mattyg1086 Posted February 18, 2016 Report Share Posted February 18, 2016 Does anyone on here rent out properties or know anything about renting a second or third home. Like how much money is required for deposits whether or not its actually worth it or not Quote Link to comment Share on other sites More sharing options...
Bobba Posted February 18, 2016 Report Share Posted February 18, 2016 Little background on the reason for the the Q. Eg are you about to rent? We rent out a flat via an agent. There is a tenancy agreement setting out both the landlord and tenants responsibilities. A deposit is required . It calculates at about 150% of the monthly rent. It's there to cover any damage done by the tenants subject to fair wear and tear. The tenants deposit is protected. It is placed in the tenants deposit scheme (TDS). The tenant is given a TDS deposit No. When a tenant leaves an indpendent inventory clerk assesses the property against the ingoing inventory. Any damage then the tenant is told the cost of rectification. That amount is withheld and the remainder of the deposit released. If the tenant objects to the value withheld the matter is referred to an independant adjudicator in the TDS. The TDS decision is binding on both parties. If the TDS disagree with the landlord the agent is instructed to return that part of the deposit withheld. We regard this as ideal arrangement for both parties. Not all aspects may be in place should you rent. But the one aspect you should be sure of is that your deposit is protected. Ask any prospective landlord how it is independently protected. It is your money, not the landlords and the landlord has to properly justify why they wish to withhold it either in total or in part. Quote Link to comment Share on other sites More sharing options...
LondonLuke Posted February 18, 2016 Report Share Posted February 18, 2016 (edited) Does anyone on here rent out properties or know anything about renting a second or third home. Like how much money is required for deposits whether or not its actually worth it or notYou will need 25% down and BTL rates are not as favourable as resi but you can get interest only What to buy is area dependent, in most places a one bed is a safe bet (as the extra rent from having two bedrooms often doesn't get covered by extra asking price) in other places a two up two down with parking near a school/train may be better. It's all about potential yield for your money and if this is better than the bank will give you - but do bear in mind extra hassle (non payers, damage, voids, regulations (gas, legionnaires, smoke alarms, etc)) They are just about to (April) change the SDLT to being +3% on existing amount for anyone purchasing as an investor and the tax laws are changing so you will be charged tax on rental turnover (I.e. £500/month rent means tax on £6000/year) whereas currently it's on profit (£500/month rent, £250/month mortgage means tax on £3000/year) so BTL is in a transition and it's not really known what impact this may have. My instinct says those heavily geared outside London will sell but most will ride the storm but not invest in any more at this stage to see if tax changes stick. One thing I wouldn't do is invest somewhere miles from home - a leak at 4pm on a Sunday becomes a huge headache and paying a full time management company eats into profits. Edited February 18, 2016 by LondonLuke Quote Link to comment Share on other sites More sharing options...
ShootingEgg Posted February 18, 2016 Report Share Posted February 18, 2016 I privately rent a property as i didn't feel the need to pay an agent to do not alot once a tenant was found, have used agents in the past and have found that even though I paid for a service I didnt actually receive any. I now find it easier and more personal to deal with my tenants. Normally the deposit would be dictated by the price of the property if you are buying to live in or let out. Obviously then that would inturn determine the repayments on a mortgage and then reflect how much the monthly rent a tenant would pay. As Bobba has mentioned the rentnhe chargesbis at 150%. you ideally want the rent to be slighty over the repayment amount, this is to factor in any repairs you may have to do to the property... But dont be to greedy, after All the tax man asks for some of your "profit" each year.. As to knowing if it is worth it... I have the property and am treating it almost like a pension. At some point in the future i will sell the property and have a lump sum to sit on and use to live on and/or invest in something else be it another property or anything that may catch my eye. Hope this helps. Quote Link to comment Share on other sites More sharing options...
numpty Posted February 18, 2016 Report Share Posted February 18, 2016 Hi Mattyg1086, I see you have three useful and informative replies on renting out a property. I work on the eviction side of the business so see far more issues than the average letting agent does but they are a very small minority. The legislation regarding the Right to Rent, Deposits and repairs can be a minefield and I would look to join one of the Landlord Associations and attend a meeting or two in your area talking to other like minded landlords/investors. I also own a small property portfolio and can endorse, that as a long term investment, property stacks up. Quote Link to comment Share on other sites More sharing options...
mattyg1086 Posted February 18, 2016 Author Report Share Posted February 18, 2016 Thanks everyone i have to find a bit more money for the deposit but me and the wife are looking to get a second home to rent out as a long term investment for the kids or our retirement and the plan is to own a few. Is it viable to get to a stage where you can stop working and live off the rentals Quote Link to comment Share on other sites More sharing options...
old'un Posted February 18, 2016 Report Share Posted February 18, 2016 Thanks everyone i have to find a bit more money for the deposit but me and the wife are looking to get a second home to rent out as a long term investment for the kids or our retirement and the plan is to own a few. Is it viable to get to a stage where you can stop working and live off the rentals It all depends on the initial cost/mortgage of the property and potential income from it, for long term investment you cannot go wrong with property but don't forget to factor in capital gains tax when you decide to sell. If you are good at diy then look at house auctions, you can get some real bargains but be aware of money pits when you view properties. Quote Link to comment Share on other sites More sharing options...
scobydog Posted February 18, 2016 Report Share Posted February 18, 2016 A good idea is to go to the property auction a few times to get an idea of what goes on if your going down that route. I've got some good properties through them both residential and commercial, as for living off the income yes it can be done if you are good at the rental side but you can get bored very easily. I know several friends who have a lot of properties who don't have to lift a finger but they still go to their offices most day's to keep an eye on things. Also speak to estate agents and see what is needed in the areas you are looking at. Atb S Quote Link to comment Share on other sites More sharing options...
Vince Green Posted February 18, 2016 Report Share Posted February 18, 2016 You need to become an avid reader of this http://www.propertytribes.com gradually you will absorb a lot of useful information Quote Link to comment Share on other sites More sharing options...
mattyg1086 Posted February 19, 2016 Author Report Share Posted February 19, 2016 Thanks everyone i work nights and have been reading the suggested website all night. Its very interesting ibe been looking local to me bedfordshire but reading the website if i look a little bit further houses are so much cheaper. lots to think about Quote Link to comment Share on other sites More sharing options...
proud dad Posted February 19, 2016 Report Share Posted February 19, 2016 Some good replies above, but the most important bit of advice hasn't been mentioned, and that is that interest rates are at an all time low right now, and there is only one way that they can go. You need to make sure that your rent will still cover this. Remember the interest rate was 15% at one time. Quote Link to comment Share on other sites More sharing options...
scotslad Posted February 19, 2016 Report Share Posted February 19, 2016 It will depend where u are. But if house prices are already dear it might not be that vaible to BTL, i my area up till about 15 yrs ago they were really cheap but now not making that good a return on them. Really needing the property value to rise Also just be careful if u have to do a lot of work esp if not so handy urself (all electricsal will have to be ticketed to let out) i'm in the process of selling my house, and despite getting it cheap 13 years ago not really making that much on it. And that was doing the most of the work myself to renovate it (bet if i paid peopple to do the work there would be no profit involved), no idea how some of these tv programmes do houses up for the money they claim when using tradsemen/subbies. Not always as easy as it looks and u can get caight out. Actuallty speaking to a joiner mate yest was passing his van, went to investigate a bit of damp on 3rd floor and has found whole 3rd floor and attick may be structural unsound, some numb nut (East european joiner was mentioned/blamed) cut through the floor joists to replace them but never rejoined them again and outside edge of joists are holding u the outside of building and roof (very strange design as floor joist actually stick out the outside of building and are shaped) No survey would of poicked that up and looks normal to look at Quote Link to comment Share on other sites More sharing options...
Twistedsanity Posted February 19, 2016 Report Share Posted February 19, 2016 It's not all plain sailing, I have a brother who rents properties and ends up running away at midnight with his family owing 6-7k in arrears plus all the other utilities and they live like peasants leaving thousands of pounds of repairs behind for the landlord, nan is in a care home and the last tennant we had in her home was subletting all the rooms to illegal immigrants and left owing £2000 in rent arrears and it cost us around £4K in repairs to make it rentable again, guy over the road has now spent a year with no rent income trying to evict his tennants, it's not all doom and gloom but it's not always a bed of roses as people imagine it to be, in London landlords will now not entertain people on benefits as the government will only pay the rent cheque direct to the tennant and not the landlord, so you get a 19yr old girl with a child who has a cheque for £1500 land on her doorstep every month and decides a pair of Gucci shoes and a Michael kors handbag take priority over her rent........ Many will not pay rent to get themselves evicted so they become a homeless priority for the council Quote Link to comment Share on other sites More sharing options...
McSpredder Posted February 19, 2016 Report Share Posted February 19, 2016 Downloadable guide for buy-to-let. The actual examples are for the Northampton area, but it's full of useful info that should be applicable anywhere. http://pdfsr.com/download/buytolet-guide-northampton-2016 Quote Link to comment Share on other sites More sharing options...
Mungler Posted February 19, 2016 Report Share Posted February 19, 2016 Some commercial property is worth a look - shops in the righ areas, lock up units etc. Indeed at the other end of the spectrum I bought a garage to store stuff about 3 years ago - I paid £8k for it and I could sell it to a queue of people tomorrow for £15k or it would rent. Round our way there's been loads of activity in finalising local plans and there's thousands of properties coming through the pipe line now. It's all too little too late. There's just too many people in the country and the net immigration still soars year on year. The taxation regime is going to eat into the b2l market place but where interest rates are low and are showing no sign of moving and where all other markets are in the doldrums or require a middle man who will eat into your profits with a commission bill, then people will still stick with what they know. Also most b2l holders actually chase capital growth - you use the rent to wash the mortgage and either sit back smugly watching the capital growth or you remortgage and strip out your profit. Quote Link to comment Share on other sites More sharing options...
mattyg1086 Posted February 19, 2016 Author Report Share Posted February 19, 2016 I am an electrician and fairly handy so i can do anything in a house bar the boiler which i know a few people for so im ok in that respect i just want to get more out of life than just work 9-5 and then retire id like to be able to retire early and pay for my kids education and improve all of our quality of life. Im only 29 just now so id like to buy another property or two by the time im 40 Quote Link to comment Share on other sites More sharing options...
LondonLuke Posted February 19, 2016 Report Share Posted February 19, 2016 Good on you mate. I purchased my first at 28, just about to be 31 and now on three. They give you something to push forward and work towards and being self employed it made me even more driven. It's good to see someone with ambition - a classic case of wish you were closer as we always need decent sparks. I'm not sure if I will do another or focus on something else to invest in - but what?! Was offered a lighting shop last week which might be a good option but then have to find staff etc. Something to think on! Quote Link to comment Share on other sites More sharing options...
jam1e Posted February 19, 2016 Report Share Posted February 19, 2016 Thanks everyone i have to find a bit more money for the deposit but me and the wife are looking to get a second home to rent out as a long term investment for the kids or our retirement and the plan is to own a few. Is it viable to get to a stage where you can stop working and live off the rentals I don't know the legalities of it. However, I believe whether it's financially worth it depends on numerous things, like, buy to do up yourself and rent, (saving you money) the area it's situated, the economy, and allsorts.... I have 3 friends who have bought to let as an investment. The one states it ended up costing him money and stress. The second makes a small amount of income at the end of the year. And the third is now very well off indeed, and only rents out 2 properties. Huge variables in my opinion..... Quote Link to comment Share on other sites More sharing options...
mattyg1086 Posted February 19, 2016 Author Report Share Posted February 19, 2016 Good on you mate. I purchased my first at 28, just about to be 31 and now on three. They give you something to push forward and work towards and being self employed it made me even more driven. It's good to see someone with ambition - a classic case of wish you were closer as we always need decent sparks. I'm not sure if I will do another or focus on something else to invest in - but what?! Was offered a lighting shop last week which might be a good option but then have to find staff etc. Something to think on! i take from your name you are in london is that right? If so the site i work at is in barnet and one of my colleagues has his own business on the side and lives in enfield if thats any good to you Quote Link to comment Share on other sites More sharing options...
LondonLuke Posted February 19, 2016 Report Share Posted February 19, 2016 i take from your name you are in london is that right? If so the site i work at is in barnet and one of my colleagues has his own business on the side and lives in enfield if thats any good to you Yeah sure am. We are west London but if he covers across west too then would be delighted to be in touch with him. We do Richmond through to Mayfair and upto St John's Wood/Hampstead. Quote Link to comment Share on other sites More sharing options...
kingo15 Posted February 19, 2016 Report Share Posted February 19, 2016 You will need 25% down and BTL rates are not as favourable as resi but you can get interest only What to buy is area dependent, in most places a one bed is a safe bet (as the extra rent from having two bedrooms often doesn't get covered by extra asking price) in other places a two up two down with parking near a school/train may be better. It's all about potential yield for your money and if this is better than the bank will give you - but do bear in mind extra hassle (non payers, damage, voids, regulations (gas, legionnaires, smoke alarms, etc)) They are just about to (April) change the SDLT to being +3% on existing amount for anyone purchasing as an investor and the tax laws are changing so you will be charged tax on rental turnover (I.e. £500/month rent means tax on £6000/year) whereas currently it's on profit (£500/month rent, £250/month mortgage means tax on £3000/year) so BTL is in a transition and it's not really known what impact this may have. My instinct says those heavily geared outside London will sell but most will ride the storm but not invest in any more at this stage to see if tax changes stick. One thing I wouldn't do is invest somewhere miles from home - a leak at 4pm on a Sunday becomes a huge headache and paying a full time management company eats into profits. But how you were taxed was all dependant on the mortgage you had. Quote Link to comment Share on other sites More sharing options...
LondonLuke Posted February 19, 2016 Report Share Posted February 19, 2016 But how you were taxed was all dependant on the mortgage you had. Correct and I should have highlighted that the above example assumes an interest only mortgage. Repayments are not tax deductible. Quote Link to comment Share on other sites More sharing options...
Lloyd90 Posted February 20, 2016 Report Share Posted February 20, 2016 (edited) What about buy to let outright ? Came into some money and looking to buy a house in Wales , looking at a 3 bedroom semi for £8-90k bringing back £5-600 a month rent Also is it then easy enough to release money from the house or use it to buy further property in the future ? Edited February 20, 2016 by Lloyd90 Quote Link to comment Share on other sites More sharing options...
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