Should I Rent From Someone Who Built Their Entire Btl Portfolio Of 5 Properties In The Last 3 Years?

[Si1]

As per title, seem very pleasant couple, not necessarily sharp but DIY types and local.

My internal personality judgement says they're genuine so could be decent landlords, and the house is very nicely done up, but I worry about their likely gearing.

Thoughts? Candid honest brutal thoughts most welcome, I will not take umbrage, sock it to me

[Si1]

In Leeds btw, reasonable suburbs thereof

[Butthead]

I would. Their potential gearing is far more their problem than yours, it's possible they may have to end your tenancy in future but any landlord can do that for all sorts of reasons. If they seem nice, if you like the house and the price, then go for it.

[The Knimbies who say No]

Tricky call, I wouldn't necessarily be put off by that but it might involve you having to tell them to do one if they take a poverty later 'raise the rent' approach to square their financing *if* they are highly leveraged.

Lots of things can happen in the meantime though, I was feeling well positioned with an unleveraged LL but it seems quite possible I'll be moving again in late 2016 so planning for the medium term is not really always worth stressing about.

You could just charge them 200 quid to do a credit check

Another factor is whether they have built up sufficient experience to be suitable LLs, however nice they appear. I am having slight issues with a newbie LL who clearly has not run through various mundane scenarios that crop up when having humans in a property and how the law states they should be resolved. Having to have a discussion in the aftermath of an incident best described as 'one of those things' can be stressful if the view is taken that any shortfall in understanding ones responsibilities, and the attainment of appropriate insurance cover, can always be squared with recourse to someone else's account, irrespective of the crystal clear legal position.

Edited January 23, 2016 by The Knimbies who say No

[Bland Unsight]

Don't do it. Their margins will be thin. Given what is coming (Clause 24) they will in due course be optimistically trying to push the rents (and Section 21 if you don't want to play) or selling up (Section 21 regardless). It's daft to sign up with somebody who may well be causing you move along, or moving selling up from underneath you within 24 months. That said, how light does your household travel? If moving every 6-12 months is not a concern then one AST is pretty much as same as any other.

[rxe]

Catastrophic problems resulting from their gearing won't show up on your doorstep for 6 months at least, and if you are in and looking after the place, then you'd be the last to be sold. If they manage to rent all of them, then they won't have a gearing problem. Well, probably won't, none of us have visibility of their finances.

If the place is nice and the price good, then rent it and stop worrying...the alternative might be going with a less pleasant LL who will kick you out for some random reason at the first opportunity.

At the risk of raising the ire of those who see me as being from the other side, we've recently been letting our place in London out. My job has very variable locations, and for the next 6 - 12 months I am likely to be out of town. So you toddle along to the agent and tell them that if they have clients wanting a short term, semi furnished rental, we could do a deal. Who do they continually show it to? People wanting an unfurnished 24 month rental - when we say to the agent 'what happens when I come back to London in 9 months', the answer is 'you have a 6 month break clause, you can kick them out'. Hmmm.

Edited January 23, 2016 by rxe

[Si1]

Thanks for your candid views. Much appreciated from all.

[Guest TheBlueCat]

At the risk of raising the ire of those who see me as being from the other side, we've recently been letting our place in London out. My job has very variable locations, and for the next 6 - 12 months I am likely to be out of town. So you toddle along to the agent and tell them that if they have clients wanting a short term, semi furnished rental, we could do a deal. Who do they continually show it to? People wanting an unfurnished 24 month rental - when we say to the agent 'what happens when I come back to London in 9 months', the answer is 'you have a 6 month break clause, you can kick them out'. Hmmm.

So almost all letting agents are *****s, nothing new there.

[19 year mortgage 8itch]

Don't do it. Their margins will be thin. Given what is coming (Clause 24) they will in due course be optimistically trying to push the rents (and Section 21 if you don't want to play) or selling up (Section 21 regardless). It's daft to sign up with somebody who may well be causing you move along, or moving selling up from underneath you within 24 months. That said, how light does your household travel? If moving every 6-12 months is not a concern then one AST is pretty much as same as any other.

Not an easy call to make if you have little relative choice and I think you are being too harsh. If this is a forced or voluntary move, to do so you have already put yourself in a state of readiness. The key is to understand that and try to maintain it.

I would do it but I was daft enough to stay in a rental I didn't like for 4 years hoping to get my marching orders for 3 on the years in a statutory tenancy l, just because it was cheap.

[Bland Unsight]

Not an easy call to make if you have little relative choice and I think you are being too harsh.

That's fair comment. Obviously, if the options are not great then taking a chance may be the order of the day.

[lastlaugh]

Negotiate a longer lease.

[catdog1121]

You have no idea about their situation, they could have inherited a lot of money and may not actually be very highly geared... If they have a few properties they are clearly not fly by night types and if they have entered the market recently then BTL mortgages have been quite strict, although the new tax changes might affect them in the coming years, I would say they are no more of a risk than any other landlord, it is usually the ones at the lower end of the market that have geared the most.. So I would say if you like them, you like the house, you can afford it then go for it and don't worry about it.

[Exiled Canadian]

I would ask them for a 24 month assured tenancy (my understanding is that 6 months is the minimum but that the parties can agree a longer period - someone please correct me if I'm wrong). They should want a secure tenant if they are highly leveraged, and with a long tenancy if the house is repo'd you'll have a strong hand trying to buy it for cheap (ie. just the 75% of purchase price the bank will likely be owed).