Social housing investment

[the_priest]

the problems arise when the social tenant destroys the property through neglect and wilful damage. Then the owner is left high and dry. Also when the stop paying rent. Also when the owner of said property wishes to move into their own home and retire. There are many pitfalls in this scheme and rather few benefits (sic).

[DefTrap]

How is it different to normal private lettings? The price?

My experience of "managed property" is that their idea of "manage" is way different to yours. They always take on too many properties and are then in a cycle of bare minimum effort fire fighting.

[Le_Fromage_Grande]

It's a good way of making money out of the government

[Trinity765]

the problems arise when the social tenant destroys the property through neglect and wilful damage. Then the owner is left high and dry. Also when the stop paying rent. Also when the owner of said property wishes to move into their own home and retire. There are many pitfalls in this scheme and rather few benefits (sic).

What Priest said.

The other side of the coin is some landlords see it as the OP describes and spend as little as possible on the repairs. I came across this in the news this week https://www.bbc.co.uk/news/av/uk-englan ... n-59587140 Kwajo Tweneboa - social housing activist.

[DefTrap]

You give them a property that is in good condition and they’re obligated to manage it properly and pay you.

Yes, good luck with that! Their focus will be on the tenant, they really won't give a shit if you lose money on it. If the tenants fvck the place up it becomes a human rights issues "we can't tell people how to live" bollocks and you get to enjoy seeing the place get pulled to bits in front of your eyes. And when they stop paying because they don't wanna (or in the case of my tenant because she didn't think she had to when her husband left) then that's suddenly your problem. It's easier for them to be managed like this - the tenant is paying their wages.

W/o wanting to piss on your chips - If you buy the right sort of property, something plain and solid without anything fancy, something that is cheap to gut and redo when it goes wrong - then I guess it's a go-er. My current tenants are lovely. The previous ones were filthy blaggers.

[Le_Fromage_Grande]

The local authority will be Potters Tenant, not the person living in the house, the Local Authority are sub letting it to them

[Mussels]

A long term let to the council in return for a (probably) lower but guaranteed return?
Nobody wants to be responsible for the liability of council tenants, including councils so I'd be surprised if they are willing to take it on when they can palm it off onto private landlords.

[Le_Fromage_Grande]

It's a seething pit of negativity in here today.

[DefTrap]

The local authority will be Potters Tenant, not the person living in the house, the Local Authority are sub letting it to them

If that's truly the case and there's an immovable barrier between tenant and landlord with guaranteed income, no risk and that warm glow that you're helping out the unfortunates then it sounds like a sure fire winner. And you can let the council put up with accusation of profiteering and slum landlord every 5 minutes.

[DefTrap]

That does seem to be the case.
In principle I’m not into private landlords but this might be a way to contribute to social housing, providing much needed homes, and earn enough from it that it provides a modest return so it’s a win all round - except for the tax payers I suppose.

I think it's one of these scenarios whereby if you have a lot to invest (lots of properties) then you can make a decent return and assuage some guilt from profiteering. I knew a bloke who owned a lot of property that was let into of social housing - most of his properties were pretty horrid, so it looked like between him, the council and the tenant that there was a bare-minimum of upkeep and comfort. It wasn't exactly anything to be proud of.

[Trinity765]

Who would be responsible for the repairs?

[wheelnut]

It would be ironic if I bought ex-council houses and leased them back to them

Mad isn't it. On the face of it, it does sound like a good idea but the devil will be in the detail.

Having the local authority as a tenant for a specified period sounds like quite a stable investment.

[David]

Who would be responsible for the repairs?

The council, it says further up.
HTH.

[Yorick]

It would be ironic if I bought ex-council houses and leased them back to them

And they rented it back to one of your kids and their family.

[DefTrap]

If anything pushes me out of private letting it will be another terrible tenant, it's just too much risk. I was very lucky because I managed to shift them before I incurred too much of their debt and the refurb needed to happen at some point anyway, so I'd already accounted for that. Not everyone is so lucky.

I'd happily take less profit if the council wanted to take on all the risk. Of course to take this to it's natural conclusion - if everyone lets their property be managed by the council then presumably rents will drop, letting will become non-profitable (or at least the initial investment will diminish) and everyone will get out. Which is a win if the plan is to reduce the escalation of house prices

Not all housing is probably suitable for social housing anyway. I'm providing a service to a different market and I would argue it's a better service than any council would provide (other than letting them live there rent free)

[Yorick]

But if councils try to lower rents by paying lower to the owners, there'd be a mighty drop in owners wanting to deal with them.

[wheelnut]

A long term let to the council in return for a (probably) lower but guaranteed return?
Nobody wants to be responsible for the liability of council tenants, including councils so I'd be surprised if they are willing to take it on when they can palm it off onto private landlords.

Private landords aren't so keen anymore. One of the side effects of the government taxing landlords in to oblivion - a lot feel it's not worth the hassle/risk anymore.

[Count Steer]

Hang on lads, I've had an idea...

What if councils could build houses and rent them out? Radical, I know.

To raise money, you could lend them the money fixed term (instead of buying a house and leasing it to them). They pay you an interest at a rate you'd expect from the leasing deal and you can get your capital back at the end of the fixed term. That way you have no worries about tenants, maintenance etc. Call it a 10 or 15 year housing bond or something. Obvs you don't get the appreciation in value - assuming that house prices go up - but they could factor something in.

Sorted.

[Yorick]

Property rental funded my retirement. Needs no changes

[Count Steer]

Hang on lads, I've had an idea...

What if councils could build houses and rent them out? Radical, I know.

To raise money, you could lend them the money fixed term (instead of buying a house and leasing it to them). They pay you an interest at a rate you'd expect from the leasing deal and you can get your capital back at the end of the fixed term. That way you have no worries about tenants, maintenance etc. Call it a 10 or 15 year housing bond or something. Obvs you don't get the appreciation in value - assuming that house prices go up - but they could factor something in.

Sorted.

That's already a thing, sort of, funding for property has to come from somewhere, so you might find your pension is tied up in property finance somewhere. There are stand alone funds just for it, although I've only had a very brief look at it.

If the council could take on debt to build houses then there are already lots of funding vehicles to plug into, but they don't want it. It was the same for PFI hospitals and schools, it always seemed bizarre to me that the government didn't just borrow the money and fund it themselves, rather than paying the big PLCs massive amounts of profit. I honesty think it was a strategy driven by poor advice, bad accountants and wanting to be seen to deliver large projects in their short terms, to keep votes.

For the tax payer this private landlord owned social houses is an even worse proposition, because they won't even own the houses at the end of the 25yr term, but it works for everyone else.

True, there are property funds etc but I thought that councils were either prevented from borrowing for building or buying and/or, because of the 'right to buy' weren't willing to.
They wouldn't need to do the post war thing of putting up huge estates very quickly. That served a purpose at the time but isn't really appropriate any more and some of it has turned into serious problems.

Every development now seems to have to have a proportion of 'affordable housing' either on the site or, by agreement, provided elsewhere. Councils could get first refusal?

Some councils were offering an equity release arrangement whereby you get a lump sum up front and they get dibs on the property...in due course. Not sure how it worked or if it's still going but it did mean they could get a range of different property types mixed in with everything else. Bungalows were popular for older tenants in rural areas but inner cities don't have too many of those. Could turn that into an investment vehicle maybe.

I knew people who were in Housing Association shared equity schemes which helped them get on the housing ladder. Maybe they could do something like that, that people could invest in and get equity share etc without the pain of maintaining/managing anything. Some councils do have deals with HAs but I don't know of any investment options related to them.

Locally, there's almost universal agreement that housing is so expensive that the youngsters all have to move away. At the same time there's always uproar when anyone tries to build. (Whenever anyone does get planning permission they seem to build the biggest houses they can cram into the plot though ).

I also know someone that has or had 2 or 3 houses he'd never actually seen. (He bought one in Salford because he knew the BBC were going to move a chunk of their operations there). So it's possible to be completely hands-off from the day-to-day letting and maintenance burden.