 1 every 12 months (on the assumption that the properties produce no net income and only pay for themselves).It sounds like you have done extremely well in crypto, so I can understand why you think you have a winning formula which you don't want to change. But my view, crypto is very exposed to changes in government regulation. It would be easy to imagine the US or UK government for example to legislate a annual holding tax on crypto or an additional transaction charge levied when it is spent, if they thought crypto was going to challenge their authority to control money policy or levy taxes. Which is why I think you would be wise to diversify and perhaps move some of this money to invest instead in something more boring like a global shares index tracker.
On the crypto issue; I dont really want to derail this thread (I'll eventually move to posting in the crypto threads here as they seem better than normal retail stuff) but I think we are way past the point of Bitcoin being banned. Regulations are actually pretty clear on things like BTC/ETH, Miami and NYC mayors are positioning their cities as being crypto centres and plenty of law makers have admitted owning and are advocating on behalf of crypto. Not to mention that crypto companies in the US are one of the US' only real growth industries right now. Lastly, if SHTF, I'm lucky enough to have a job where securing a visa and moving to most countries in the world is very doable and on that note Singapore, the ME and a whole host of EE countries have been very positive towards crypto - I could happily secure a job and live in any of them.
nickfrog said:
It's a good way of diversifying IME but don't expect a very high net yield and consider the hassle/time to dedicate to BTL.
For me taxation is the killer with BTL, both on income and CGT. Particularly compared to the generosity of HMRC in terms of pension tax relief as you still have UK income.
I only have some odd consulting jobs in the UK nowadays and in a good year I net about £10k from those. I do expect that to increase over the next 5 years, but its not going to put me so far in to the BR tax bracket to mean pension relief becomes a meaningful thing really. For me taxation is the killer with BTL, both on income and CGT. Particularly compared to the generosity of HMRC in terms of pension tax relief as you still have UK income.
Groat said:
Find the country and area you want to buy in. Then decide what you want to buy. Then find a good letting agent who can show a track record of success with what and where you're thinking of buying. Then have a sit down with them and ask them all your questions.
Biggest "risk" in UK just now is political - more specifically the inevitability of socialism.
Worldwide, socialists are all currently bleating about the same things - principally higher taxes, greater equality and green development. This could involve wealth/land taxes and general reduction of wealth to bring the rich closer to the poor (what mental cases do to increase equality). The green stuff will inevitably involve large scale expenditure on adaptations to properties.
It is, of course, all bks. But it's damaging bks and it affects certain peoples appetite for property investment.
However, if you think there's sense in "sufficient unto the day is the evil thereof", go for it. If you do it and hate it then unless you're an idiot you should be able to get back out of it without much loss.
Now read the first paragraph again.
I broadly agree with the sentiment, although I'm not sure I'd agree that its inevitable. Its pretty hard to justify land and/or wealth taxes, plus our politicians (even most of the labour ones) are basically the elite; so them voting in such proposals would be the proverbial turkeys voting for christmas. Higher taxes may very well be coming down the road though and unfortunately working as an expat wouldn't exempt me from UK property taxes so it is something to bear in mind.Biggest "risk" in UK just now is political - more specifically the inevitability of socialism.
Worldwide, socialists are all currently bleating about the same things - principally higher taxes, greater equality and green development. This could involve wealth/land taxes and general reduction of wealth to bring the rich closer to the poor (what mental cases do to increase equality). The green stuff will inevitably involve large scale expenditure on adaptations to properties.
It is, of course, all b
ks. But it's damaging bks and it affects certain peoples appetite for property investment. However, if you think there's sense in "sufficient unto the day is the evil thereof", go for it. If you do it and hate it then unless you're an idiot you should be able to get back out of it without much loss.
Now read the first paragraph again.
Thanks for the point about the letting agent. Hadn't thought of that (I think most of them are incompetent freeloaders) but I might contact a few of them for some initial enquiries.
Gatsby88 said:
Thanks for the point about the letting agent. Hadn't thought of that (I think most of them are incompetent freeloaders) but I might contact a few of them for some initial enquiries.
Can't see how you're going to manage the operation of a UK letting concern from abroad without professional letting management or any personal experience of the business. Or how you're going to be comfortable with it if your opinion of the managers is that they're 'incompetent freeloaders'.
Groat said:
Can't see how you're going to manage the operation of a UK letting concern from abroad without professional letting management or any personal experience of the business.
Or how you're going to be comfortable with it if your opinion of the managers is that they're 'incompetent freeloaders'.
As a landlord with a single 2bed property, and not even a student let I can totally agree with this. We self manage our as it’s our old house, and we live 5mins away…. It still drains some time and resources but you don’t know what/how much or when. We go months without any issue or contact, and then within the space of 3 weeks I’ve had to visit multiple times for various issues. Or how you're going to be comfortable with it if your opinion of the managers is that they're 'incompetent freeloaders'.
If going towards student let then do factor in slightly higher refurb frequency, plus many places offer half rent for summer months when the students often go home for a few weeks.
For general info, we’re making around 5-8% return after income tax, but recent CGT changes mean that’ll technically drop down a bit if we factor that in.
All said, if you have a large crypto portfolio, large shares and pension sorted then a BTL isn’t a bad move to diversify, just don’t underestimate the effort required to be a good landlord!
Groat said:
Can't see how you're going to manage the operation of a UK letting concern from abroad without professional letting management or any personal experience of the business.
Or how you're going to be comfortable with it if your opinion of the managers is that they're 'incompetent freeloaders'.
Ah, I think something was misunderstood here... The comment I was quoting was that I could contact a letting agent to discuss/confirm some of the finer details of the local market and/or things I may not have considered. I was never going to try and do this without a letting agent and I was aware of the general rate they charge before I made the original post.Or how you're going to be comfortable with it if your opinion of the managers is that they're 'incompetent freeloaders'.
That said though, as someone who has rented for my whole life, I wouldn't take back my comment about incompetence. I've been out of the UK since 2020 but when I left there was no requirement for a letting agent to have any qualifications or specific knowledge. I've had a letting agent fail to protect a deposit in a tenancy in 2017, which was 10 years after the legislation came in to force I believe. That's just unforgivable and I'm sure that LL was not best pleased at having appointed an agent that probably promoted themselves as being capable of doing the job correctly. I'm not arguing they are all bad; I'm willing to use one because there are obviously some very good ones and its perfectly fair to ask for 10-15% if they have the required knowledge and skills. But I would argue that, from my experience, the majority aren't particularly capable.
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