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I would say using ISA Max allowances of 40K about 12 years to be a ISA MILLIONAIR
You rely very heverly on Capital Growth of 5% I think with the above I don't think we will see that sort of growth to be honest
I work now on 3% myself at best
If I was starting off with 150k and had no other income I would invest in BTL in my own name if
THE YEILD WAS 8% and I was borrowing money on a long term fixed rate of say 10 years
I would also factor in more changes in regulation too
But If a newbie came into the market today S24 would limit any expansion
If the same investor used a Company It may work but taking any sort of real income would be taxed quite high
For myself who is a higher rate tax payer I just don't see value in BTL
and as I say I am very conservative on Growth and Rent Inflation and Belt and Braces I have opted for long term fixed rate mortgages
I just don't trust the Govt at present and Interest rates can not stay low for ever
So I am sticking with Pension and ISA unless I see a peach of a deal in property
Lending is also a key factor its going to get harder to get lending in future years for all investors and home owners too if you remove the life blood of lending the Property Market can not do well.
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.
12 years is not that long at all to make a million so thats sounds good
40K x 12 years = a hefty 480K investment in total though in that 12 years
By becoming an ISA millionaire are you meaning after that 12 years you would be worth...
Jonathan Clarke. http://www.buytoletmk.com
My Goal is to create a pot of 1m and then draw income of 50k a year tax free
My pension Goal is similar But I have already got my Army Pension and I will have the state pension too so I will not need 50k from my Directors Pension
Having the above in place allows me to pass down shares from the Family Co to the next generations as I age
I would like to be in the position if needed when I don't have the health to work as an every day Landlord to have 100k a year to pay for care fees ect ect
But I hope I live a long healthy life to enjoy wealth and give my family treats while I am still here
I have built a large business and I just want to make myself and my family financially secure
If I can do that It will be a life well lived JC
But the striding and the deal making on the BTL market is now at an end for me The Next generations will have a foundation to build on if they want too.
Your goals are admirable DL but your 1 mil ISA `pot` is made up it seems of a 480K investment of your own funds.
Many will not be fortunate enough to be able to set aside 40K pa to invest.
I am glad that you are in a position to do that and therefore become an ISA half millionaire in 12 years :-)
Personally I think 40K in BTL each year is better spent.
12 x 150K BTL pa @ 75% LTV gives you at least a 1,8 mil portfolio after 12 years
Considerably more in fact if buying one a year as the first ones will grow in value on a pro rata scale
15 years on that would again be at least a 3.6 mil portfolio with no further investment
The 1 mil ISA pot with a 480K personal stake would reach no where near that level I suspect ?
Rest assured though that through your hard endeavours in property to date you have already - by the vast majority of measuring tools of wealth - already made yourself and your family secure for life. and for that I congratulate you
I dont rely on capital growth . I just welcome it when its there
The 10% growth I had in 2016 cannot be ignored though when planning a BTL geographic strategy
NE v SE is a positive conscious DD decision to be made when deciding where to invest.
We both as individuals are influenced disproportionally by where we live
It clouds our judgement
Overseas investors who pile into the UK do not have our personal baggage
They are free from the chains of our nesting instinct
They simply go where they expect the best returns
If you have leveraged up over the previous years 10% growth comes into its own.
The compound effects far far outstrip any ISA return
The hard work has been done in the past on deciding where to invest in and what
It may be 3% this year I agree but that still beats ISA`s.
ISA`s always have zero capital growth
You can have both JC
I like BTL and Other investments now
S24 has changed my view on BTL and I think looking forward it will have done me a favour
I have to plan for Old Age Possible ill health and then IHT
I have taken a road now I don't think I would have taken if it was not for Mr Osborne
As I will not be selling any property Capital Growth is not high on my list
But other avenues of positive cash flow are
This Govt and Possibly the next Labour Govt will put more nails in the coffin of BTL I am quite sure of that
I think we are in for stagnation and more tax payable from the BTL Cash Cow in coming years
BTL is not a Bad investment But the Govt will tax it higher and higher where it will come to the point the profit we make will be worth little after paying so much tax
You have seen the Young voting now and it will get stronger where the old and the rich in there eyes will be made to pay more and more
I have a home in Gibraltar and I for the first time have thought of leaving the UK because of the mess we are in
But Is jumping ship a wise thing to do its a very depressing time in the UK.
``I have a home in Gibraltar and I for the first time have thought of leaving the UK because of the mess we are in
But Is jumping ship a wise thing to do its a very depressing time in the UK``
This is very much a personal decision for me not a financial one .
There is no way on gods green earth that i would go to live abroad
I am totally happy with England as a country to live in. I don`t see it as a mess at all .
I see freedom and opportunity and stability. We are very lucky by comparison
Happiness can only come from within though, so you must go where your heart takes you.
I purchased my gin property when I was single and a plan to avoid IHT
but I don't see England as a great place. That's why I spend a lot of my time traveling I like options in life hate to be boxed in
I will just plod along for now and see what happens DL
The majority of my non-property money is in SMT - 10yr return is 289%. 3yr return is 103%. I'm up about 10% in the last 6 weeks.
I personally need the stability of property income for my lifestyle but if I didn't (and could sit out stock market crashes) I'd put all my money into investment trusts. I don't think my property returns can match this.
That`s very good. I am very lazy with my non property money I must admit. I should do more perhaps but my mind switches off .My Dad made his money in that kind of stuff and my uncle. I sometimes envied the fact that they could park all their wealth on a few statements tucked inside an A4 envelope inside the desk at home. But it wasnt for me.I preferred to be more hands on and able to touch and feel my investments and learn and expand and beat the averages through my own endeavours rather than leaving it all to the mercies of the stock market volatility which could crash overnight.