After a couple of bereavements I am very lucky to have some cash sitting around, and am thinking of getting a flat in Edinburgh or holiday cottage/flat in Perthshire or Borders.

I’d like to hear people’s thoughts and experiences. It feels a bit risky but a good investment. I’d also be pricing locals out of buying but would be a responsible landlord.

be clear in your head exactly why you are doing it and what you want to get out of it.

Buying now you will be lucky to make a good return on the investment but if you can do it without debt it may be worth it

If you go for a holiday flat in the boarders you will need an agent. Good agents are hard to find and expensive. I have an agent lined up for when I let out my flat as a holiday let in a year or two. He takes 30% for a rolls royce service

I long term rental in Edinburgh you may not need an agent and its much easier to manage.

Do your sums on getting 9 months rent a year. If you get 12 its a bonus but if you have issues it will help you not get in trouble

Remember you have to declare it for tax and you are responsible for upkeep which can cost and a good landlord has the property to a high spec – which costs. £1000 for the fire alarm in mine plus a few hundred to get all the certificates and £500 to bring the electrics up to spec.

Ask a little below market rate so you get tenants easily and have a choice of tenants.

WE make around £7000 a year off a wee one bed flat – but I have spent the best part of £20 000 on it in the last 2 or 3 years to get it to that spec. Before than investment it got £4000 pa

How long do you want the investment tied up for? Its not quick to liquidate your cash if you do this

I don’t know scots tenancy law but we have corp memership of the NLA. I think for individuals its less than £100 a year. They give you all the contracts, there is a telephone hotline, its really really good. You won’t need a lawyer.

In scotland we now have a differnt tenancy. Its more secure for tenants than an AST but you can just download it off the government website for free along with all the guidance. You have to register as a landlord as well. Yu also need energy certificates, gas and electric safety etc etc

Its not just the contracts though, its the advice, how to go about giving notices, what to do if..

Landlord here, both long term and holiday lets. As above if debt free you will tick along at c 3% and have a fair return for the outlay. Watch out for corbyns land grab though if he ever gets into power. It’s a real threat, I know some landlords who are deliberately churning tenancies to prevent them accruing rights.

If you get one in Edinburgh, AirBnB it. About double the return from a longer tenancy.

Experience as renter:  I would think you are better off getting a smaller place and spending a lot of money to get it looking good if you are doing holiday lets.  People will pay an astonishing amount of money to stay in a nice place during their holidays and are also likely to book again.   You have to keep the place in better shape than you are likely to keep your own house in e.g. no-one wants a random selection of plates, cutlery and hand me down kitchen stuff even though that is clearly just fine

Experience as landlord: Unless you have a lot of time or really enjoy looking after a second place then use an agency.  It will cost but you are buying time for yourself and there really isn’t enough of that going around.  Some agencies are good, some are shit, some start good and turn to shit :(.  Not sure that price is an indicator.   I can tell you at least one to avoid in Edinburgh if you want

Blimey thats interesting, I would say avoid agents like the plague, they are just middle men and pass on all the problems to the LL, often know less about the law then LL and are just plain crap.
It would be interesting to hear what issues you have had that an agent solved which you couldn’t have done yourself?

PS NLA I mentioned up there do cheap referencing too.

5plus8 all that advice is available on the government site I think and an English association will not know the difference in scottish law such as no right to rent / reside checks are needed in Scotland. Then on top of that you have also the councils requirements to meet – even if it is not an HMO and HMO regs are much tighter in Edinburgh than in many place. 3 unrelated people make it an HMO in edinburgh IIRC

its one of the SNP changes – making tenancies more secure and more transparent and housing safer.

https://www.mygov.scot/housing-local-services/landlords-letting/being-a-landlord/

Just use the agents for tenant find and do the rest yourself. I use the contractors they use so I have some collateral, they turn up, do the job and get paid a fair sum. Churning your contractors will cost you dear, just stay loyal to them they will be loyal to you.

You can manage them from a distance, I live in another country. With whatsapp, photos and banking you can manage them just as well as living nearby. I think my tenants quite like it that I am not just going to pop round.

On agents – they are generally shit but if the property is miles away from you then an agent may be the lessor of two evils, 5plus8 you are doing this fulltime are you not? an agent is also useful if you are away on holiday. Again the agent we are going to use for the holiday let on the flat we live in will also be looking after the long term rental while we are on the other side of the world.

For holiday rentals a decent agent will organise all the cleaning, meet and greet and all that stuff. IE the folk I have lined up do two cleans a week, do a meet and greet service, have a bottle of bubbly and a bowl of fresh fruit in place for every new rental, provide all the linen, that sort of thing. Although they take 30% it means the holiday let becomes completely hands off.

In your position Al I would go for a good quality flat for long term rental close to your own house for ease, take all the info and guidance off the government website so yo do not need an agent and let at market rate minus 10% so you have plenty of choice of tenants and no vacant periods. thats what we do and have had no significant issues

i wouldn’t touch air b&B with a bargepole.

Infact Al – I do not know how much you have but my neighbours flat is available for sale – needs investment but could be a great proposition both in terms of rental and capital gain. PM me if you want to know more or know more about my experiences

I would never use an agent to find tenants if I could avoid it. I get mine from gumtree. Last lot I had a tenant withing a couple of hours of advertising it

Never forget its your house but their home

Poolman – the new scottish tenacy is more secure for tenants ( but does not go far enough in my view)(. churning like yo mention would get you into real trouble in Scotland now.

Corbyns land grab – what on earth do you mean?

ASTs stink in my view and its high time England moved to come into line with scotland

https://www.edinburgh.gov.uk/info/20058/private_housing/373/private_landlords

tjagain – it is a part of my job, our business owns quite a few rental properties. However it doesn’t take much time which is why I think agents are a waste of time. We used to use them but when it took over I soon realised what a scam it was..

an English association will not know the difference in scottish law

Indeed which is why I mentioned the difference in my first post – I just assumed there would be a Scottish version of NLA, however it looks like your gov have done the decent sensible thing and taken all the bullshit out of it. Oh to be Scottish.

I’ll pm you tj.

I don’t want to airbnb, it’s.jilling cities for residents more than lets

Hassle, hassle, hassle, some people are pigs. Sold.

Meanwhile … https://forums.landlordzone.co.uk/forum/hmo-multi-occupation-questions/1083810-tenant-did-a-poo-in-the-sink

Thats brilliant 5plus8!

Corbyn is proposing giving tenants the right to buy from private landlords at a discount. It’s a land grab in all but name. Whether it comes to anything I have no idea but I know landlords who have taken action already.

Ah that – a damn fine idea and one I have no issue with at all. After all if its good enough for council tenants……………..

the folk you know are shits for churning tenants and show why secure tenancies are needed in England. Churning tenants would now be illegal in Scotland. surprisingly 🙂 the amount of private rented has not dropped as any decent landlord should welcome secure tenancies. thats despite the cries of armageddon from the landlords

Don’t forget it’s income so potentially higher tax brackets, no child benefit etc.

Capital gains when selling the property etc. etc.

Yes you nailed it, rental income taxed at marginal rates and cgt liability. Latter dies with you though as iht kicks in, thank God I won’t be around to see my tax bill.

Just look at rightmove theres a fair few ex btl properties for sale, not an avalanche by any means but a handful. Tbh the rental reforms have not bitten yet and there’s worse to come. I am a buyer so keeping my powder dry.

Al – remember that housing is a devolved issue – so all the stuff about potential changes to rules does not apply to scotland – partly at least because Scotland has already moved to a system that is a bit better for tenants

Ta all. There’s 4% 2nd property tax now I hear?

I dunno about Scotland but in England you pay extra stamp duty for N+1th home. Is that what you mean?
This is handy https://www.knightfrank.co.uk/buy-to-let-stamp-duty-calculator

That’s correct Al, I almost got stung by that. If you sell one of the properties with 12 months, you don’t need to pay the tax.

I mistakenly thought it was 24 months and almost had to pay it but missed it by a couple of weeks.

It would be interesting to hear what issues you have had that an agent solved which you couldn’t have done yourself?

I don’t live nearby and they can generally find a new tenant within a week or two of the old one leaving, they arrange all the repairs and maintenance, they arrange the annual checks of stuff.  Yes I could no doubt do it cheaper and better myself but that would take time and no-one enjoys having to find a plumber at a moments notice.  It’s not cost efficient but it works.  I never hear from the tenants, ever.  The agent deals with it all and occasionally asks me questions when i need to buy new stuff

Ah that – a damn fine idea and one I have no issue with at all. After all if its good enough for council tenants……………..

Argghhh, I agree with TJ. the end is nigh (well actually i agree with tj on a lot).   In this case the proposal seems to be for landlords who don’t keep their properties up to spec so I’m not sure it is as much of a risk as people imagine

There’s 4% 2nd property tax now I hear?

The council tax in Edinburgh is also double if you don’t rent it out IIRC.   There is some leeway if you are having works done though

I sold a 1 bed BTL flat in leith and bought a 2 bed 2 bath Holiday Let in Aviemore.
Tax rules on furnished holiday lets are now more generous than btl.
The Aviemore place has been occupied >90% of the time since June and even with the changeovers costing nearly £100 a time (changeover + laundry) it’s still easily working as it should for my pension.
I’m considering another maybe in the East Neuk of Fife.

Right to buy is evil.

Depletes social housing stock, turns housing into an investment.

Just wrong, we should all be renting like on the continent.

For that we require secure tenancies and fair rents.

No pm al