eastrunner

Not sure if anyone is in a similar situation with rental property.

We bought a buy to let flat in 2014, put a lot of oursavings and decided on a 1 bed flat, Zone 2 area, its rented with no void periods. With an interest only mortgage.

Have an Estate agent who collects rent for 7% + VAT, wants much higher % to fully manage it. In my past experience I find that fully managed means they get more fees but forward you the email saying something is wrong and/or hire the most expensive plumbers or electricians etc….so directly dealing with the issues have some control of the costs.

With George Osborne’s tax changes on 2nd properties coming up (lesser interest deductions), not sure if we should keep it or sell it? Selling it now means 17% lesser on GBP. The area has held prices so we will not be losing money but gaining very little after capital gains taxes. Dealing with tenant issues is not without frustrations, recently ordered a new washing machine, and paid for the old one to be disposed, the tenant sends me a message to say there’s a problem and I have not paid for the ‘installation’and if they are to arrange a plumber to get it installed? ….yes to connect a hose to the sink and put the waste water outlet. They email me when the shower is seal needs to be replaced so I have to make the effort to ship a 7 pound shower seal from homebase or wicks on a weekend.

Really not sure what to do? The missus thinks we should sell it. A part of me thinks after Brexit article 50 the market may pick-up again and we can make a bit more money if we sell later.

Thanks

ER

Sabi Star

Best renter for a one bed. (or any bed.) is a single business women - least trouble. There are some agents that charge a flat fee for a year, if you can find one in your area - or agree lower rent to someone who will do their own maintenance. 7% is good.

Taz786

When I initially started renting my UK property, I agreed 6.5% annual rate and luckily my parents are still in the UK to manage if there is any issues.

However, the estate agent didn't provide adequate service with the first tenants and I took advantage and threatened to take legal action. We agreed for all renewals, there will be a 350 pounds charge whereas I would have previously paid 1300.

Anyways, I have learnt you can negotiate a better rate if you shop around.

Have you got another property in the UK? I only have one currently and wouldn't sell it as there is a possibility to move back in the future.

Millhouse

I always thought you were a financial adviser...

Anyway, the basic rule of property investing is... never sell. So by implication, this means that you only invest knowing that you will never exit from it.

This forces discipline on buying and therefore gives you a long-term-view when it comes to taxation and policy cycles - the effect of the current tax rules is not wildly different to what they were back in 2005.

Johnnyboy11

I'd be inclined to keep the UK property, given the expense and effort involved in buying it. I'd also make sure that I diversified the rest of my investments into other sectors, asset classes and geographic locations.

Out of interest, if you'd invested your money back in 2014 in a UK All Share Accumulator low cost tracker fund, you would have made around a 30% profit by now (10% a year on average). I doubt you will have made anything near that on your property investment, particularly when you factor in buying costs and recent tax changes.

Sabi Star

Although ''financial advisers'', banks and other parties interested to take your money say ''investments'' are about time and not timing - I would beg to disagree - many people who put money into equity funds before the crash of 2000 (such as in Nasdaq or Japan) have only in the last two years or so seen their money come back - or even have not done so yet in Japan.

Johnnyboy11

Or had you invested in Terry Smith's fund back in 2014, you would be 100% better off, for absolutely no effort whatsoever...

chipie

Hi, I've just arrived here in Dubai and have three rental properties back home.

Before coming out I extended two of the tenancies and created a new one for my own residence and amended the all to be 'self repairing' with the exception of structural, main plumbing and electrical. My residential property has a number of inbuilt white goods and the tenants are clear that any repairs are down to them, maybe you could introduce something similar?

I also have trusted plumber, electrician and builder who can attend if necessary.

Millhouse

Can you leverage them?

eastrunner

Thanks All interesting points so far,


@Millhouse nope not a financial advisor although I work in risk advisory, its always easy to comment on institutional investments and risks, personal money is harder.....


@Sabi Star, yes agree on timing I have a UK pension that's invested in a balanced fund earning less than money market rates


@Johnnyboy11 agree we should have weight other investment options, I think the brexit vote is the biggest game changers for UK property especially for the rental market


@ chipie yes definitely the contracts will get amended on renewal to say minor repairs are on the tenants.