Any landlords on here?

[original guvnor]

I take OP means residential rather than commercial? Probably safer for the uninitiated but lower returns.

Interesting thoughts OG , i know you deal day to day with commercial property but would you say it was a much better return than residential especially given the higher overheads on legals & insurance ? Not to mention the higher taxes incurred on profit if selling whole ?
My father has a decent sized high street commercial property bought 35 years ago , he's 70 now & wants out .Its fully occupied longterm to 5 separate tenants on longterm leases with gross income of £47k . Three different valuations he received to sell as a rolling business including the property ranged between 9% & 12% of the yield .
He started 18months ago at £495k / its now at £425K & still no interest :|
Would you say its overpriced in that commercial yields should be much higher meaning he needs to drop significantly ?

Andy, With commercial property there are very big returns potentially but it is also something that requires a lot more knowledge, a much keener eye and a little slice of luck. It's not a place for the faint hearted really.

There could be lots of reasons why your father has struggled to exit. I'd be happy to discuss in more detail via PM if you like but things like the covenant strength of his tenants, the quality of the immediate location, the potential of that location and the economic strength of the town it is in would all play a part. A lot of commercial landlords have got the mother of all hangovers coming, especially if they have property in what might be termed 'secondary' towns (like my town for example) because the growth in online is making retailers reduce their network of stores. That means their rent aspirations are way out and therefore so are their freehold valuations.

 

[RoyE]

Commercial property attracts rates, even when empty whereas domestic unfurnished doesn't.

 

[envy]

Commercial property attracts rates, even when empty whereas domestic unfurnished doesn't.

due to changes in council tax rules, this is no longer the case in many regions. even an empty, unfurnished property will now be liable for council tax without an exemption period

i have a number of properties that i let out and from experience i always go for tenants who can pay 2 months rent up front, always let out the property unfurnished and keep all fixtures and fittings clean and simple so there is little left to damage. i have been doing this for about 7 years now and although i had issues in the beginning as i was inexperienced, you pick up things over time and now its relatively straight forward

 

[Geezah]

I have been buying residential investment properties to build up my portfolio since 1989 all over the UK and I continue to do so. I am also a mortgage broker dealing with all types of mortgages and insurances. The devil is always in the detail and generic advice may be good but can't beat targeted advice. PM me with your number if anyone wants to talk in detail.

It is vital to ensure you have the correct insurance in place, don't give the insurers any excuse not to pay!

I have to say that since buying my first residential investment property I have never looked back and they provide me with a substantial cushion and with rents going through the roof and mortgage rates bottoming, the positive monthly cashflow is very nice indeed.

There are many strategies to choose from and as with all things the time to think about your exit strategy is now, before you get started.

I'm in for the long term, obviously and unlike most here, ALWAYS let out my properties furnished as this attracts a 10% relief off the tax bill, frankly it's a no brainer.

 

[dr_john]

Commercial property attracts rates, even when empty whereas domestic unfurnished doesn't.

Rates payable on business properiies with rateable value of less than £6000 are zero at present, until end of March this year.

I know, I've got one. Waiting to see what happens after that!

 

[RoyE]

Commercial property attracts rates, even when empty whereas domestic unfurnished doesn't.

Rates payable on business properiies with rateable value of less than £6000 are zero at present, until end of March this year.

I know, I've got one. Waiting to see what happens after that!

I bow to your superior knowledge. We only have the one residential let as we have sold all commercial. The information will be useful as and when the apartment is empty.
Thanks

 

[Geezah]

Another good reason to let your properties furnished is that when they are untenanted, there is a reduction in the council tax that you need to pay. This is the case with my local councils, you'll need to check how yours treat the situation.

ERROR on my part, its the other way around! See my next post.

 

[Toe-side]

Good source of info forum and discussion.
Like this forum some one has had the issue before or can provide help
http://www.property118.com/

 

[mr wilks]

Another good reason to let your properties furnished is that when they are untenanted, there is a reduction in the council tax that you need to pay. This is the case with my local councils, you'll need to check how yours treat the situation.

A tenant with his own furniture is more likely to stay longer & treat the place like home , furnished accommodation invites the moonlight flitters & also a higher cost in setting the property up & of course maintaining furnishings

I do a lot of work (Joinery) for different landlords locally & there is only one who rents his properties furnished :wink: he is also the one who has most borrowings on his portfolio & does it to get more rent per month which in turn appears to give the property a higher yield to value which in turn enables him to remortgage to release more funds

Last recent conversation i had with him he had borrowings of over £1million but would sell tomorrow if someone offered him £100k :wink: clever investor or busy fool ?

 

[Geezah]

Another good reason to let your properties furnished is that when they are untenanted, there is a reduction in the council tax that you need to pay. This is the case with my local councils, you'll need to check how yours treat the situation.

Ignore the above, I was having a brain fart! It is in fact the other way around.

Just to be clear, if its unfurnished and empty you get a council tax reduction. If its furnished, you dont.

Still a no brainer ref 10% tax releif long term if furnished.

 

[Geezah]

Another good reason to let your properties furnished is that when they are untenanted, there is a reduction in the council tax that you need to pay. This is the case with my local councils, you'll need to check how yours treat the situation.

A tenant with his own furniture is more likely to stay longer & treat the place like home , furnished accommodation invites the moonlight flitters & also a higher cost in setting the property up & of course maintaining furnishings

I do a lot of work (Joinery) for different landlords locally & there is only one who rents his properties furnished :wink: he is also the one who has most borrowings on his portfolio & does it to get more rent per month which in turn appears to give the property a higher yield to value which in turn enables him to remortgage to release more funds

Last recent conversation i had with him he had borrowings of over £1million but would sell tomorrow if someone offered him £100k :wink: clever investor or busy fool ?

It's always down to the detail. If you are a long term landlord then for the minimal cost to furnish a place if you do it cleverly, the amount you make from the 10% tax relief over the years combined with higher rents should easily outstrip profits from unfurnished returns. Of course, as always you have to choose your tenants carefully.

There are so many factors at play and granted, one size does not fit all. Eg. I find in my area I want families in my houses as they tend to stay forever, they want stability, and so would any landlord. With flats, the tenants tend to be more transient. I am drawing on my 26 years experience investing in my particular areas as it affects my portfolio.

 

[Paulwirral]

Last recent conversation i had with him he had borrowings of over £1million but would sell tomorrow if someone offered him £100k :wink: clever investor or busy fool ?[/quote]

Penniless millionaire syndrome , I know a few like that , I once had a conversation with a guy who would only let to Eastern Europeans a few year ago , reasoning being that renting is normal in their home country and they view his properties as a home , not a short term stay , hence they tend to look after them properly .
I've seen people do well out of property but I've also seen the downside , I converted a bungalow into a 3 bed dormer for a mate and the couple that rented it never paid a penny rent from day one , took 9 months to get them out and left it wrecked :thumbsdown:
I know a few others who have that problem , I can also remember interest rates at 13.5 per cent for a normal mortgage