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I want to ask a question ...Do the rich invest in BTL ???Lets say we have a person who has a large nest egg - say around 10 million poundsWould they be tempted to invest in BTL?Very rich folk have Professionals to invest their wealth - The likes of Coutts Bank ect manage the riches money every day and have done for years ...I admit I have made a lot of money from BTL and I think when you have a lot of cash and you have made a success in Business there comes a time when you don't need to strive as hard as you did for the next dealIf you look at most posts on PT from a new investor they are in real terms quite poor and have to use Leverage to move forwardAs in general because they borrow they are not rich ??My son and his children will not need to strive for riches hopefully I will feather their livesMy own son has no intention of following my footsteps. The Property business can go on without him lifting a finger if he wants full managementI have been through the hard times in BTL and its still not an easy rideI enjoy doing what I do - Meeting customers arranging repairs and even cutting a Lawn or too?BTL in a large way is a BusinessDo the rich do business or do they invest?Business to me is starting with little and growing with the help of borrowing moneyInvesting is a very different thing from BusinessWhat do you think? Are you rich enough to be an investor or poor enough to build a business?I think there comes a cross over point when a person moves from Business to investmentJC said something in one of his blogs which made me think about thisIt was something in the terms of "you have so much cash you can afford a drop in prices and not worry" ???Personally I think I am at a cross roads moving from Business women to Investment womenI still take great interest in my Business because I enjoy itBut I don't have to stay in Business unless I want tooI would be very interested to have your views on this TopicDL
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
I think obviously not, above a certain level DL, but very few people actually get to such a level - and for most people (not all), in my view, property investing is still the best bet for getting to that point!
My sister in law is married to a New York banker and they live in an apartment in Manhattan. They bought a second home in a glamorous location in London. They were talking one time about how they don't get over to it as much as they'd like, and me being 'clever' said "You could maybe rent it out on a short term let basis like serviced accommodation" She just looked at me and said "Er, no."
My daughter has a friend whose parents have always bought properties to do up while living there - trading up - and also earn well (he's a pilot). I asked how they're getting on the other day and she said "They live in a fuck-off big house now!" I just love that phrase :-)
Good ambition - to get to the stage of being Fuck Off Rich!!
I feel a bit like that, I suppose. Once you've got to a certain size..!!
Some people are more ambitious though - mostly moving on to development. I've done a bit of development but I'm more of a crowdfunding investor, let-them-do-the-work sort now - still property, of course!
Author of The Complete Guide to Property Strategies
"It is the small decisions you and I make every day that shape our destiny" Anthony Robbins
I have similar friends who never conceder property as an investment
This is going to sound snobby (so forgive Me ) BTL is a working class investment
The more I ask myself this question Do I really want to buy ex Council Houses to rent the more I shy away
Not because the House is a bad investment but because I can find similar returns with less tax and less hassle
of course the Houses I own today allow me to have that choice and they will remain in place
I know I am changing my views on investment in 2018 But I can afford to change my areas of investment
and that's where the rubber hits the road
I know exactly what you mean DL. It is really working class. It's really work!! It's grubby! No class, lol.
We still actually do the grubby, stinky work of it. It's partly a case of being old dogs here... I do sometimes think I should've got me coat a long time ago!
It is tricky trying not to offend anyone, but let's be honest - once you've got 100 'good yielding' properties (often ex-council or other cheaper) with all that entails, not least the tenants, you don't really hanker for another 100.
As my mother-in-law stupidly asked when we started out: "Can't you just buy the property and not bother with the tenants?!" Quite - bloody good idea!
I suppose that's what the rich do, like my sister-in-law: Buy-to-leave!
That's why it saddens me though that the government and the public 'go after' private landlords; fundamentally, most are just good, hard working people who are trying to get ahead in life. They're not on the whole 'the rich' that they're made out to be. They might get rich through BTL, but by then more likely to cash it in - like me!
I think the more money one has the more one might lose focus
A billionaire maybe will not interrupt a yearly family gathering even if he loses a million by not taking a I minute call
Business wise its a poor decision one could argue but emotionally wise its the right decision
That 1 million lost will not affect his day to day life one jot but his 91 year old mother may pass tomorrow
20 years ago they may think that was unthinkable and they are in 2 minds
Part of them says I feel guilty at letting that million go.
Part of them say - but so what I spent 20 years of my life just so I can let a million go and my mum is more important
The waiter at the table may not be able to comprehend that mindset
I have 3 voids at the moment but I`m still in my dressing gown .Everything is relative
Its not a question so much of can you afford the losses its where it comes in the priority list in the day
Everyone`s priority list is different
The billionaire may justify his actions in not taking the call
But it may be on an emotional basis which is fine but not on a business basis
Because even a billionaire would struggle to replicate earning a million every minute of every day
He lost focus but knows he is losing focus so that`s fine that`s his prerogative
But yes the wealthy invest in BTL . BTL is a very very broad brush of course
I include BTR as BTL . BTL is the end product of BTR
The wealthy will also borrow to invest in BTL . Even if they are very wealthy
All they do is what I do .. but they scale up . ......Dolf de Roos taught me that
They dwarf the richest person on PT
They look to buy a skyscraper full of apartments @ 1 billion.
They may leverage@ 50% to buy that little baby
So BTL has no limits even to the very wealthy . Check out the Sunday Times Rich List
Jonathan Clarke. http://www.buytoletmk.com
But you see If I came to you and said buy me 20 houses with cash and manage them for me I could walk away and not give much thought about the running of my
investments as long as I saw cash in my bank every month
It was your comments that made me think on this
would I worry If my Property business halved in value over night
No I would Not ???
Would I worry about Rent Control
No I would not
There comes a time where the risk goes and maybe the buzz too
It becomes just an investment not a Business.
Hey - so my experience when I came into some cash in September last year...
I was already a BTL investor with a generally positive experience (purchased a run down property in Twyford a week before they announced Cross Rail was stopping there - instant 50% increase once we'd modernised and added a bedroom for £20k) and had assumed that I'd do much more (gently leveraged) BTL to provide an income and benefit from the property appreciation but its not worked out that way. Property prices are very high and its really difficult to find value in the market, S24, Stamp Duty etc etc...it just feels like a very bad time to be getting into the BTL market and the modelling I've done isn't really compelling.
As a cliche, I bank with Coutts but I'm not letting them manage my money either...all they would do is stick it in equities (ok, a broad diversified portfolio, but...) anyway....and equities are very high at the moment too and there will no doubt be a correction at some point.
So what am I doing?
1. I've invested a big chunk of change into an FHL...the tax breaks are great and a management company takes the hassle away. A net yield of ±10% is fine with me.
2. I've created another business and purchased one out of administration (not in the same industry as before as I have restrictive covenants) and found great managers to do the day to day running.
3. I've invested as much as I can (ie up to the limit of tax relief) in EIS and SEIS businesses (see ie: https://www.ignition.financial/2017/07/03/founders-facts-why-investors-love-seis-and-eis/ )
I'm also sitting on cash to pounce on the next opportunity (ie if there is a house market crash, equity correction, another distressed business etc).
I tried for a Coutts bank and they turned me down
Post code address I would imagine
Hi DL, Might be not deep enough pockets, wealth managers nowadays look for 25M investable wealth
If you are in a position that you are not worried if your business halved over night then why invest at all
I think your buzz has gone but you are having a final fling with BTR which is fine
Lets bring the figures down a bit
Say I have 1000 in the bank and so do you and we know that roughly 500 will sustain both our needs for a lifetime
You say to me - JC lets invest / gamble 50p in flipping a coin at double or quits . Just a bit of fun
But is it fun. Is it a buzz. Is it even worth the effort of getting a coin out of our pocket
Because . If you win so what . If you lose so what . If I win so what . If I lose so what
Its a waste of our day
There no point in flipping a coin as there is no fun or adrenaline it in it
50 years ago maybe when one had maybe only 50 in the bank and were at school then yes .
I enjoyed that then as a 50p could buy me a mars bar, crisps, drink and a doughnut at the tuck shop
Time and wealth distorts the need and desire to play those games which gave us a buzz back then
If the BTR gives you that buzz that`s cool .
If you thought it would give you more of a buzz but in fact it hasn`t then that`s cool as well
You have learnt something about yourself which you dint know before you did it
I personally wouldn`t get bogged down whether its technically an investment or a business
Just do phase 1 maybe and forget phases 2, 3 and 4 and move on to a different buzz
That could well be outside BTR. BTL and indeed anything bricks and mortar related
Letting go of the need to be an entrepreneur is an art in itself and that will take some time
Feel the Fear and Do it anyway as Susan Jeffers says. But kinda in reverse now
Angela kindly suggested.... ` End the Struggle and Dance with life`
My copy should arrive tomorrow
DL your posts often worry me, as I'm just starting out in BTL and you seem so down on it I wonder if I'm making a big mistake!
Unfortunately for me, being relatively poor there's little point in me pondering whether I'd still invest in BTL if I was wealthy. What concerns me right now is whether BTLis still worth trying? But surely the answer must be yes, provided one is careful?
I have £250K-odd to do something with, but no other assets to speak of and 2 very young children to provide for.
For me, "being careful" means buying terraced houses in an area with good rental demand, not paying over the odds each time, then refinancing at a LTV that should ensure the rent always covers the mortgage payments for the next 5 years. Provided you stick to these (and no doubt some other basic rules), surely BTL is still be a sensible way to make the most of your money?
Obviously there will be better ways to invest my money but it isn't obvious to me what they are!!!
This is tremendously important for me. Do any of you experienced investors really think BTL should now be avoided?