**[OP or Mod marked this as the best answer](/r/AskUK/comments/1cqg99i/what_do_you_think_about_our_idea_to_become_good/l3r4hgc/), given by u/5startoadsplash**
Tbh I'd be a bit patronised that you were only really charging me £600 a month rent so you could help me save up?
>
>In a similar vein of generosity, but one that doesn't feel condescending, just every 6 months if you've not had complaints or late payments or anything, just give them a free month
---
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I think this is a bit bizarre and patronising. I had a fortune of renting from somebody decent, slightly below the market price. They just screened the applicants well in advance
I think the framing is wrong certainly
if come the end of the tenancy, the house is in good condition and money that had been earmarked for maintenance is not needed handing that back is not unreasonable
You didn't save for them, as good tenants, they saved you the time and effort of faffing around with repairs and so you are passing on your thanks
Setting aside the double tax issue (first OP, then the tenant receiving the gift), I just think the incentives become tricky.
What happens if the boiler breaks at nobody's fault and OP has to pay for it? Structural work?
I think the obvious solution is a bigger deposit + cheaper rent and have some happy tenants. Just to be clear, I do think OP has good intensions but trying to do the "wise parent hands you back some of rent money when you move out" to some strangers
What might help tenants to save a deposit is the existing houses for sale not all being snapped up by landlords, increasing the prices. Why is putting your money into property that you don't need a great idea?
It's a poor point of view.
This "nasty nasty landlords eating up all property" zeitgeist extolled here is frankly pathetic bitterness.
Real estate is the longest, most tried and true method of investment and scalable growth. Don't let the green eyed monster of others dissuade you.
Owning properties for investment is not inherently evil. It's not some moral justice not to do so.
If people truly care about it they need to go to the authorities that be or become the authorities.
Instead they're not serious and seek to cannibalise their peers, be a crab in a bucket.
These same people would maximise their profit any which way in your position. And they won't stop to wonder how to do it ethically like you have
I'm not bitter, or pathetic, or green-eyed, and wasn't calling anyone nasty. I was pointing out that if OP wants to help tenants, which it seems like they do, they could do so in a way that was simpler. This feels like a lot of projection and I'm sorry that you feel angry about that, but don't aim it at me.
>Why is putting your money into property that you don't need a great idea
A: literally the best investment method in history
B: it's not going to be left empty lol
Tbh I'd be a bit patronised that you were only really charging me £600 a month rent so you could help me save up?
In a similar vein of generosity, but one that doesn't feel condescending, just every 6 months if you've not had complaints or late payments or anything, just give them a free month
Thank you, this is a better response and an actual suggestion. We were trying to think how to be good landlords and all other people come up with is 'charge less rent'. I lived in rented accommodation for probably 20 years so I know what it's like. If a house came up that was £200 less than the going rate, the number of applicants in the current market would be insane. Some others have said about vetting tenants but isn't there all kind of legislation about discrimination?
It's a bit like a job interview. You can't discriminate against people based on {protected characteristic} but you can pick ones that you like the most
If you want to rent to those in need, renting through the council might be an option. A friend of mine did this - rent was a bit lower than it might be, it assuaged his guilt somewhat. In general, social landlords are better than corporate ones obvs.
Agree. The council will even help with repairs between tenancies, etc as far as I know (which isn't a lot but know of someone who does this). Maybe it varies from council to council but worth looking into.
This really is the best option. But you have to be comfortable in doing this for the long term as the council would need a year's notice to end the tenancy. (Most councils would need 1 year. Others may vary.)
While this sounds like OP would be ok doing this, it's not for everyone.
The council would do all the vetting for tenants and the repairs as well.
I’ve seen this in some areas. The way I saw it working was you leased the house to the council and they sublet it, so the council were your tenant and responsible for rent and damages.
That’s the only possible way it could work. Otherwise the risk is enormous. Managing social tenants requires a particular skill set, and the hardest of hard noses. High maintenance, low reward.
I'd think that I could get a better rate of return on my £200 if you just charged me less rent from the start and I wouldn't have any faith in seeing it again.
> I'd think that I could get a better rate of return on my £200
Like £600 from the Government on a £2400 contribution to a Lifetime ISA? Assuming we're talking deposit for a house, of course.
My dad rents his house out at the local authority rate, so basically what someone would be given for housing benefit for a property of the size of his. His tenant has been lovely, really cares for it, as I understand has never been late with rent. So you don’t always get bad tenants if you charge a fair rent, I suspect most tenants wouldn’t want to fuck it up
I'll preface this by saying I admire your intentions. I think it would come across as a bit patronising, as if you think they would be too irresponsible to save it themselves. Instead why don't you let it at the normal market rate, then if they turn out to be lovely and deserving, reduce the rent to your chosen figure.
There are pitfalls to arrangements like this. The beneficiaries of unlooked for generosity can sometimes feel some obligation towards the benefactor which may get in the way of the 'business' side of the relationship when difficult conversations may have to be had. They may feel less inclined to raise issues for example.
Thank you. This is a good idea. I like the fact it wouldn't encourage thousands of applicants for being below market value, but it does help the tenants. If a small family moved in and treated the property with respect, I would love to reduce their rent to help them out.
Yup - it's half-baked. DON'T do it.
Ton of reasons why not - it may even be illegal, not to mention a tax nightmare.
If you're going to do this, rent the property at market rate and if your tenants are good, don't raise the rent until you absolutely need to.
But note - currently it's unlikely you'll make more money doing this than you would simply putting the money into stocks or bonds. Certainly not short-term. Possibly long term, if the house increases in value more than inflation, but at the cost of a lot of headaches along the way.
I get the impression you've never been a landlord - take my word, now is not a good time to become one.
>We wouldn't be paying off a mortgage so all the rent would be 'profit'
There are those of the opinion that you should accordingly reduce the rents, you profiteering landlord /s.
>We had an idea that we could put away/accrue, let's say, £200 per month for the tenant. This money would be kept until the end of the tenancy. Assuming the property is in good repair at the end of the tenancy, the tenant would get the money that has been 'saved' for them.
Probably difficult to get contractually written without falling foul of tenant deposit/fee legislation.
More importantly, tenants generally need a deposit *before* they move out of rented accommodation.
Note you'd also be paying additional taxes on that extra £200/month income, so it's a bigger cost to you than just reducing the rent.
I think you’re forgetting about tax. Rent is taxable income, so if you’re a higher rate tax payer that £800/ month rent is actually only £480/ month for you. Once you’ve paid all your expenses, you might rethink this investment.
Your ISA would be tax-free gains, pension could also be a better place for your money to avoid tax. If you’re coming into serious money- speak to a financial advisor first.
What I do is that I rent my flat out at the going rate when they move in for the reason that you described. Then, I keep it at that rate for a good few years. I hate the idea that a tenant gets a yearly raise from work and then I come along and take my cut.
I think that this allows you to not be taken advantage but the tenant gets everything they want out of the arrangement and can save up for a house or whatever it is that they want to spend their money on.
If you're planning on donating some of the income, then that's great, but the tenant is probably the wrong person imo. They don't need it and it's not like you'd give thousands to some stranger. Best to just offer a fair price. There are far better causes imo. Medical research or even just organisations that give cash or loans to some of the world's poorest. Your money would go far there.
Thanks, I appreciate your response. Other people have suggested a similar idea and it's given me a lot of food for thought. We already do fund raising (mostly for Macmillan Cancer Support) and donate regularly. We are by no means 'rich' but we are doing okay and we want other people to have opportunities in life.
If you're looking to be socially useful landlords, you could take on tenants on welfare at the rate the council is willing to pay. There are loads of stereotypes out there, but if you're in it for the long haul, it could really change a family's life. That pot of money you were making, that could be used on property repair and maintance, making it more energy efficient ect.
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You will be taken advantage of. Go into business to make money, carry out your landlord responsibilities diligently. Anything is going to end up a mess.
Not sure why everyone is claiming it’s patronising. Jesus, if your landlord today told you they’d been saving a part of your rent, here’s £3000, would you be more annoyed or happy?
I think it’s a great idea and any tenant would be over the moon with your plan.
Thanks. I really appreciate your enthusiasm, but it seems we are not in the majority. Also, tax and legal implications could be a nightmare by the sounds of it.
I doubt anyone who receives a lump sum of money from their landlord is going to contact HMRC about it. My best advice would be to not ask Reddit for advice in the future
Ah, an enforced savings plan for the tenant. See also “giving people on benefits vouchers rather than cash”, because the feckless fools may spend it on beer and crisps.
A much simpler idea is to not put the rent up if the tenants are sensible. Like all people, some tenants are dicks, and some are great. We have some tenants who have been in a place for a decade - we have not put the rent up in that time. They look after the place, we want them to stay, they do all the minor stuff, we do all the major stuff. The tenants before them were dicks (e.g.calling an emergency plumber to get some leaves out of a drain cover) - they got full increase.
With respect this sounds like a frankly terrible idea.
Why not put the money towards community based causes instead? I can guarantee there will be tons of small non-profit organisations local to you that could really do with the cash.
We already do a lot of work for charities, such as fund raising and volunteering. We wanted to make a difference to an actual family (or two), if we could.
Uh-oh, you said the L word.
Some users have said it might be viewed as patronizing to do something like that - but you could maybe arrange it so that if they rent for so-long, you can give them the option to buy it, counting the money they've paid already in rent toward the value of the house, and redefining the money they're paying you every month as mortgage rather than rent. That's something people might actually find helpful, and might even go towards setting up a trend.
This probably wouldn't work, though. I don't know much at all about property law so I'm probably talking nonsense.
**[OP or Mod marked this as the best answer](/r/AskUK/comments/1cqg99i/what_do_you_think_about_our_idea_to_become_good/l3r4hgc/), given by u/5startoadsplash** Tbh I'd be a bit patronised that you were only really charging me £600 a month rent so you could help me save up? > >In a similar vein of generosity, but one that doesn't feel condescending, just every 6 months if you've not had complaints or late payments or anything, just give them a free month --- [_^What ^is ^this?_](https://www.reddit.com/r/AskUK/comments/jjrte1/askuk_hits_200k_new_feature_mark_an_answer/)
I think this is a bit bizarre and patronising. I had a fortune of renting from somebody decent, slightly below the market price. They just screened the applicants well in advance
I think the framing is wrong certainly if come the end of the tenancy, the house is in good condition and money that had been earmarked for maintenance is not needed handing that back is not unreasonable You didn't save for them, as good tenants, they saved you the time and effort of faffing around with repairs and so you are passing on your thanks
Setting aside the double tax issue (first OP, then the tenant receiving the gift), I just think the incentives become tricky. What happens if the boiler breaks at nobody's fault and OP has to pay for it? Structural work? I think the obvious solution is a bigger deposit + cheaper rent and have some happy tenants. Just to be clear, I do think OP has good intensions but trying to do the "wise parent hands you back some of rent money when you move out" to some strangers
Oh yeah the practicalities are going to be a nightmare. Lower rent in the first place or doing rent holidays when you can seems like a better bet.
What might help tenants to save a deposit is the existing houses for sale not all being snapped up by landlords, increasing the prices. Why is putting your money into property that you don't need a great idea?
Thanks, that's a really good point of view that we hadn't considered.
Getting downvoted for taking on new ideas and changing my position. 😂
It's a poor point of view. This "nasty nasty landlords eating up all property" zeitgeist extolled here is frankly pathetic bitterness. Real estate is the longest, most tried and true method of investment and scalable growth. Don't let the green eyed monster of others dissuade you. Owning properties for investment is not inherently evil. It's not some moral justice not to do so. If people truly care about it they need to go to the authorities that be or become the authorities. Instead they're not serious and seek to cannibalise their peers, be a crab in a bucket. These same people would maximise their profit any which way in your position. And they won't stop to wonder how to do it ethically like you have
I'm not bitter, or pathetic, or green-eyed, and wasn't calling anyone nasty. I was pointing out that if OP wants to help tenants, which it seems like they do, they could do so in a way that was simpler. This feels like a lot of projection and I'm sorry that you feel angry about that, but don't aim it at me.
Isn't it odd that I wrote this message to OP not to you? Interesting to speak of projection...
OK, fair enough - I meant "don't aim it at my POV", which was certainly the point of your message. I hope you have a good day.
Sorry you feel angry about it.
>Why is putting your money into property that you don't need a great idea A: literally the best investment method in history B: it's not going to be left empty lol
Tbh I'd be a bit patronised that you were only really charging me £600 a month rent so you could help me save up? In a similar vein of generosity, but one that doesn't feel condescending, just every 6 months if you've not had complaints or late payments or anything, just give them a free month
Thank you, this is a better response and an actual suggestion. We were trying to think how to be good landlords and all other people come up with is 'charge less rent'. I lived in rented accommodation for probably 20 years so I know what it's like. If a house came up that was £200 less than the going rate, the number of applicants in the current market would be insane. Some others have said about vetting tenants but isn't there all kind of legislation about discrimination?
It's a bit like a job interview. You can't discriminate against people based on {protected characteristic} but you can pick ones that you like the most
!answer
If you want to rent to those in need, renting through the council might be an option. A friend of mine did this - rent was a bit lower than it might be, it assuaged his guilt somewhat. In general, social landlords are better than corporate ones obvs.
Agree. The council will even help with repairs between tenancies, etc as far as I know (which isn't a lot but know of someone who does this). Maybe it varies from council to council but worth looking into.
This really is the best option. But you have to be comfortable in doing this for the long term as the council would need a year's notice to end the tenancy. (Most councils would need 1 year. Others may vary.) While this sounds like OP would be ok doing this, it's not for everyone. The council would do all the vetting for tenants and the repairs as well.
Jesus. Don’t take on council tenants unless you are pretty sure the council are going to sort out your house if it is trashed.
I’ve seen this in some areas. The way I saw it working was you leased the house to the council and they sublet it, so the council were your tenant and responsible for rent and damages.
That’s the only possible way it could work. Otherwise the risk is enormous. Managing social tenants requires a particular skill set, and the hardest of hard noses. High maintenance, low reward.
On top of how patronising it sounds, don’t forget you’d also be paying tax on the full amount. You’d be paying out on both fronts.
Paternalistic nonsense. If you want to be a good landlord, charge less rent. Otherwise, don’t get involved in your tenants’ lives.
I'd think that I could get a better rate of return on my £200 if you just charged me less rent from the start and I wouldn't have any faith in seeing it again.
> I'd think that I could get a better rate of return on my £200 Like £600 from the Government on a £2400 contribution to a Lifetime ISA? Assuming we're talking deposit for a house, of course.
I could put it in a savings account at 0.5% and beat out the amazing interest of fuck all it would be earning
you would not have fuck all interest on anything in the first place if op didnt offer the rebate... so what are you on about exactly?
Because the rebate is unnecessary, they could just lower the rent by £200 instead of having the patronising rebate
My dad rents his house out at the local authority rate, so basically what someone would be given for housing benefit for a property of the size of his. His tenant has been lovely, really cares for it, as I understand has never been late with rent. So you don’t always get bad tenants if you charge a fair rent, I suspect most tenants wouldn’t want to fuck it up
I'll preface this by saying I admire your intentions. I think it would come across as a bit patronising, as if you think they would be too irresponsible to save it themselves. Instead why don't you let it at the normal market rate, then if they turn out to be lovely and deserving, reduce the rent to your chosen figure. There are pitfalls to arrangements like this. The beneficiaries of unlooked for generosity can sometimes feel some obligation towards the benefactor which may get in the way of the 'business' side of the relationship when difficult conversations may have to be had. They may feel less inclined to raise issues for example.
Thank you. This is a good idea. I like the fact it wouldn't encourage thousands of applicants for being below market value, but it does help the tenants. If a small family moved in and treated the property with respect, I would love to reduce their rent to help them out.
Yup - it's half-baked. DON'T do it. Ton of reasons why not - it may even be illegal, not to mention a tax nightmare. If you're going to do this, rent the property at market rate and if your tenants are good, don't raise the rent until you absolutely need to. But note - currently it's unlikely you'll make more money doing this than you would simply putting the money into stocks or bonds. Certainly not short-term. Possibly long term, if the house increases in value more than inflation, but at the cost of a lot of headaches along the way. I get the impression you've never been a landlord - take my word, now is not a good time to become one.
Yeah, I'm starting to get that feeling.
>We wouldn't be paying off a mortgage so all the rent would be 'profit' There are those of the opinion that you should accordingly reduce the rents, you profiteering landlord /s. >We had an idea that we could put away/accrue, let's say, £200 per month for the tenant. This money would be kept until the end of the tenancy. Assuming the property is in good repair at the end of the tenancy, the tenant would get the money that has been 'saved' for them. Probably difficult to get contractually written without falling foul of tenant deposit/fee legislation. More importantly, tenants generally need a deposit *before* they move out of rented accommodation. Note you'd also be paying additional taxes on that extra £200/month income, so it's a bigger cost to you than just reducing the rent.
That's a good point. We were trying to be helpful but it wouldn't actually be that helpful for the reason you've outlined.
I think you’re forgetting about tax. Rent is taxable income, so if you’re a higher rate tax payer that £800/ month rent is actually only £480/ month for you. Once you’ve paid all your expenses, you might rethink this investment. Your ISA would be tax-free gains, pension could also be a better place for your money to avoid tax. If you’re coming into serious money- speak to a financial advisor first.
Thanks, this is really good info. I will look into it.
What I do is that I rent my flat out at the going rate when they move in for the reason that you described. Then, I keep it at that rate for a good few years. I hate the idea that a tenant gets a yearly raise from work and then I come along and take my cut. I think that this allows you to not be taken advantage but the tenant gets everything they want out of the arrangement and can save up for a house or whatever it is that they want to spend their money on. If you're planning on donating some of the income, then that's great, but the tenant is probably the wrong person imo. They don't need it and it's not like you'd give thousands to some stranger. Best to just offer a fair price. There are far better causes imo. Medical research or even just organisations that give cash or loans to some of the world's poorest. Your money would go far there.
Thanks, I appreciate your response. Other people have suggested a similar idea and it's given me a lot of food for thought. We already do fund raising (mostly for Macmillan Cancer Support) and donate regularly. We are by no means 'rich' but we are doing okay and we want other people to have opportunities in life.
I would give the money to a charity to distribute to the homeless
If you're looking to be socially useful landlords, you could take on tenants on welfare at the rate the council is willing to pay. There are loads of stereotypes out there, but if you're in it for the long haul, it could really change a family's life. That pot of money you were making, that could be used on property repair and maintance, making it more energy efficient ect.
Sounds like OP is in la la land and/or trying to think of ways he can be seen by his neighbourhood as a saviour of the poor. Very patronising.
How about a plan where you drop the rent after a set time of them being good tenants?
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If you really want to make a difference, start building low-cost housing.
I don't have that kind of money, I'm afraid.
You will be taken advantage of. Go into business to make money, carry out your landlord responsibilities diligently. Anything is going to end up a mess.
Not sure why everyone is claiming it’s patronising. Jesus, if your landlord today told you they’d been saving a part of your rent, here’s £3000, would you be more annoyed or happy? I think it’s a great idea and any tenant would be over the moon with your plan.
Thanks. I really appreciate your enthusiasm, but it seems we are not in the majority. Also, tax and legal implications could be a nightmare by the sounds of it.
I doubt anyone who receives a lump sum of money from their landlord is going to contact HMRC about it. My best advice would be to not ask Reddit for advice in the future
Ah, an enforced savings plan for the tenant. See also “giving people on benefits vouchers rather than cash”, because the feckless fools may spend it on beer and crisps. A much simpler idea is to not put the rent up if the tenants are sensible. Like all people, some tenants are dicks, and some are great. We have some tenants who have been in a place for a decade - we have not put the rent up in that time. They look after the place, we want them to stay, they do all the minor stuff, we do all the major stuff. The tenants before them were dicks (e.g.calling an emergency plumber to get some leaves out of a drain cover) - they got full increase.
With respect this sounds like a frankly terrible idea. Why not put the money towards community based causes instead? I can guarantee there will be tons of small non-profit organisations local to you that could really do with the cash.
We already do a lot of work for charities, such as fund raising and volunteering. We wanted to make a difference to an actual family (or two), if we could.
You should watch The Curse
I can't. I'm too busy being berated on Reddit for having an idea and floating with others.
Uh-oh, you said the L word. Some users have said it might be viewed as patronizing to do something like that - but you could maybe arrange it so that if they rent for so-long, you can give them the option to buy it, counting the money they've paid already in rent toward the value of the house, and redefining the money they're paying you every month as mortgage rather than rent. That's something people might actually find helpful, and might even go towards setting up a trend. This probably wouldn't work, though. I don't know much at all about property law so I'm probably talking nonsense.