Is it worth doing a "buy to let" as an investment for our pension

terribull However, I know that I derive an income from my property and if I were to sell that would come to an end and I would just be running down capital

If you sold the property you would have capital to invest, and could get a return on it.

I think you would probably get a better return on stocks & shares ISAs & a financial advisor would help you choose a balanced portfolio and about whether you want low or high risk investments.

The current annual limit is £20K per person per year, so you & your partner could invest £40K now and another £40K after April.

Typically you would get a return of 3.6 - 4%.

An advantage of ISAs over buying property is that its easier to access your capital if you need to.

I inherited a flat from a sibling who died, which I let out. At the moment I have some very good tenants, a retired couple who have told the agents they want to rent long term. They have been there for 18 months, they paid the first six months' rent in advance, and on renewal paid one year up front too. If they renew again, which I hope they do, inspite of management agent's advice on the last renewal ,I will not put up the rent as I value good tenants over an increased rent. As far as tenants go, I have had a mixed bag, including one of my sons for a short period, who paid mates' rates and shared it with a rather unreliable friend. Prior to that I had two flakey young girls who were consistently late with the rent, although paid it in the end. They also let condensation build up because they were somewhat inept. My first tenants were a couple of young doctors who were also good tenants, although one of them did manage to put the exact image of an iron via a burn mark in the smaller bedroom,clearly no ironing board although he admitted liablility and was happy to have the cost of that deducted from their deposit. It caused us much mirth at the time because his name was Dr Burns

My flat is fully managed by a letting agent, Their fee is 11% of the rental income plus VAT. The flat is way down in Surrey about 25 miles from where we live, if it were nearer then maybe we would manage it ourselves although of course that can be a hassle. The managemet company have a panel of workmen who they can send round asap if there are any domestic issues. It's their responsibilty to place invest the tenants' deposit. They make a retention out of the rent money against any necessary work that may occur during the tenancy. As the previous poster has mentioned each time a new tenant takes up residence there are a raft of reports required such as Legionnaire's, electricians, fire alarms and an independent inventory, which is quite important as it provides photographic evidence of the state of the property so when the inventory is compiled again at check out it should, but doesn't always negate any issues regarding damage, but not everyday wear and tear, carried out by tenants. All in all the setting up cost with the management company are considerable and can take a very large portion of the first month's rent. Even with an ongoing tenant they still charge a hefty sum to draw up a new renewal agreement each year. It's also wise to take out an insurance against tenants defaulting on rent, this covers the cost of legal fees to regain possession of the property and recover rent lost (a worst case scenario) The owner is also liable for the management/service charge which most blocks of purpose built flats, in my case that is paid twice yearly.

If the flat lies empty, I had a few months between tenants when we were redecorating and up dating, then after a few months grace, the owner is liable for the Council Tax too so you need to bear that in mind.

It's certainly something to consider with such low interest rates, although you have to build in costs you may not have taken into account op and of course no doubt you will have researched the area where you intend to buy as to the market and how quickly properties are snapped up for rent. However, I know that I derive an income from my property and if I were to sell that would come to an end and I would just be running down capital.

With agents' fees and legislation regarding legionnaires disease and checking immigration status, plus an ageing gas boiler and a tenant (with a small child) splitting up from her partner and no longer being able to afford the rent, I couldn't get rid of my dear, late mum's house fast enough when the last tenant handed in her notice. I sold the house at a loss because it was tired and needed tlc (but didn't pay capital gains tax). I rented out the house for several years and used the rent to top up care home fees until Mum died.

I have been lucky in finding a good, independent financial adviser, and although investments from the sale of the house don't quite match the rent, they come pretty close over time and the sheer relief of no longer worrying, no longer self certifying with the HMRC, knowing that my agent wasn't doing his job properly and wondering how I could dismiss him for another (one agent disappeared with 2 months rent). My experience has not been a good one.

I was emotionally attached to the house as well, if you buy a property for renting, you will probably be more business-like than I was. But do your research carefully, there are lots of legal pitfalls and try and buy a new property with building guarantees.

I would also add that it is worth keeping up the search for a good financial adviser. Keep trying until you find one that you can trust (they will take their cut, but the advice I get is worth every penny).

We have a Buy-to-Let property and it has been an excellent investment over the past 3 years. We've had no problems with our tenants. It is empty at the moment so we are redecorating (our choice) and will have tenants in again by February. We use a small, local management company.

buy more than one use your money as deposits and get mortgages ,that way you're using other peoples money and if it doesn't work out you can sell and get your deposits back ..hopefully with a bit of extra profit.We have several and in the 25 years we've had them we've rarely had problems in fact only one tenant who skipped owing rent and one who had to be asked to leave for other reasons.Banks aren't the best way to go,find a good mortgage broker NOT financial adviser ,we live in Scotland but our mortgage broker is in Dorset and he's brilliant,Buy to let mortgages are very low rates now so monthly profits can be good.Take advice though and if I can be any help pm me

Thanks for sharing all your experiences. It really confirms what I suspected. Renting can be OK - but still with extra costs from time to time, or it can all go horribly wrong.

We did see a financial advisor a couple of years ago, and established that we were low risk takers. We didn't think he was that good, I think we need to talk to another, preferably recommended. I hadn't thought of talking to banks, stupid I know.

I bought a small buy to let 4 years ago. Did a lot of research in my local area before I bought and have had no problems with tenants. An agent collects rent but I do all the decorating and a lot of the repairs between tenants and am over 70. It only has two bedrooms so I don't have big families. I take pets which a lot don't so always seem to have tenants with pets. Do you research and with luck it can work.

The fact that you can buy for cash suggests that you have £100k plus to invest and I assume that accounts for most of your assets. Under the circumstances it would be very unwise to put all your eggs in one basket. You need to spread your investment across a number of different investments so that if one loses value it is not a catastrophe.

You need to own more than one property to begin to be sure of a steady income. Most buy-to-letters are in the market for capital growth rather than the income. I had a buy-to-let for about six years and I did it for the increased value of the house in a rising market rather than the income, which was not much after all the costs were taken into account, including vacant periods, insurance, maintenance and repairs, regular statutory checks, management costs etc.

You do not say where you live, but assuming you buy a 3 bedroomed Victorian terrace, the rent you get could be as low as £300 a month in some areas, that could easily be entirely eaten up by costs.

The costs of purchase have been raised by an increase in stamp duty and when you do get the house you will first have to make sure that it meets all the regulatory rules for letting, which now include a minimum energy efficiency rules as well as having electrical and gas safety checks. You may well have to get the house redecorated, put in new white goods and do other repairs. If you decide to let furnished there will also be the cost of furnishing. Tenants will expect new modern furniture. The cost of buying and doing all this could be in excess of £10,000 over and above the purchase price.

Personally, I would not advise buying a buy-to-let in your circumstances. The alternative needn't - and shouldn't - be putting it all in a savings account. If you do not know how to find a good financial adviser, talk to several banks and building societies. They will have a range of their own products, savings accounts of different kinds and bonds, which are unlikely to get you as good an income as a financial adviser would but will be safer. Spread your money across several of these institutions and do not have more than £75,000 in any of them. That way the money will be as safe as it can be and give you a better income

I understand the negative comments here and wouldn't want the risk and hassle myself but, I know a number of people who have buy to rent properties and haven't had bad tenants. The other positive is that houses are usually a good investment over the longer term.

Coolgran we have about 11-13% but we are in a higher risk category than you. Over the long term it generally outperforms property. Our financial advisor just gets on with it and never rings when we are on holiday.
If you buy to rent and use a management company they charge quite a lot. We found ours wasn’t brilliant so sacked them.

I was left a house by my parents my idea was to rent it out and I was advised by a few different people to be very careful You can end up with bad tennents, you might have it empty in between people, they can be hard to get out if they prove poor payers or bad tennents damage can be done I decided it was not worth the hassle and worry so that would be my advice too

We have a couple in York, and use a local agent. It certainly helps our income,but you need to be aware of things going wrong, only this morning the agent rang to say a tenant boiler had stopped working so that will be a plumbers bill or (hope not) a new boiler.

Can be a lot of hassle late payers etc, plus you will need to pay for anything that need repair or replacement, redecoration between lets etc. So you will need some ready cash to keep it going. Leaving it in the bank is not a good option either, I think you need some financial advice. Perhaps look locally for some recommendations. Personally I would not put all eggs in one basket, but apart from that you pay your money and take your choice.

I think you would have to consider a property as a business, with the obligations that go with it, rather than something which will make you money without effort. The flat above mine has had a variety of owners, who have all let it out once, then decided to sell.

I have done this several times in the past and on each occasion it has made very little profit. What it did make was a lot of hassle. Needed a washer on a tap... key was stiff in door lock (WD40 sorted that). etc. The last tenants left (did a flit) leaving us with £1,500 damage, an empty oil tank that had been half full when they went in, torn kitchen vinyl, broken kitch cupboard doors. etc. etc. And a lot of dirt !! This was a nice house that had been my home. Took myself, dh and friend, 3 days to clean it out. Never again, it went up for sale the following week.

Are you aware now of the new Landlord rules and responsibilities that came in a few years ago. I'm not familiar with them myelf but it is probably best that you are aware of them.

I was a very good landlord but my faith in people was sorely tested.

The sale proceeds were invested after discussion with a financial advisor. Investment is in the 'safe' category i.e. no/very low risk, and has consistently over the past 10 years made us at least 8%.

Never again would I let out a property.

We have an apartment which we let using a management company who are efficient and local to the flat. Tax breaks aren't so good now but we'll keep it as it is in a high rental demand area. Have a look at property crowd funding which is the way we're going now. Usually a minimum investment required, typically a grand but can be less depending on the organisation, and we are in quite a few properties. Do a Google search and the main operators will come up. I found it quite complicated to understand initially (DH didn't!!) but now it's a no-brainer as you share the risk and it's managed for you.

We have an apartment which we let using a management company who are efficient and local to the flat. Tax breaks aren't so good now but we'll keep it as it is in a high rental demand area. Have a look at property crowd funding which is the way we're going now. Usually a minimum investment required, typically a grand but can be less depending on the organisation, and we are in quite a few properties. Do a Google search and the main operators will come up. I found it quite complicated to understand initially (DH didn't!!) but now it's a no-brainer as you share the risk and it's managed for you.

Ours have just cost us a fortune and now we are fighting to keep the deposit. I have to say tho that we’ve had some good ones. We’ve decided to sell so that may tell you what my feelings are at the moment. If you can get some long term tenants that look after the property well then it’s fine. Every time a tenant leaves you will have a period of no rent and you’ll have to go in and do some work which is a bother (it always happens to Suit them not you)
The government have been changing the rules and you now have to pay more for stamp duty on 2nd homes.
We have been getting a better return on our investments recently with no aggro but that isn’t guaranteed and you do need to be able to take the downsides of the market as well as the ups.

Could you stand the aggro if anything went wrong is what I would be thinking. Not all tenants are lovely!