Is being a landlord even an investment “opportunity” these days?

Yes, please send your great workings out to the Govt.
You say it exactly as it is. And Sadiq Khan wants to bring in Rent controls. Numbers aren't adding up for us & many any more. And they wish to beat us down further.

You didn't mention potential capitol increase in value

But if you're heavily leveraged then the numbers just don't add up with the recent interest rises

Rent is real income. You can use it to live on. The value of the BTL house increases over time, keeping pace with inflation in the long run. But the interest in an ISA will not even cover inflation, so you cannot spend it without consuming your capital. So BTL investment is still worth it, but not with a high LTV ratio. I keep my LTV under 50%.

Numerous 'gurus' online are strongly recommending HMOs, serviced accommodation etc instead of basic BTLs, because they say, the returns are much higher. What do readers think about this? Is it really worth the extra hassle? Are the benefits perhaps being oversold?

For me (been renting since mid 90’s) that kind of rental return would not work - tenant changeover costs and empty property for a month would lose you about 4 months rent - I would put it in the bank at 6% you can get now and wait for interest rates to fall or distressed sales to be available where you can buy it cheaper.

Failing that then put down 50% and get a better return.

Others would go for it, but I wouldn’t

The way things are going, the potential risks of being a private landlord are far greater than the rewards.

The main benefit of BTLs is gearing for a greater return, but that is high risk and doesn't work at the moment, with high interest rates and limited tax relief. You can be making a rental loss after interest, but still have to pay tax.

Otherwise, you may as well invest in a basket of tracker funds, probably lower risk, less admin and similar return (not investment advice!), You could even get a part time job to fill in the time you have been wasting fulfilling your duties as a landlord:-)

I think the other consideration is do you have children plus considerations of inheritance tax. Yes, from the point of view of short-term investment the government has made BTL investing relatively unattractive for the small investor (but not for large incorporated businesses). For the longer term BTL might make sense if you have kids and also want to allow for them, but if you don't, in the long term the government is going to take a lot of your money off you via 40% inheritance tax anyway.

It is far easier to mitigate IHT if you are invested in standard investments, rather than BTLs, especially if the BTLs are geared.

With BTLs there are relatively few opportunities to mitigate IHT, and they tend to be complex and expensive to put in place.

Reply to the comment left by Hew De Bowen at 08/08/2023 - 10:43
Benefits are oversold IMHO, unless you want a lot more hassle in your life.

Reply to the comment left by Hew De Bowen at 08/08/2023 - 10:43
I think it's arguable whether HMO'S have a higher yield or not? Are we talking bills inclusive individual rooms let under a multiple ASTs or a property let to multiple tenants under a single AST? I would suggest a bills inclusive arrangement would have a higher cost risk, but they do command a higher rent. Any investor landlord needs to consider the investment as "longterm" whereas a bank account is relatively short term. However, I do feel the long term picture is now looking rather unattractive!