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UK diy (uk.d-i-y) For the discussion of all topics related to diy (do-it-yourself) in the UK. All levels of experience and proficency are welcome to join in to ask questions or offer solutions. |
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#1
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OT - Renting Out Property
Hi all
From posts to the group in the past, it is clear that a number of posters own property for rental. Is the market saturated after all the buy-to-let hype of recent years? Is it a worthwhile investment if starting now(ish). I am likely to be in a position to take on a property (finances permitting) this year and wonder if this would be a good move in the current climate. The property is 3 bed semi in decent area - I am guessing at purchase price of around £150k and rental £500 pcm possibly more. Only very tentative interest ATM - not sure I could live with the hassle! If my figures are right on the rental income, what costs should I expect to pay out of the £6000 pa income? Thanks Phil |
#2
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OT - Renting Out Property
On Mon, 6 Aug 2012 09:26:50 +0100, "TheScullster"
wrote: Hi all From posts to the group in the past, it is clear that a number of posters own property for rental. Is the market saturated after all the buy-to-let hype of recent years? Is it a worthwhile investment if starting now(ish). I am likely to be in a position to take on a property (finances permitting) this year and wonder if this would be a good move in the current climate. The property is 3 bed semi in decent area - I am guessing at purchase price of around £150k and rental £500 pcm possibly more. Only very tentative interest ATM - not sure I could live with the hassle! If my figures are right on the rental income, what costs should I expect to pay out of the £6000 pa income? I'm in the same position as you - in fact I'm off to look at a couple of properties this afternoon - but I'm increasingly less certain about it being a good way to go. In my case, it's a matter of trying to get a better return on cash investments. If I were you, I wouldn't assume that £500 pcm adds up to £6000 pa. Unless you are in an area where demand outstrips supply and where people stay put in one place for years at a time I would either subtract an amount for void periods or subtract an amount for using an agent or subtract an amount for using an agent yet still suffering from voids. Part of the arithmetic of buy to let used to be the increase in capital value of the property. Unless you live in one of the few areas where property prices are still increasing, you live in one of the many areas where they are not - and there are people I trust who say that we are many years away from bottoming out. I'm doing my calculations on the basis that £Xooo investment will produce £Yoo return year after year and even if the value of the asset falls, that's what I've committed to produce the income. It could be many years before I see an increase in value of my capital so I'm not counting it and if £Yoo expressed as a percentage return on investment is less than I could get somewhere safe then it's not worth the hassle to me. Round my way there are 50-60 grand properties that will rent out for 350-400 per month so the arithmetic looks a little better to start with. Other costs? Insurance Gas inspection and repairs Energy Performance Certificate or whatever they call it nowadays Running repairs - which will depend a lot on the property and your tenant You might also like to take a look at this: http://www.newham.gov.uk/News/2012/J... approved.htm ...and ask how long before all councils are doing it. Personally, I'm also looking into the advantages or otherwise of buying a bigger house for myself and taking in a lodger. And I'm looking very seriously at peer-to-peer lending as a way of getting a decent return. That's my opinion: YMMV. And naturally, being in the position I am right now, I'm very interested in other replies! Nick |
#3
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OT - Renting Out Property
"TheScullster" wrote in message
... Hi all From posts to the group in the past, it is clear that a number of posters own property for rental. Is the market saturated after all the buy-to-let hype of recent years? Is it a worthwhile investment if starting now(ish). I am likely to be in a position to take on a property (finances permitting) this year and wonder if this would be a good move in the current climate. The property is 3 bed semi in decent area - I am guessing at purchase price of around £150k and rental £500 pcm possibly more. Only very tentative interest ATM - not sure I could live with the hassle! If my figures are right on the rental income, what costs should I expect to pay out of the £6000 pa income? -------------------------------------------------------------------------------------------- My own experience of doing this when returns on a "normal" property were 12% is that, without the capital gain, it was more hassle than it was worth. Tenants not paying their rent, moving out before the end of term [1], leaving the place as a tip [1], making request for "unreasonable" improvements. Yes, you can employ an agent, but that will cost you 15% and they can't insulate you from every problem and sometimes create problems of their own. At 4% return, I wouldn't touch it again with someone else's barge pole. Though, even in the current market, there are properties/locations that return 12%. Are you expecting a capital gain here? If you are, would you consider investing in a property and keeping it empty was a good investment? YMMV tim [1] Having "spent" the deposit on the final month's rent that they didn't pay. |
#4
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OT - Renting Out Property
On 06/08/2012 09:26, TheScullster wrote:
Hi all From posts to the group in the past, it is clear that a number of posters own property for rental. Is the market saturated after all the buy-to-let hype of recent years? Is it a worthwhile investment if starting now(ish). I am likely to be in a position to take on a property (finances permitting) this year and wonder if this would be a good move in the current climate. The property is 3 bed semi in decent area - I am guessing at purchase price of around £150k and rental £500 pcm possibly more. Only very tentative interest ATM - not sure I could live with the hassle! If my figures are right on the rental income, what costs should I expect to pay out of the £6000 pa income? Thanks Phil I don't know exactly what the overheads would be - but presumably there'll be property insurance and maintenance, plus agent's fees if letting through an agency. And you'll need to pay for certificates of gas and electricity safety, etc. etc. If you've already got £150k with which to buy it, the £6k of income represents a return of only 4% even if you keep the lot (which you won't). You should be able to get at least that by investing it in a 3 or 5 year bond. If you need to borrow the money, you'll be paying more in mortgage interest than you're getting in rental - and will have to rely on the property appreciating in value over time to get any return at all. -- Cheers, Roger ____________ Please reply to Newsgroup. Whilst email address is valid, it is seldom checked. |
#5
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OT - Renting Out Property
On 06/08/12 10:26, TheScullster wrote:
Hi all From posts to the group in the past, it is clear that a number of posters own property for rental. Is the market saturated after all the buy-to-let hype of recent years? Is it a worthwhile investment if starting now(ish). I am likely to be in a position to take on a property (finances permitting) this year and wonder if this would be a good move in the current climate. The property is 3 bed semi in decent area - I am guessing at purchase price of around �150k and rental �500 pcm possibly more. Only very tentative interest ATM - not sure I could live with the hassle! If my figures are right on the rental income, what costs should I expect to pay out of the �6000 pa income? How long will you keep the property. You probably wont see a capital gain for many years. If prices fall then there is a potential loss, even if you can sit out any drop in prices it may affect the rental value. -- djc |
#6
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OT - Renting Out Property
Hi all
From posts to the group in the past, it is clear that a number of posters own property for rental. Is the market saturated after all the buy-to-let hype of recent years? Is it a worthwhile investment if starting now(ish). I am likely to be in a position to take on a property (finances permitting) this year and wonder if this would be a good move in the current climate. The property is 3 bed semi in decent area - I am guessing at purchase price of around £150k and rental £500 pcm possibly more. Only very tentative interest ATM - not sure I could live with the hassle! If my figures are right on the rental income, what costs should I expect to pay out of the £6000 pa income? Thanks Phil My son lets his house in Richmond North Yorks. He has had no problems, even when the first tenant left another was found within a couple of weeks. No maintenance issues other than a bit of damp which turned out to be tenant induced through lack of ventilation. He would now like to sell the house with sitting tenant, around £120,000 with £500 pcm rent if anyone is interested. Mike |
#7
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OT - Renting Out Property
TheScullster wrote:
Hi all From posts to the group in the past, it is clear that a number of posters own property for rental. Is the market saturated after all the buy-to-let hype of recent years? Is it a worthwhile investment if starting now(ish). I am likely to be in a position to take on a property (finances permitting) this year and wonder if this would be a good move in the current climate. The property is 3 bed semi in decent area - I am guessing at purchase price of around £150k and rental £500 pcm possibly more. Only very tentative interest ATM - not sure I could live with the hassle! If my figures are right on the rental income, what costs should I expect to pay out of the £6000 pa income? In a good year, you'd pay 20 - 30% for maintenance and other admin costs, in a bad year, you might only make £1000 in net rental income due to voids and "unusual" problems. There's a good chance that a few tenants will leave owing you rent or cost you money to have evicted, while trashing the place before they leave out of resentment. Avoid DSS tenants like the plague. According to a friend of mine who owns a dozen or so flats, students are good renters who normally move out every July and back in every September, giving you a month to decorate in between. Check with your local Students' Union, who will vet the tenants for you, and will administer the place for not a lot if you ask them. They can also get bad tenants into trouble with the college as an incentive for good behaviour. Then budget for a complete repaint and minor renovations every year when you work out the rent you need to make it pay. The place *will* suffer from condensation while they're in. -- Tciao for Now! John. |
#8
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OT - Renting Out Property
tim..... wrote:
"TheScullster" wrote in message ... Hi all From posts to the group in the past, it is clear that a number of posters own property for rental. Is the market saturated after all the buy-to-let hype of recent years? Is it a worthwhile investment if starting now(ish). I am likely to be in a position to take on a property (finances permitting) this year and wonder if this would be a good move in the current climate. The property is 3 bed semi in decent area - I am guessing at purchase price of around £150k and rental £500 pcm possibly more. Only very tentative interest ATM - not sure I could live with the hassle! If my figures are right on the rental income, what costs should I expect to pay out of the £6000 pa income? -------------------------------------------------------------------------------------------- My own experience of doing this when returns on a "normal" property were 12% is that, without the capital gain, it was more hassle than it was worth. Tenants not paying their rent, moving out before the end of term [1], leaving the place as a tip [1], making request for "unreasonable" improvements. Yes, you can employ an agent, but that will cost you 15% and they can't insulate you from every problem and sometimes create problems of their own. IME as a tenant, Agents do absolutely **** all beyond handing the money and running a credit check. cf when the boiler dies, middle of winter, baby in the house and landlord on holiday: Agent: "Nothing we can do..." Me: "Hires local CORGI firm to fix it" Landlord, later on return: "Thanks for finding a reasonable company to fix it - here's your money back". Luckily for me, the landlord was a decent bloke - but it taught me that teh Agent was basicallya bottom feeding parasite. At 4% return, I wouldn't touch it again with someone else's barge pole. Though, even in the current market, there are properties/locations that return 12%. Are you expecting a capital gain here? If you are, would you consider investing in a property and keeping it empty was a good investment? YMMV tim [1] Having "spent" the deposit on the final month's rent that they didn't pay. -- Tim Watts |
#9
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OT - Renting Out Property
On 06/08/2012 11:11, Tim Watts wrote:
tim..... wrote: "TheScullster" wrote in message ... Hi all From posts to the group in the past, it is clear that a number of posters own property for rental. Is the market saturated after all the buy-to-let hype of recent years? Is it a worthwhile investment if starting now(ish). I am likely to be in a position to take on a property (finances permitting) this year and wonder if this would be a good move in the current climate. The property is 3 bed semi in decent area - I am guessing at purchase price of around £150k and rental £500 pcm possibly more. Only very tentative interest ATM - not sure I could live with the hassle! If my figures are right on the rental income, what costs should I expect to pay out of the £6000 pa income? -------------------------------------------------------------------------------------------- My own experience of doing this when returns on a "normal" property were 12% is that, without the capital gain, it was more hassle than it was worth. Tenants not paying their rent, moving out before the end of term [1], leaving the place as a tip [1], making request for "unreasonable" improvements. Yes, you can employ an agent, but that will cost you 15% and they can't insulate you from every problem and sometimes create problems of their own. IME as a tenant, Agents do absolutely **** all beyond handing the money and running a credit check. cf when the boiler dies, middle of winter, baby in the house and landlord on holiday: Agent: "Nothing we can do..." Me: "Hires local CORGI firm to fix it" Landlord, later on return: "Thanks for finding a reasonable company to fix it - here's your money back". Luckily for me, the landlord was a decent bloke - but it taught me that teh Agent was basicallya bottom feeding parasite. That is also true from the landlords point of view as well. But if you are not in the same country then there isn't a lot of choice. Sat on the other side of the fence whilst on secondment to Brussels we rented our house out apparently without problems through an agent (save for breakages and the odd boiler fault fuel line airlock - which we were royally ripped off for mostly due to tenants forgetting to order heating oil). Oil lifters can be tetchy with air in the line. We had the house professionally cleaned before our return and still found a spectacular mess. The master bedroom had been painted dark camouflage khaki green and another bedroom shocking pink & purple. Hardly in keeping with the tenancy agreement for pastel shades. Our friends in the village said they had never seen the agent or his representative visit even once. The agent was pretty good at keeping the money flowing so he wasn't all bad but expect to take a big hit on redecorating and kitchen replacement periodically. It is truly amazing what hardware tenants can break! -- Regards, Martin Brown |
#10
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OT - Renting Out Property
On 06/08/2012 10:24, tim..... wrote:
My own experience of doing this when returns on a "normal" property were 12% is that, without the capital gain, it was more hassle than it was worth. Tenants not paying their rent, moving out before the end of term [1], leaving the place as a tip [1], making request for "unreasonable" improvements. Yes, you can employ an agent, but that will cost you 15% and they can't insulate you from every problem and sometimes create problems of their own. At 4% return, I wouldn't touch it again with someone else's barge pole. Though, even in the current market, there are properties/locations that return 12%. Are you expecting a capital gain here? If you are, would you consider investing in a property and keeping it empty was a good investment? YMMV tim [1] Having "spent" the deposit on the final month's rent that they didn't pay. I entirely agree with this. One of the biggest 'costs' is void periods between tenancies. According to ARLA, the average is about 5 weeks a year, which is another 10% of your rent whittled away. |
#11
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OT - Renting Out Property
He would now like to sell the house with sitting tenant I bet he would! One of the bigger issues for landlords is an exit route. It's often hard to sell with a tenant in situ, as tenants understandably are not keen to allow viewings, may not keep the place pristine, etc. on the other hand, selling without tenants in place means losing several months' rent, paying rates, heating an empty house, risking vandals/squatters. |
#12
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OT - Renting Out Property
On 06/08/2012 11:09, John Williamson wrote:
TheScullster wrote: Hi all From posts to the group in the past, it is clear that a number of posters own property for rental. Is the market saturated after all the buy-to-let hype of recent years? Is it a worthwhile investment if starting now(ish). I am likely to be in a position to take on a property (finances permitting) this year and wonder if this would be a good move in the current climate. The property is 3 bed semi in decent area - I am guessing at purchase price of around £150k and rental £500 pcm possibly more. Only very tentative interest ATM - not sure I could live with the hassle! If my figures are right on the rental income, what costs should I expect to pay out of the £6000 pa income? In a good year, you'd pay 20 - 30% for maintenance and other admin costs, in a bad year, you might only make £1000 in net rental income due to voids and "unusual" problems. There's a good chance that a few tenants will leave owing you rent or cost you money to have evicted, while trashing the place before they leave out of resentment. Avoid DSS tenants like the plague. According to a friend of mine who owns a dozen or so flats, students are good renters who normally move out every July and back in every September, giving you a month to decorate in between. Check with your local Students' Union, who will vet the tenants for you, and will administer the place for not a lot if you ask them. They can also get bad tenants into trouble with the college as an incentive for good behaviour. Then budget for a complete repaint and minor renovations every year when you work out the rent you need to make it pay. The place *will* suffer from condensation while they're in. Done it and couldnt sell quick enough, ok not the best area but the hassle was draining, on the rental aspect I doubt if I made a profit over 2 years between one thing and another. Sold house at profit and invest abroad at 10% plus can make a bit more by playing the sterling market. Personally I wouldnt touch property at the moment. |
#13
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OT - Renting Out Property
On Aug 6, 9:26*am, "TheScullster" wrote:
The property is 3 bed semi in decent area - I am guessing at purchase price of around 150k and rental 500 pcm possibly more. That's only 4% return. Factor in all the ongoing costs, etc., and you can do better than that in a building society. MBQ |
#14
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OT - Renting Out Property
"Nick Odell" wrote in message news On Mon, 6 Aug 2012 09:26:50 +0100, "TheScullster" wrote: Hi all From posts to the group in the past, it is clear that a number of posters own property for rental. Is the market saturated after all the buy-to-let hype of recent years? Is it a worthwhile investment if starting now(ish). I am likely to be in a position to take on a property (finances permitting) this year and wonder if this would be a good move in the current climate. The property is 3 bed semi in decent area - I am guessing at purchase price of around £150k and rental £500 pcm possibly more. Only very tentative interest ATM - not sure I could live with the hassle! If my figures are right on the rental income, what costs should I expect to pay out of the £6000 pa income? I'm in the same position as you - in fact I'm off to look at a couple of properties this afternoon - but I'm increasingly less certain about it being a good way to go. In my case, it's a matter of trying to get a better return on cash investments. If I were you, I wouldn't assume that £500 pcm adds up to £6000 pa. Unless you are in an area where demand outstrips supply and where people stay put in one place for years at a time I would either subtract an amount for void periods or subtract an amount for using an agent or subtract an amount for using an agent yet still suffering from voids. Part of the arithmetic of buy to let used to be the increase in capital value of the property. Unless you live in one of the few areas where property prices are still increasing, you live in one of the many areas where they are not - and there are people I trust who say that we are many years away from bottoming out. I'm doing my calculations on the basis that £Xooo investment will produce £Yoo return year after year and even if the value of the asset falls, that's what I've committed to produce the income. It could be many years before I see an increase in value of my capital so I'm not counting it and if £Yoo expressed as a percentage return on investment is less than I could get somewhere safe then it's not worth the hassle to me. Round my way there are 50-60 grand properties that will rent out for 350-400 per month so the arithmetic looks a little better to start with. Other costs? Insurance Gas inspection and repairs Energy Performance Certificate or whatever they call it nowadays Running repairs - which will depend a lot on the property and your tenant You might also like to take a look at this: http://www.newham.gov.uk/News/2012/J... approved.htm ..and ask how long before all councils are doing it. Personally, I'm also looking into the advantages or otherwise of buying a bigger house for myself and taking in a lodger. And I'm looking very seriously at peer-to-peer lending as a way of getting a decent return. That's my opinion: YMMV. And naturally, being in the position I am right now, I'm very interested in other replies! Nick Sound reasoning. Too late for PV panels now! It's hard to know what to do with any spare cash these days when armageddon looms (possibly). |
#15
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OT - Renting Out Property
On 06/08/2012 11:41, Man at B&Q wrote:
On Aug 6, 9:26 am, "TheScullster" wrote: The property is 3 bed semi in decent area - I am guessing at purchase price of around 150k and rental 500 pcm possibly more. That's only 4% return. Factor in all the ongoing costs, etc., and you can do better than that in a building society. As a business proposition, it's totally reliant on house prices going up. Aren't there house price futures/bets you could utilise for a lot less hassle? I think Betfair may have something. |
#16
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OT - Renting Out Property
"TheScullster" wrote in message ... The property is 3 bed semi in decent area - I am guessing at purchase price of around £150k and rental £500 pcm possibly more. That's a poor buy. The one I know a lot about was £75k a few moths ago and gets £500 pcm. There are plenty at that sort of price in Tipton. It was a repossession and need a new kitchen and bathroom but even then it was under £85k. It was sold lease hold but the freehold was included when the deal was completed. The bank didn't want the freehold for some reason a nice surprise for a change. If you are buying to make income you are obviously looking in the wrong area. |
#17
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OT - Renting Out Property
On 06/08/2012 11:48, GB wrote:
On 06/08/2012 11:41, Man at B&Q wrote: On Aug 6, 9:26 am, "TheScullster" wrote: The property is 3 bed semi in decent area - I am guessing at purchase price of around 150k and rental 500 pcm possibly more. That's only 4% return. Factor in all the ongoing costs, etc., and you can do better than that in a building society. As a business proposition, it's totally reliant on house prices going up. Aren't there house price futures/bets you could utilise for a lot less hassle? I think Betfair may have something. Rental market seems to be booming inside the M25. A lot of flat owners are stuck in the stamp duty trap and cannot afford to sell. |
#18
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OT - Renting Out Property
On Aug 6, 9:26*am, "TheScullster" wrote:
Hi all From posts to the group in the past, it is clear that a number of posters own property for rental. Is the market saturated after all the buy-to-let hype of recent years? Is it a worthwhile investment if starting now(ish). I am likely to be in a position to take on a property (finances permitting) this year and wonder if this would be a good move in the current climate. The property is 3 bed semi in decent area - I am guessing at purchase price of around 150k and rental 500 pcm possibly more. Only very tentative interest ATM - not sure I could live with the hassle! If my figures are right on the rental income, what costs should I expect to pay out of the 6000 pa income? Thanks Phil In Scotland have landlord licencing which is basically just another fee to pay except when getting into Houses in Multiple Occupancy, HMO, where 3 or more unrelated people are living in same property, suddenly you will require installed fire alarm system, fire extiguishers, fire doors and before next year, sprinklers.Along with deposits held in escrow. This in addition to Energy Performance Certificates, EPC, never seen or been asked for one, gas safety sign off and PAT testing on portable appliances like kettles and toasters if the property is going to be let furnished. As a landlord you are providing someones home and have responsibilties for that, this includes calls in the middle of the night for failed heating , leaks , noisy neighbours and lonely tenants just wanting someone to talk to. As a landlord have had 3 difficult evictions, 2 fires and a murder in last 20 years, in addition to redecorating at least once a year, void periods, inventory walking or being trashed, companies trying to trace previous tenants who have defaulted on credit. Tenants regard landlords as rich beyond the dreams of avarice and fair game for anything... `they can afford it` The better job they have the worse tenants they make in my experience. If you would like all of the above but 15% more expensive, employ a letting agent. There is always capaital gains tax waiting to swallow any ,er, capital gain you might have hoped to make over time as well. Cheers Adam |
#19
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OT - Renting Out Property
"dennis@home" wrote in message ... "TheScullster" wrote in message ... The property is 3 bed semi in decent area - I am guessing at purchase price of around £150k and rental £500 pcm possibly more. That's a poor buy. The one I know a lot about was £75k a few moths ago and gets £500 pcm. There are plenty at that sort of price in Tipton. There would be in Tipton. It was a repossession and need a new kitchen and bathroom but even then it was under £85k. It was sold lease hold but the freehold was included when the deal was completed. The bank didn't want the freehold for some reason a nice surprise for a change. If you are buying to make income you are obviously looking in the wrong area. |
#20
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In article ,
TheScullster scribeth thus Hi all From posts to the group in the past, it is clear that a number of posters own property for rental. Is the market saturated after all the buy-to-let hype of recent years? Is it a worthwhile investment if starting now(ish). I am likely to be in a position to take on a property (finances permitting) this year and wonder if this would be a good move in the current climate. The property is 3 bed semi in decent area - I am guessing at purchase price of around £150k and rental £500 pcm possibly more. Only very tentative interest ATM - not sure I could live with the hassle! If my figures are right on the rental income, what costs should I expect to pay out of the £6000 pa income? Thanks Phil In response to this an other posts... Research your market thoroughly and I mean that!. We've got a small rental portfolio but in a thriving Uni city where three bed ex council house is now around 240 K odd;!.. Vet your tenants first, go on your own instincts. Do check references they should have them unless there're coming from abroad when perhaps they won't but we've never had problems with overseas renters except the little Japanese lady who insisted I wear slippers to go into the bathroom. I said I would if she could find any size 14's;!.. If no references from their pervious landlord then be very very wary. Try to find out why there leaving and if it seems a bit odd ask if you can have the existing landlords number.. Get a proper Shorthold Tenancy agreement these run for 6 months and can be extended if they want to stay and you want them there. Take at last One months deposit and thats lodged with the Deposit protection service. This is for damages and them not paying the rent etc and cleaning if they do mess it up. https://www.depositprotection.com/he...agent-landlord Have it all in a written agreement and make -sure- they understand it.. Have a look at some sites such as, www.landlordtoday.co.uk Take pictures of ALL the rooms and give them copies on a CD ROM then any disputes should be easier to solve. Check the property often if you have any suspicions of them. Check they pay the rental on time and chase them if its a few days late. Its to keep them good.. Sometimes we have had them late but if there is a good reason then its usually OK.. As to the agreement make sure it has clauses of what there supposed to do like the garden etc and if they want to decorate it differently make sure they ask first and its to be done to a "workmanlike" standard. Pets?, mostly no but if they look like good tenets otherwise then a cat or small dog if it can be accommodated and its not likely to cause you a problem then allow it as most all others won't so you might be in a better position. We've allowed a cat and a small jack Russell type dog and they've been no problem. No do bear in mind that this is LONG TERM stuff you don't make a killing overnight its a long haul process and its best for you in a generally rising market so your .. location as usual, is important. Can you do better elsewhere with your money?. Difficult that some say you can clear 4 or 5 % I'd like to know where and how safe and what building society that is;!.. And if your renting a BS will usually charge you a higher rate so if you need to raise a few quid do it on your existing house you'll get a better rate.. Check with an accountant if you have one if not get an hours advice on what's allowable and what's not against Tax etc.. And finally don't bother with an agent unless its a very long way away. You can do just as well yourself and sometimes people prefer dealing direct with the landlord. You'll be on call 24/7 for any problems so if your not around make sure theres a friendly handyman, Gasman you'll need one for boiler inspections, electrician etc otherwise its all DIY if possible.. And best of luck, its been good for us but as others will say its all long term ....... -- Tony Sayer |
#21
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OT - Renting Out Property
Many thanks to all responders.
I think I've seen enough to put me off the idea. My estimate of £500 may have been a little low. However, having fallen foul in a way with Part P, the talk of tighter regulation on rental property (under East Riding Council) makes my blood run cold. A number of interesting and clearly well-informed posts - thanks Phil |
#22
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OT - Renting Out Property
On 06/08/2012 14:28, TheScullster wrote:
East Riding Council) makes my blood run cold. Your're not the only one then? Whereabouts are you out of interest? I'm just outside the Hull boundary. |
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OT - Renting Out Property
On 06/08/2012 13:31, brass monkey wrote:
"dennis@home" wrote in message ... "TheScullster" wrote in message ... The property is 3 bed semi in decent area - I am guessing at purchase price of around £150k and rental £500 pcm possibly more. That's a poor buy. The one I know a lot about was £75k a few moths ago and gets £500 pcm. There are plenty at that sort of price in Tipton. There would be in Tipton. Quite! The post-war PRS has always been about capital appreciation to some degree. Without that, it's a poor return on capital. If you're devious with tax you might just get a return. However, for BTL-types I do think there's a tendency to think in terms of retirement lump sums and fleecing pension funds - therefore the rationaility gets a bit twisted, and cash returns are replaced to some extent by 'safe as bricks and mortar' thinking. Rob |
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OT - Renting Out Property
TheScullster wrote:
Hi all From posts to the group in the past, it is clear that a number of posters own property for rental. Is the market saturated after all the buy-to-let hype of recent years? Is it a worthwhile investment if starting now(ish). I am likely to be in a position to take on a property (finances permitting) this year and wonder if this would be a good move in the current climate. The property is 3 bed semi in decent area - I am guessing at purchase price of around £150k and rental £500 pcm possibly more. Only very tentative interest ATM - not sure I could live with the hassle! If my figures are right on the rental income, what costs should I expect to pay out of the £6000 pa income? Now some years ago I used to do a lot of work for a couple southerners that were buying properties in run down areas of South Yorkshire, tarting them up and renting them. They sold up just before the crash. Today they phoned me up to say that they are going to now do the same thing again.They will again be going for the terraced house and DSS tenants market. They made themselves rich the first time round doing this and they are going to try to make themselves even richer. Some houses made a loss in the rental part but the price of the house increasing made them their money. The guy I know that bought 3 bed semis for a better class of customer had 3 of them turned into cannabis factories that cost thousand to repair. -- Adam |
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OT - Renting Out Property
"stuart noble" wrote in message ...
On 06/08/2012 11:48, GB wrote: On 06/08/2012 11:41, Man at B&Q wrote: On Aug 6, 9:26 am, "TheScullster" wrote: The property is 3 bed semi in decent area - I am guessing at purchase price of around 150k and rental 500 pcm possibly more. That's only 4% return. Factor in all the ongoing costs, etc., and you can do better than that in a building society. As a business proposition, it's totally reliant on house prices going up. Aren't there house price futures/bets you could utilise for a lot less hassle? I think Betfair may have something. Rental market seems to be booming inside the M25. A lot of flat owners are stuck in the stamp duty trap and cannot afford to sell. -------------------------------------------------------------------------------------------- "Booming" and good yield/good tenants are not the same thing. The only positive that a booming rental demand offers you is limited voids. All the other risks are still there tim |
#26
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OT - Renting Out Property
"TheScullster" wrote in message
. uk... Many thanks to all responders. I think I've seen enough to put me off the idea. My estimate of £500 may have been a little low. However, having fallen foul in a way with Part P, the talk of tighter regulation on rental property (under East Riding Council) makes my blood run cold. ------------------------------------------------------------------------------- How's the holiday rental market there? Total yields are much better, and tenants tend to be "better behaved", so there isn't really much extra effort in running it (you can employ a local cleaner for the weekly handover), though obviously there's extra effort/cost in marketing plus the initial furnishing. The treatment for CGT on exit is better as well you can buy 6 of these: http://www.rightmove.co.uk/property-...-23687781.html (I wouldn't holiday in it, but people do) or perhaps 2 of these: http://www.rightmove.co.uk/property-...-23497539.html Though not all park home managers will let you rent them out, but some will tim |
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OT - Renting Out Property
"harryagain" wrote in message ... "Nick Odell" wrote in message news On Mon, 6 Aug 2012 09:26:50 +0100, "TheScullster" wrote: Hi all From posts to the group in the past, it is clear that a number of posters own property for rental. Is the market saturated after all the buy-to-let hype of recent years? Is it a worthwhile investment if starting now(ish). I am likely to be in a position to take on a property (finances permitting) this year and wonder if this would be a good move in the current climate. The property is 3 bed semi in decent area - I am guessing at purchase price of around £150k and rental £500 pcm possibly more. Only very tentative interest ATM - not sure I could live with the hassle! If my figures are right on the rental income, what costs should I expect to pay out of the £6000 pa income? I'm in the same position as you - in fact I'm off to look at a couple of properties this afternoon - but I'm increasingly less certain about it being a good way to go. In my case, it's a matter of trying to get a better return on cash investments. If I were you, I wouldn't assume that £500 pcm adds up to £6000 pa. Unless you are in an area where demand outstrips supply and where people stay put in one place for years at a time I would either subtract an amount for void periods or subtract an amount for using an agent or subtract an amount for using an agent yet still suffering from voids. Part of the arithmetic of buy to let used to be the increase in capital value of the property. Unless you live in one of the few areas where property prices are still increasing, you live in one of the many areas where they are not - and there are people I trust who say that we are many years away from bottoming out. I'm doing my calculations on the basis that £Xooo investment will produce £Yoo return year after year and even if the value of the asset falls, that's what I've committed to produce the income. It could be many years before I see an increase in value of my capital so I'm not counting it and if £Yoo expressed as a percentage return on investment is less than I could get somewhere safe then it's not worth the hassle to me. Round my way there are 50-60 grand properties that will rent out for 350-400 per month so the arithmetic looks a little better to start with. Other costs? Insurance Gas inspection and repairs Energy Performance Certificate or whatever they call it nowadays Running repairs - which will depend a lot on the property and your tenant You might also like to take a look at this: http://www.newham.gov.uk/News/2012/J... approved.htm ..and ask how long before all councils are doing it. Personally, I'm also looking into the advantages or otherwise of buying a bigger house for myself and taking in a lodger. And I'm looking very seriously at peer-to-peer lending as a way of getting a decent return. That's my opinion: YMMV. And naturally, being in the position I am right now, I'm very interested in other replies! Sound reasoning. Too late for PV panels now! Great, less parasites parasiting. It's hard to know what to do with any spare cash these days Nope. Plenty of us get much better returns than that, with full govt guarantees on the cash too. when armageddon looms (possibly). Just another silly little fantasy. We survived the great depression fine. We'll survive the EU imploding too. |
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OT - Renting Out Property
On 06/08/2012 17:43, ARWadsworth wrote:
TheScullster wrote: Hi all From posts to the group in the past, it is clear that a number of posters own property for rental. Is the market saturated after all the buy-to-let hype of recent years? Is it a worthwhile investment if starting now(ish). I am likely to be in a position to take on a property (finances permitting) this year and wonder if this would be a good move in the current climate. The property is 3 bed semi in decent area - I am guessing at purchase price of around £150k and rental £500 pcm possibly more. Only very tentative interest ATM - not sure I could live with the hassle! If my figures are right on the rental income, what costs should I expect to pay out of the £6000 pa income? Now some years ago I used to do a lot of work for a couple southerners that were buying properties in run down areas of South Yorkshire, tarting them up and renting them. They sold up just before the crash. Today they phoned me up to say that they are going to now do the same thing again.They will again be going for the terraced house and DSS tenants market. They made themselves rich the first time round doing this and they are going to try to make themselves even richer. Some houses made a loss in the rental part but the price of the house increasing made them their money. The guy I know that bought 3 bed semis for a better class of customer had 3 of them turned into cannabis factories that cost thousand to repair. Taking a sidestep, you could buy a 2 bedroom place in Turkey for £30k or less get some (not a lot) rental and have a holiday home for yourself. It is safe to buy there ONLY if you get proper guidance from someone who knows the system. |
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OT - Renting Out Property
"tim....." wrote in message
... "TheScullster" wrote in message . uk... Many thanks to all responders. I think I've seen enough to put me off the idea. My estimate of £500 may have been a little low. It's just a different form of investment. At least, with £150K invested in a property, you will always have some land and a pile of bricks to show for it. In a bank it could just be wiped out, and you may or may not get your guaranteed £85K back sometime in the future. Some types of property can also be a bit more profitable than others; for example a studio flat could be let for proportionately more rent than a house, and being cheaper, can be more attractive to tenants. (And actually most of my experience as a landlord has been to let by the room, where you can make even more money compared with letting the whole house.) -- Bartc |
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OT - Renting Out Property
"Part Timer" wrote
East Riding Council) makes my blood run cold. Your're not the only one then? Whereabouts are you out of interest? I'm just outside the Hull boundary. Swanland - no not the part where the monied gentry hang out How about you? Phil |
#31
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OT - Renting Out Property
"tim....." wrote
Many thanks to all responders. I think I've seen enough to put me off the idea. My estimate of £500 may have been a little low. However, having fallen foul in a way with Part P, the talk of tighter regulation on rental property (under East Riding Council) makes my blood run cold. ------------------------------------------------------------------------------- How's the holiday rental market there? Total yields are much better, and tenants tend to be "better behaved", so there isn't really much extra effort in running it (you can employ a local cleaner for the weekly handover), though obviously there's extra effort/cost in marketing plus the initial furnishing. I'm not sure there is such a thing as a holiday let market around Hull! Handy for the Humber Bridge, but that's about it. Really would need to be heading north towards Beverley orYork for that to be a realistic option I suspect. Phil |
#32
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OT - Renting Out Property
"TheScullster" wrote in message
. uk... "tim....." wrote Many thanks to all responders. I think I've seen enough to put me off the idea. My estimate of £500 may have been a little low. However, having fallen foul in a way with Part P, the talk of tighter regulation on rental property (under East Riding Council) makes my blood run cold. ------------------------------------------------------------------------------- How's the holiday rental market there? Total yields are much better, and tenants tend to be "better behaved", so there isn't really much extra effort in running it (you can employ a local cleaner for the weekly handover), though obviously there's extra effort/cost in marketing plus the initial furnishing. I'm not sure there is such a thing as a holiday let market around Hull! Handy for the Humber Bridge, but that's about it. Really would need to be heading north towards Beverley orYork for that to be a realistic option I suspect. ---------------------------------------------------------------------------------------------- That's still close enough for you to "manage" problems yourself. Holiday home investors don't expect to live in the same village. The same county is more than close enough tim |
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