BTL – Update

Well, my new tenant is denting my rental income by reporting loads of things wrong with the property and wanting them fixed. I’ve had nearly £1,000 worth of expenses on the BTL this month with maintenance costs in addition to annual insurance and gas certificate renewals. This goes to illustrate that BTL isn’t straightforward.

Since I started out with this BTL “Project” I have cumulatively made 3% from the original investment – excluding tax considerations. I do wonder if this is really a good way of investing and the budget changes may make this a losing game. It sounds as though it will only work for those who own the property outright. Everyone says that BTL is for the long-term,  I did speak to a few landlords before I took the plunge who gave me the highlights and lowlights of being a landlord. I have planned to stick this out until the end of the mortgage fixed interest term and then review whether I continue to be a landlord or sell up. Interest rates, new tax rules and financial situation at the time will only tell.

I guess I feel a little frustrated as I can see these expenses on this month’s budget sheet and although it is coming out of my rental account it does show how unforeseen expenses can knock your spending when you are trying to live off a passive income stream.


4 thoughts on “BTL – Update

  1. Sorry to hear that you’ve got a fussy tenant and that you’ve had an expensive month. Earlier in the year, I had to sort out mould in my BTL bathroom – it first time I’ve had to redecorate and fortunately, I got a decent quote so it didn’t cost an arm and a leg!

    “It sounds as though it will only work for those who own the property outright.”

    Or if you have a cheap property up north where you get much higher rental yields.

    The recent changes in the budget haven’t really affected me, aside from the wear and tear calculation.

    It does seem like a good idea for you to review the situation as you get closer to your fixed rate mortgage.

    • Hi Weenie – thanks for stopping by and your comment, it’s just one of those things. It is part of the ups and downs of being a landlord. It is useful for those readers considering rentals as an income stream as part of their FI plans. These expenses will be part of the wear and tear aspect of the balance sheet so I shouldn’t moan too much, I should be OK at the end of the year.

      My rental is in the Midlands, so not as cheap as those ‘up North’ but not as expensive as those ‘down South’ – 🙂


  2. Yes, why is it that you can have a tenant in for ages who seems more than happy and then you get in someone new who finds all kind of things wrong.

    I feel your pain (a little) as we’ve had to buy a new washing machine this month, However this has been after 6 months of pure profit from our rental (apart from the tax). We own it outright and so won’t be affected by the budget changes apart from, like weenie, the wear and tear allowance.

    Our yield (after expenses) is about 3% too but I think we could probably get a higher rent if we pushed. The flat wasn’t really bought as a “business” move – more as a bolt hole for anyone in the family (sons, parents) who needed it, so I tend to think of any profit as a bonus. We aren’t currently considering selling up, but ,as house prices have done so well recently I admit it is sometimes tempting to take the profit and invest the cash for a much easier life.

    (Whatever you do, don’t watch “Nightmare Tenants, Slum Landlords” on Channel 5 – it will take all the logic out of your decision on whether to continue with your rental or not :-))

    • Hi Cerridwen – glad you stopped by – hope you are well?
      I haven’t checked out the detail to the budget changes but thought it only affects the mortgage relief, I didn’t think it changed any of the other aspects of wear & tear expenses?

      The landlords I spoke to before I took the plunge said these stories of 8% were very specific to certain areas only, mainly up North and for those who treat rentals as a business. It seems that a 3% yield is the norm. If prices keep going upwards then there is always the temptation to sell and use the money on other priorities. It is nice to have the option available.

      I have watched one! I don’t intend making a habit of it 🙂 It reminds me of my student days renting some very dodgy multi-occupancy houses with poor conditions but rents students could afford to pay. In the days when you could actually received a student grant rather than a loan.


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