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Delicate path to tread

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beeswax
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Re: Delicate path to tread

#151637

Postby beeswax » July 10th, 2018, 10:35 pm

GS, I'm sorry that I have no experience to be able to help but two questions jumped up in my mind that you don't need to answer..

One is why have you stayed in that place for 6 months knowing it was not safe to live in re electricity etc?

Second that you may NOT wish to answer and I ask it only because of your vast knowledge and experience in financial matters as posted on these boards...How come you have been renting all those properties and not buying somewhere? People that are flexible and mobile with jobs in various places on short term contracts probably do that and may be the case with you but isn't it financially better to buy somewhere and get the rise in values in prices that you wouldn't get by renting?

I think Redsturgeon's advice is pretty good that you both sit down and talk it through..

I was confused initially as thought you were talking about a third party and not yourself and not sure even now if that's the case...Possibly referring to friend and LL landlord threw me? Not that changes your questions though?

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Re: Delicate path to tread

#151650

Postby GoSeigen » July 10th, 2018, 11:32 pm

beeswax wrote:GS, I'm sorry that I have no experience to be able to help but two questions jumped up in my mind that you don't need to answer..

One is why have you stayed in that place for 6 months knowing it was not safe to live in re electricity etc?


Fair question, but in general one does not know these things: you suspect, or have a hunch or worry,while your normal life goes on -- and then something happens which confirms your fears. And then you insist on a full safety check and find that your worries were justified and you breathe a sigh of relief that you'd made a nuisance of yourself in order to get it all checked out.

Second that you may NOT wish to answer and I ask it only because of your vast knowledge and experience in financial matters as posted on these boards...How come you have been renting all those properties and not buying somewhere? People that are flexible and mobile with jobs in various places on short term contracts probably do that and may be the case with you but isn't it financially better to buy somewhere and get the rise in values in prices that you wouldn't get by renting?


Very similar answer to the first. I suspected and feared and had a hunch some 14 years ago that property was over-priced in the UK. Happen to live in the SE so that hunch turned out not to be too clever. Even so, if you look at the house we occupy as tenants: the landlords bought it in 2006 and are selling it now for 33% more. That's a whopping growth rate of 2.4% pa.Gross rental yield on this home is 2.5% -- plus LL pays to maintain it...
If I told you that our (non-property) investment return over that period has been more than 10%pa, then perhaps you will see why we stuck to renting rather than buying. Furthermore, renting has given us the flexibility to take two full years off to travel with the kids, which was priceless.


I think Redsturgeon's advice is pretty good that you both sit down and talk it through..

I was confused initially as thought you were talking about a third party and not yourself and not sure even now if that's the case...Possibly referring to friend and LL landlord threw me? Not that changes your questions though?


I agree, it needs to be discussed. We just are not in the mood to initiate it right now.

Sorry about the confusion -- I did set the scene initially in the third person in an attempt to present it neutrally. Our family are the tenants, the landlord's family is close to our family (e.g. our kids and theirs were at school together, we have many friends in common).


GS

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Re: Delicate path to tread

#151651

Postby Alaric » July 10th, 2018, 11:40 pm

GoSeigen wrote:If I told you that our (non-property) investment return over that period has been more than 10%pa, then perhaps you will see why we stuck to renting rather than buying.


For many of us, the security of tenure argument wins out. If you own, you cannot be thrown out by legal small print. It's a form of gearing to rent, that you rely on the returns from investing the capital outside the housing market exceeding the rent. As with all gearing it can both work well and fail badly.

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Re: Delicate path to tread

#151655

Postby beeswax » July 11th, 2018, 12:29 am

GS, Thanks for those two answers, much appreciated. I agree that taking two years off with your kids to travel is pretty fantastic which will stand them in good stead in the years to come. I wish I could have done that and its best when we are younger than old imho..

I suppose you could have bought and then let it for a couple of years but it can be a minefield as we see here..I have read just recently that tenants are going to get more rights with longer rental agreements which may or may not suit of course. Will you continue to rent or have a change of mind as possibly that could feel more secure, stop LL putting up rents and generally another appreciating asset to pass on? I tend to agree that house prices are very high and wonder how long that can go on? How about moving somewhere cheaper? Scotland perhaps?

Has the electricity been sorted now? They would have to do that in order to sell it as think that is part of the declaration that must be made in the sale documentation? ie part of the survey?

Best wishes and hope everything turns out and reading your many posts on here, I suspect it will...

Mike

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Re: Delicate path to tread

#151686

Postby GoSeigen » July 11th, 2018, 9:37 am

beeswax wrote:I suppose you could have bought and then let it for a couple of years but it can be a minefield as we see here...


The difference in risk is just phenomenal.

Rent a house, then go travelling:
-You have no property assets, no debt, just store your stuff in long-term storage. Capital in liquid, diversified investments. Nothing to insure, maintain or worry about.

Buy a house, then let it to go travelling:
-You have a house which needs maintenance and are exposed to property market volatility.
-You have a mortgage whose payments you must maintain.
-You cannot occupy the house until you have given notice to the tenants.
-You have to keep the tenants happy and hope they behave sensibly.
-You still have to store your stuff.
-Capital in liquid, diversified investments.
-Deal with tax, expenses and admin of all the above.

For years people have slated renting and seen property ownership as a get-rich scheme. I've loved renting and have no regrets at all.

GS

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Re: Delicate path to tread

#151690

Postby GoSeigen » July 11th, 2018, 9:54 am

beeswax wrote:Will you continue to rent or have a change of mind as possibly that could feel more secure, stop LL putting up rents and generally another appreciating asset to pass on? I tend to agree that house prices are very high and wonder how long that can go on? How about moving somewhere cheaper? Scotland perhaps?

Has the electricity been sorted now? They would have to do that in order to sell it as think that is part of the declaration that must be made in the sale documentation? ie part of the survey?

Best wishes and hope everything turns out and reading your many posts on here, I suspect it will...

Mike


A few questions here. Sorry others for OT.

We'll stop renting when buying is a significantly cheaper option for us, enough to compensate for the perceived disadvantages of owning a property. I don't subscribe to the view that a property is intrinsically an appreciating asset. Sometimes it is. Other times it is not. I've no idea when prices will normalise. I do know that rental yields have been higher in the past and they could easily revert. While they are low we are happy renting. Incidentally this has become a trend; home ownership ratios are at their lowest since the mid 1980s, having peaked around 2005.

When you have kids the idea of moving somewhere else takes on a different complexion. Maybe when they are gone. We were on the brink of buying a property and settling in South Africa this time last year... didn't work out. We live in a glorious part of the country and are loath to move on!

The electricity has been fixed by people we trust. They did a great job and we have thanked the LL for getting it done. I'm not sure certification is required for a sale or even letting, but surely advertising a newly tested and maintained electrical system is better than uming and ahing to buyers' queries? A full survey would certainly have identified the more obvious problems e.g. the live severed external mains security-light cable.

GS

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Re: Delicate path to tread

#151692

Postby vrdiver » July 11th, 2018, 9:59 am

GoSeigen wrote:For years people have slated renting and seen property ownership as a get-rich scheme. I've loved renting and have no regrets at all.

GS

In mainland Europe, this is the normal state of affairs. It's interesting that Thatcher promoted home ownership, whilst Tebbit was promoting people to "get on their bikes" which would have made home ownership more of an albatross.

In today's economy, where jobs seem more and more volatile, being tied to a single location makes less and less sense. Good landlords provide a fantastic service.

Property was indeed hyped as a way to get rich. Some of us will remember dinner party quips along the lines of "my flat's earns more than me" etc. and for a while, like a share that rockets, property owners were in the right place at the right time. As has been mentioned already though, for many of today's owners, the value is not so much in the resale, but in the security that ownership brings.

Like most markets, some people want and need flexibility, others want the security whilst still others want an investment. GS has found a solution to investment, living space and lifestyle that doesn't need property ownership: much better than buying and discovering that the purchase has become a significant barrier to what you want to do!

Hopefully, the current rental issues will be a small blip and both you and your landlord (and friend) will be able to move on without it leaving a scar on the relationship.

VRD

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Re: Delicate path to tread

#151739

Postby Ashfordian » July 11th, 2018, 1:13 pm

GoSeigen wrote:A tenancy is agreed between two parties who have been close friends and have many friends in common. Bad idea, I know, but it's already done. It should be clear to both parties that a Tenancy was been created between the amateur and reluctant landlords and the long-term tenants (not a licence). The tenants were made aware in advance that the landlords want to put the property on the market and may therefore give notice at some point. The tenants made clear in advance that they would prefer to stay as long as possible. Bad idea no.2 (clash of objectives) but it's done and the arrangement suited both parties at the outset. No agent was used.


I fail to see what you are gaining here. Possibly a couple of months extra in this house but at what cost?

You say they were close friends and that you have many friends in common. All I see you doing is alienate yourself from this friendship group.

Friends help each other out but what do you think the chances of this happening now if they think you are going to become all legal ahead of being reasonable that exists between friends.

This thread reads as if you have dug yourself into a hole because all you care about is the legalities. I only see you losing out going forward

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Re: Delicate path to tread

#151765

Postby GoSeigen » July 11th, 2018, 3:46 pm

Ashfordian wrote:
This thread reads as if you have dug yourself into a hole because all you care about is the legalities. I only see you losing out going forward


Forgive me asking but what hole do you see?


To summarise where we are now:
-we've received a letter asking us to leave the property in two months because (quote) "unfortunately I [one of the LLs] need to move back into the property".
-we've responded saying we would like to discuss but are looking for a new home on best-endeavour basis i.e. will not move out on that date if it leaves us homeless.

Where have we gone wrong? How would you suggest not giving the impression of "becoming all legal ahead of being reasonable" in this situation?

Thanks,

GS

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Re: Delicate path to tread

#152654

Postby bruncher » July 16th, 2018, 12:21 pm

Hi GS

Have you established what the prospective buyer of the house intends? Is it worth asking, in case they want to rent it out and you could stay on?

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Re: Delicate path to tread

#152667

Postby vrdiver » July 16th, 2018, 2:07 pm

bruncher wrote:Hi GS

Have you established what the prospective buyer of the house intends? Is it worth asking, in case they want to rent it out and you could stay on?

From GS's other posts, sounds like the LL wants repossession so that they (or one of their family) can live there.

Hopefully GS has been able to talk to the LL and both party's objectives are clear and any "red lines" aligned with appropriate legal requirements (I'm thinking of the LL saying "I want you out by..." being converted to "Here's the official notice, which gives you until...., but let's talk about what we can do to make this the best outcome for everybody".).

AS GS has stated, the LL is a friend, so the situation is delicate if one wants to keep said friendship, let alone ensure appropriate references etc.

GS - do you know any more about the LL's needs re moving in? Are they in a bind, or do they have flexibility? Are there any options like "feel free to use room X to store stuff during the transition" etc.?

VRD

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Re: Delicate path to tread

#152684

Postby GoSeigen » July 16th, 2018, 3:02 pm

vrdiver wrote:
bruncher wrote:Hi GS

Have you established what the prospective buyer of the house intends? Is it worth asking, in case they want to rent it out and you could stay on?

From GS's other posts, sounds like the LL wants repossession so that they (or one of their family) can live there.

Hopefully GS has been able to talk to the LL and both party's objectives are clear and any "red lines" aligned with appropriate legal requirements (I'm thinking of the LL saying "I want you out by..." being converted to "Here's the official notice, which gives you until...., but let's talk about what we can do to make this the best outcome for everybody".).

AS GS has stated, the LL is a friend, so the situation is delicate if one wants to keep said friendship, let alone ensure appropriate references etc.

GS - do you know any more about the LL's needs re moving in? Are they in a bind, or do they have flexibility? Are there any options like "feel free to use room X to store stuff during the transition" etc.?

VRD


VRD, I think you've understood the situation pretty exactly. We have had two versions of the reason for notice: one, that Mr LL wishes to move back in (relationship issues), the other that a sale of the property is pending.


In the meantime, we've received another message from the LLs, asking for a meeting where I hope the above [in bold] might be said. I'm thinking that we need to be firm that when the break clause they have exercised has brought our fixed-term tenancy to an end we fully intend to remain in the property under a statutory periodic tenancy: I don't see why we should bother to hurry out of the property if the LLs cannot be bothered to serve proper statutory notice.

Equally, if they have time constraints I hope they will let us know what they are, and we can come to a mutually agreeable surrender of the tenancy. You are right that good references are a minimum requirement, especially if we need to move on quickly.


GS

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Re: Delicate path to tread

#163015

Postby bruncher » August 29th, 2018, 9:16 pm

GoSeigen wrote:The difference in risk is just phenomenal.

Rent a house, then go travelling:
-You have no property assets, no debt, just store your stuff in long-term storage. Capital in liquid, diversified investments. Nothing to insure, maintain or worry about.

Buy a house, then let it to go travelling:
-You have a house which needs maintenance and are exposed to property market volatility.
-You have a mortgage whose payments you must maintain.
-You cannot occupy the house until you have given notice to the tenants.
-You have to keep the tenants happy and hope they behave sensibly.
-You still have to store your stuff.
-Capital in liquid, diversified investments.
-Deal with tax, expenses and admin of all the above.

For years people have slated renting and seen property ownership as a get-rich scheme. I've loved renting and have no regrets at all.

GS


I agree about renting. The problem is the insecurity. We bought three years ago, and I expect to make a loss if we ever sell. But in the years before buying we were asked to vacate houses three times in as many years. Two of the houses we liked very much and spent considerable time arranging as we liked. That investment in home-making, and then being asked to leave, was too much too bear. My OH decided that we could not let that happen again. So we now own a house but have lower disposable income, and the house takes too much of my attention. In a sense the house owns us. But we cannot be asked to leave, and we do not suffer the indignity of agents wanting to 'inspect' us every six months - yes, home ownership is very appealing if you are a tenant and your landlord has an aggressive intrusive agent wanting to photograph your home twice a year!

GoSeigen
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Re: Delicate path to tread

#163036

Postby GoSeigen » August 29th, 2018, 10:59 pm

bruncher wrote:
GoSeigen wrote:The difference in risk is just phenomenal.

Rent a house, then go travelling:
-You have no property assets, no debt, just store your stuff in long-term storage. Capital in liquid, diversified investments. Nothing to insure, maintain or worry about.

Buy a house, then let it to go travelling:
-You have a house which needs maintenance and are exposed to property market volatility.
-You have a mortgage whose payments you must maintain.
-You cannot occupy the house until you have given notice to the tenants.
-You have to keep the tenants happy and hope they behave sensibly.
-You still have to store your stuff.
-Capital in liquid, diversified investments.
-Deal with tax, expenses and admin of all the above.

For years people have slated renting and seen property ownership as a get-rich scheme. I've loved renting and have no regrets at all.

GS


I agree about renting. The problem is the insecurity. We bought three years ago, and I expect to make a loss if we ever sell. But in the years before buying we were asked to vacate houses three times in as many years. Two of the houses we liked very much and spent considerable time arranging as we liked. That investment in home-making, and then being asked to leave, was too much too bear. My OH decided that we could not let that happen again. So we now own a house but have lower disposable income, and the house takes too much of my attention. In a sense the house owns us. But we cannot be asked to leave, and we do not suffer the indignity of agents wanting to 'inspect' us every six months - yes, home ownership is very appealing if you are a tenant and your landlord has an aggressive intrusive agent wanting to photograph your home twice a year!



Can't argue with any of that and have no doubt we will own a property again in future, for reasons very similar to these.

To wrap up this thread, we have now moved into a new rented property which we are very happy with. We never got to the bottom of what the landlords were up to, except I can add (now that we have moved out) that they are in the middle of a messy divorce and one partner didn't know what the other was doing half the time. The first "notice" letter we received from the husband announced that we had to move out because the wife had kicked him out of the marital home and he wanted to move back into the house we were living in. We were not best pleased...


GS


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