Data from an investigation from Saga Landlord Insurance indicates that 10% of buy-to-let owners over the age of 50 make no profit from their investment.
Although many have gained substantial financial returns from entering the market, a further quarter said they found it tougher than they expected.
Optimism
The poll of 10,141 over 50’s showed that almost 10% are now making the most of the opportunities presented by the buy-to-let market, with reasons for optimism for potential landlords.[1]
Of those landlords surveyed, an average of £700 profit per month from letting a property was recorded. However, one in ten said that they were either just breaking even or running at a loss.[1]
A third of respondents were thought to have entered the market during the past five years and 24% said that they have found being a landlord tougher than they originally thought. 10% said that the buy-to-let business was easier than expected. This could be down to the fact that just 45% of people questioned said that they had purchased a property with the specific intention of renting it out. 14% said that they had inherited the property, with 7% saying that had purchased it for a child or other relative to live in.[1]
Becoming a buy-to-let landlord comes with some daily concerns. The top reasons why landlords worry were found to be renting the property to bad tenants (36%) and managing the property in older years (19%). Another survey from Saga showed that 32% of landlords had experienced issues with tenants not paying rent, 27% had problems with property damage and 11% going as far as taking legal action against their property inhabitants.[1]
Challenges
Sue Green, Head of Landlord and Home Insurance, Saga commented that, ‘Buy-to-let is an increasingly popular investment for the over 50s, particularly in the current financial climate but clearly it is not without challenges. The recently announced cuts to tax relief for buy-to-let landlords, for example are a new factor that people will have to take into account when deciding whether to start letting a property.’[1]
‘Our research shows that, while landlords are largely positive about their decision, they are also likely to face practical and financial hurdles. This is why we have developed a guide that provides practical advice to landlords, helping to address the most commonly raised concerns and giving them peace of mind so they can focus on enjoying their retirement,’ Green added.[1]
[1] http://www.propertyreporter.co.uk/landlords/10-of-landlords-aged-over-50-make-no-profit.html