Buy-to-let landlords switching to fully managed investments?

Buy-to-let landlords switching to fully managed investments?

Following recent tax changes and increasingly common maintenance issues, will many existing landlords opt for a fully managed property investment?

Summary:

  • For years buy-to-let has been the most common form of property investment in the UK
  • Despite high returns, many people are put off by the hands-on nature of being a landlord
  • Fully managed property investments remove the problems associated with letting and maintaining a property

Buy-to-let has been one of the UK’s highest performing investments over recent years.

Since specialised mortgages were introduced in 1996, buy-to-let has generated returns of 1400% – far more than shares, bonds or savings accounts during the same period.

However, the prospect of being a landlord is something that many investors are put off by.

New research has revealed landlords are increasingly facing maintenance issues at the end of tenancies. The study, conducted by PropertyLetByUs, found a third of landlords are left to deal with filthy ovens at check-out, while dirty baths and sinks (23%), and stained carpets and floorcoverings (22%) were also common problems.

Furthermore, 40% of landlords’ tenants had redecorated without permission.

Jane Morris, Managing Director of Property LetByUs, said: “According to recent figures from the NLA, around 400,000 landlords in the UK have had their property damaged by tenants in the last 12 months. Our research shows that the problem is much bigger than this. So many landlords face expensive cleaning and repair bills at check-out, which are often contested by the tenant.”

Fully managed investments are fast becoming the preferred alternative to property investment. Always common with overseas buyers, fully managed property – such as purpose-built student accommodation – absolves the owner of any maintenance obligations.

This means that investors enjoy the benefits of an appreciating asset and regular yields but never need to deal with any tenant problems – much like managed equity investments.

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