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Excerpt from an interesting article on The Share Centre that suggests that Section 24 has pushed the pendulum away from BTL as an investment, and back towards shares:It seems to me that the pendulum has swung.
All else being equal, and assuming similar returns, the big advantage of buy-to-let over equities is that it allows leverage and thus you can multiply any growth in value. On the other hand, leverage is risky, and in the event that house prices fall, losses are also multiplied.
Equity investing had the advantage that is provides greater liquidity and is much less hassle.
But thanks to the change in the tax treatment of buy-to let, the degree of leverage needs to be much lower, thus significantly lowering the one big advantage of this form of investing, and thus ceding the advantage to equities, especially when you factor in lower capital gains tax rates and stamp duty.https://www.share.com/stock-markets-and-...-has-swung
Learn Change and Adapt ?????
The trouble is I find - Share people are a bit tunnelled visioned
Buy a share - stick in a drawer and forget about it .
I like to involve my asset and make it work hard for me
Share people dont know though how to make money refurbing a property .
They could do some origami i guess on the share certificate but it wont increase its value
They also don`t know how to buy a 100K property at 90K
They also don`t know how to maximise rents or build extensions or split a plot
Share people often struggle to understand how property people work
Shares are fairly one dimensional
Its the multi dimensions available to property people that swings the pendulum towards bricks and mortar
Jonathan Clarke. http://www.buytoletmk.com
I read the Investment forums away from the BTL sector
and I don't ever see the types of conversation I see on Property Tribes
I don't see the stress and I don't see a sector hated as much as ours in the media
Its not a political football
Just look at the Oil Prices in the past 12 months Its doubled and every one is paying more to drive a car
Nothing has been said in real terms
This is the difference between the two sectors
More money is made in investment terms in the city than anywhere else
I have opened my mind to alternatives and the result is I have new avenues to invest in and I just don't have to put a lot of effort into the sector
If I showed you a twenty year growth of some of the ISA and Pension Funds I use I think you may be surprised
Yes you can do the things you have mentioned But how much tax are you paying on the profit when you sell or with draw your income
This is so close now for Higher Rate tax payers JC which is the best I think both or worth investing in
and I stiil favour a 40% Tax rebate on pensions over BTL every time although its only 40K a year I can use
so the deal is I give you 40k or I give my pension 24k and the next I have 40k a nice hello of 16K from HMRC and then I have
an investment that grows totally tax free and I can avoid nearly all IHT
I am protected from creditors 100%
Its not tunnel vision JC its really opening ones eyes to see where you can put wealth and avoid taxes.
Nothing against shares but whenever I have seen a presentation or read an article trying to compare the two the article gets it wrong and it does not allow for or include the skill of the property investor. Whatever I do to my share certificate I cant enhance its value . Its a static investment. Property is alive
So its hard to compare two very distinct investments . People often try but often fail
Shares are just a paper exercise . Property can be but it is so often so much more hands on than that
A bad property investor will yes do worse than a good share investor
A good property investor will though always out perform a good share investor in my view
I remain very committed to property for the reasons JC mentions but I am always keen to learn. What other general investment forum's would you recommend for good impartial advice?
When you find one I will join to
I find it’s on forums it’s either BTL or investments I can’t find a one common to both sectors
What ones do you recommend for shares investment?
As skilful as you need to be to buy a property you seem to have ignored a whole mass of ‘Share People’ called ‘traders’ who don’t just put share certificates in drawers but learn the ins and outs of companies, keep abreast of macro trends across sectors and use technical analysis to gain an advantage. Damm right it’s different to BTL.
Ok so a share trader person is more like a BTS person in property rather than a BTL`er
They both have in depth knowledge of their sector they study trends , analyse and both buy well at the outset
But a trader in shares still cannot do anything positive with their share certificate once bought to enhance its value
Its still put in a drawer until it is sold
A BTS`er in property however will buy well just like a share trader but unlike a share trader the BTS`er has the additional opportunity when the contract is exchange to now enhance the value of his property before selling on. The share trader doesn`t
What if the shares are in a venture capital company?
Isn't the share trader operating in a similar way to you, being asked to select shares in a company where the company knows how to buy an asset they can add value to.
Agreed there can be some sort of comparisons drawn between the two
But I see it as a broker taking their cut and the VC company also will take a cut
Are you not last in the queue then with a rather watered down return
You have to trust 2 largely unknown parties to make your money for you
If you are in effect your own VC company you get to keep 100% of the profits