How much is your hoose

[ICTJohnboy]

1 hour ago, Granny Danger said:

I looked at buy-to-let a couple of years back and decided it wasn't for me.

During this I visited a handful of properties that an agent was already managing where the owners wanted to sell.  It was not an edifying experience.

 

 

Looking at, visiting properties in Dundee that owners wanted to sell was not an edifying experience?

You do surprise me.

[hk blues]

For me it was mostly a case of buying something I could fall back on when I inevitably f**k up over here and get sent home. The rental income makes absolutely zero difference to my quality of life. If, in 25 years someone else has paid off my mortgage, then I will be delighted at the windfall that ensues when I punt it.
Having bought one under those circumstances, I could be tempted to do something similar but on a larger scale. Again, the level I am looking at the income would make little difference to me but when added to the first I would really need to look at the consequences from a tax point of view, both here and in the UK. That part of it is the only thing putting me off.

I'm too much of a coward to leave a property and manage from afar - depends who you're renting to of course.

Tax is a fucker but the great thing is it's only a %age of whatever you're making - I'd love to be paying tens of thousands of pounds in tax!

[Guest Moomintroll]

Would be highly controversial and undoubtedly exploited by many loopholes but there surely has to be an argument towards prioritising people who are buying to live in the property over buy to let investors. If no one wants to buy to live there then the buy to let people can knock themselves out, would undoubtedly lead to a decline in prices but as a home owner myself that is a price worth paying to get more people who want to own their own property on the ladder. Probably so many legal reasons why this cannot and will not happen but something has to be done to move the balance back to residential owners vs speculators using their wealth to lock these people out of ownership and effectively using them to pay off their mortgage debt, the tax laws coming in will no doubt lead to further rises in private let rents as the these people move to cover their "losses".

[chomp my root]

3 hours ago, hk blues said:

I'm not a landlord...never have been... but are landlords necessarily speculators, or are they merely looking for investment income that beats some of the alternatives they might be looking at?

If I was in that game, it would be for the rental income rather than any capital appreciation of the property.

Sent from my LG-D724 using Pie and Bovril mobile app
 

This is pretty much how I saw it. Instead of selling my property I remortgaged it and took out money to buy another place. A few years later remortgaged the new place and then remortgaged the firat place again. I'm not a gambler by inclination but felt this was a better and safer way to use my cash than stocks or spunking it on cars/holidays or whatever. As soon as the economy went tits I stopped as I didn't want to risk what I had. On paper I lost thousands when property values dropped, not that it was an issue as I had no plans to sell but thats the risk of any speculation. 

I knew when the topic moved on that the 'evil' landlords would get it. I would live in all 3 of the places I let out and any work is done immediately. If we're not going to build enough affordable housing I'd be all for a rent cap. 

Something else to toss in, a lot of people can't get a mortgage because they've been financial basket cases, racking up big debts etc, I've known a few, its understandable that the banks wouldn't want to touch them. My daughter who is pretty good with her cash would rather be going on expensive holidays than save for a mortgage, she would like to have her own place but prioritises other things, her choice and she chooses to rent.

[invergowrie arab]

12 minutes ago, chomp my root said:

This is pretty much how I saw it. Instead of selling my property I remortgaged it and took out money to buy another place. A few years later remortgaged the new place and then remortgaged the firat place again. I'm not a gambler by inclination but felt this was a better and safer way to use my cash than stocks or spunking it on cars/holidays or whatever. As soon as the economy went tits I stopped as I didn't want to risk what I had. On paper I lost thousands when property values dropped, not that it was an issue as I had no plans to sell but thats the risk of any speculation. 

I knew when the topic moved on that the 'evil' landlords would get it. I would live in all 3 of the places I let out and any work is done immediately. If we're not going to build enough affordable housing I'd be all for a rent cap. 

Something else to toss in, a lot of people can't get a mortgage because they've been financial basket cases, racking up big debts etc, I've known a few, its understandable that the banks wouldn't want to touch them. My daughter who is pretty good with her cash would rather be going on expensive holidays than save for a mortgage, she would like to have her own place but prioritises other things, her choice and she chooses to rent.

The number of people rejected for mortgages due to bad credit rating who can actually afford 10% of the value of a property plus associated fees will be absolutely minimal

[chomp my root]

4 minutes ago, invergowrie arab said:

The number of people rejected for mortgages due to bad credit rating who can actually afford 10% of the value of a property plus associated fees will be absolutely minimal

I've seen mortgages for less than 10% again, by all means work yourself up about the whole injustice of it all though, its the P & B way.

[Sergeant Wilson]

1 hour ago, chomp my root said:

I've seen mortgages for less than 10% again, by all means work yourself up about the whole injustice of it all though, its the P & B way.

Come the revolution we'll shoot you last, because out of all the capitalist pigs we like you the best.

[invergowrie arab]

10 minutes ago, chomp my root said:

I've seen mortgages for less than 10% again, by all means work yourself up about the whole injustice of it all though, its the P & B way.

Yeah and what are the terms of 5% mortgages?

Keep telling yourself the Tory line that those don't get on in life are to blame for their own profligate behaviour.

 

[chomp my root]

14 minutes ago, invergowrie arab said:

Yeah and what are the terms of 5% mortgages?

Keep telling yourself the Tory line that those don't get on in life are to blame for their own profligate behaviour.

 

Adding 2 and 2 and getting 197. I'm away to tie a maiden to some railway tracks and twirl my moustachios. Mwah ha ha. 

[coprolite]

Regulated privatised industries, whilst still wholly shite, are not the same as the free market.

The free market is a hypothetical construct, not an actually existing thing.

No market is a free market.

Water is privatised to promote competition and pass risk to the private sector.

In reality there can be no competition. If you live in Newcastle you can't switch to Welsh Water.

prices are regulated to ensure companies make a profit.

This is the most egregious of all privatisations so far.

[coprolite]

I'm too much of a coward to leave a property and manage from afar - depends who you're renting to of course.

Tax is a fucker but the great thing is it's only a %age of whatever you're making - I'd love to be paying tens of thousands of pounds in tax!

The tax changes could easily wipe out profits at the margin of highly geared investors.

say you let a £200k debt funded property. Your rent after expenses etc is £12k. You pay interest of £10k.

Higher rate tax which you pay is 40%.
basic rate tax is 20%.

currently you make a profit of £2k and pay tax of £800 on it. Added to a 2% annual appreciation your return is ok.

in 2020, you have the same profit. You are still taxed at 40% on the income. You now get your relief at basic rate. the tax payable is now £4.8k less £2k, or £2.8k.

You still make a positive return through appreciation, but your cash is knackered. if you can't fund the losses then you have to sell to the big boys who can.

This doesn't stop people being exploitative landlords. This stops ordinary people being landlords and gives more advantage to the already wealthy.

and tax isn't a fucker. It is the basis of civilisation. And very cool and sexy.

[Sergeant Wilson]

I'm too stupid to understand any of that. I think we'll have to shoot you to be on the safe side.

[chomp my root]

1 hour ago, Sergeant Wilson said:

Come the revolution you'll we'll shoot you last, because out of all the capitalist pigs we like you the best.

Thanks...... I think. 

[Granny Danger]

43 minutes ago, coprolite said:

 

The tax changes could easily wipe out profits at the margin of highly geared investors.

say you let a £200k debt funded property. Your rent after expenses etc is £12k. You pay interest of £10k.

Higher rate tax which you pay is 40%.
basic rate tax is 20%.

currently you make a profit of £2k and pay tax of £800 on it. Added to a 2% annual appreciation your return is ok.

in 2020, you have the same profit. You are still taxed at 40% on the income. You now get your relief at basic rate. the tax payable is now £4.8k less £2k, or £2.8k.

You still make a positive return through appreciation, but your cash is knackered. if you can't fund the losses then you have to sell to the big boys who can.

This doesn't stop people being exploitative landlords. This stops ordinary people being landlords and gives more advantage to the already wealthy.

and tax isn't a fucker. It is the basis of civilisation. And very cool and sexy.

 

 

Read an article in the last week comparing SIPP pensions to buy-to-let.  SIPP wins by a margin with less hassle and greater tax advantages.

Also for anyone self-employed it's a no-brainer given the tax relief on pension contributions.

Given many folks use buy-to-let as a form of retirement investment it's  an interesting comparison.

[ICTChris]

50 minutes ago, Granny Danger said:

Read an article in the last week comparing SIPP pensions to buy-to-let.  SIPP wins by a margin with less hassle and greater tax advantages.

Also for anyone self-employed it's a no-brainer given the tax relief on pension contributions.

Given many folks use buy-to-let as a form of retirement investment it's  an interesting comparison.

You can't house Somali refugee crack dealers, six-to-a-room in a boring old SIPP though, can you?

[Shandon Par]

6 hours ago, Moomintroll said:

Would be highly controversial and undoubtedly exploited by many loopholes but there surely has to be an argument towards prioritising people who are buying to live in the property over buy to let investors. If no one wants to buy to live there then the buy to let people can knock themselves out, would undoubtedly lead to a decline in prices but as a home owner myself that is a price worth paying to get more people who want to own their own property on the ladder. Probably so many legal reasons why this cannot and will not happen but something has to be done to move the balance back to residential owners vs speculators using their wealth to lock these people out of ownership and effectively using them to pay off their mortgage debt, the tax laws coming in will no doubt lead to further rises in private let rents as the these people move to cover their "losses".

It's not publicised as such but Scottish Government is quietly putting the squeeze on the private rented sector. Firstly the UK-wide tax changes mentioned in recent threads on a UK level will price many landlords out. Money is being flung at housing associations to build mid-market rent properties. Letting agents from next year will be regulated, with big outlays due on compliance etc and many will inevitably chuck it (leaving clients out of pocket). Tenancy changes afoot could make HMO places in particular far less attractive as owners won't be able to specify end dates to the tenancy, leaving the possibility of places coming up outwith university term times etc. Whenever the govt tries tinkering with the rental market, whatever their good intentions they opposite usually happens to what they plan (ie it forces up rents as you suggest). Their closest advisers seem to be Shelter. They're used to dealing with those on the vulnerable edge of society rather than a typical normal tenancy, the result being the government seems to get a skewed version of what a typical tenancy is like in terms of the relationship between landlord/tenant/agent. 

[ICTChris]

Letting agencies are a brilliant scam.

A former friend of mine, through various circumstances, had to let out his house and then move into a rented flat with his then girlfriend.  He went to the same letting agency to do both but in different locations.  Firstly the one he went to let out his house said they'd take care of everything but they'd need to take a cut for maintenance, vetting potential tenants, etc.  So he said he'd think about it and went off to the meeting about renting the flat he was to move into - they also said that his rent included the fee for the landlord but also money to cover.... maintenance, vetting and other expenses.  So he was like 

he still managed to make a total bollocks of renting his house out though and lost thousands of pounds.

[chomp my root]

3 minutes ago, ICTChris said:

Letting agencies are a brilliant scam.

A former friend of mine, through various circumstances, had to let out his house and then move into a rented flat with his then girlfriend.  He went to the same letting agency to do both but in different locations.  Firstly the one he went to let out his house said they'd take care of everything but they'd need to take a cut for maintenance, vetting potential tenants, etc.  So he said he'd think about it and went off to the meeting about renting the flat he was to move into - they also said that his rent included the fee for the landlord but also money to cover.... maintenance, vetting and other expenses.  So he was like 

he still managed to make a total bollocks of renting his house out though and lost thousands of pounds.

Letting agents are like anything else, good ones and bad ones. I asked a mate who was letting if he had any recommendations. It was a friend of his missus and she has been brilliant, gave me a good idea of what I was looking for when I eventually put my old flat through an agency. 

[resk]

2 hours ago, Granny Danger said:

Read an article in the last week comparing SIPP pensions to buy-to-let.  SIPP wins by a margin with less hassle and greater tax advantages.

Also for anyone self-employed it's a no-brainer given the tax relief on pension contributions.

Given many folks use buy-to-let as a form of retirement investment it's  an interesting comparison.

Indeed and, SIPPs aside, workplace pensions often carry the additional incentive of employer contributions up to a certain level (9% of basic salary for me providing I pay a minimum of 6%).  Anyone not paying the employee contribution percentage necessary to maximise their employer conts is basically allowing their employer to underpay them.  

[Granny Danger]

42 minutes ago, resk said:

Indeed and, SIPPs aside, workplace pensions often carry the additional incentive of employer contributions up to a certain level (9% of basic salary for me providing I pay a minimum of 6%).  Anyone not paying the employee contribution percentage necessary to maximise their employer conts is basically allowing their employer to underpay them.  

I am sure that there is a maximum that employers are obliged to pay under the new regulations, don't think that it's 9% or that it's determined by what the employee decides to pay.  In terms of voluntary maximums I have no idea.