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  • Entrepreneurs

    ISA vs BTL in 2018

    I don’t think you understand investment funds

    I I invested £100 direct into one company I could lose £100 if the company goes bust or share price drops

    funds are very different

    if you look at a fund manager he will invest in more than 30 shares

    look at a brake down of the managed fund I gave you earlier you will see the spread

    some fund managers look for steady dividends and unit price growth

    within the fund

    so apart from a unit price dropping the likelihood of loseing all your cash is very remote indeed

    don’t forget all the pensions have fund managers even the govt uses them to invest money


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    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.


    Yes  I do  understand funds and that they spread the risk

    Just like I could buy 1 x  800K property or 8 x 100K ones in 8 different areas  of the uk or world even

    If one county / country doesn't perform well the others might do well and therefore support the portfolio

    That still doesn`t cover points  1, 2, 3 which allows you to get much  better returns than funds

    Anything wrong with the 60% ROI gain in 4 weeks  example I gave ?

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    Jonathan Clarke. http://www.buytoletmk.com

    Interesting debate, as far as I can see the pros and cons to both are:

    ISA's (stock market funds)

    Pros:

    Can produce good long term capital growth and increases in dividends, which when reinvested (compounding) can really build up a large capital sum (long term) all tax free (at present)

    Cons:

    High risk, obviously some markets are higher risk and more volatile than others. Emerging Markets for example.

    High management fees, these can really eat into you returns.

    No leverage, want to invest £100k into the Stock Market you will need £100K, where as property you can put down a deposit of say 25% and borrow 75%, which means your returns are only the full £100K

    Two ferocious bear markets in the last 18 years 2001-2003 & 2007-2010 where stocks lost over 50% of their value and more. Down 50% means you need a 100% return on your remaining capital just to get back to break even. Buy and hold investing is great in bull markets, terrible in a veracious bear market. Currently stocks are at all time highs, on any valuation western markets are very expensive. very high P/E and P/G's. best time to buy any investment is when it's hated. Stocks in 2010, property in 2012.

    Property:

    Pros:

    Leverage.

    Demand for housing is always there in the right areas.

    Been a well proven wealth creation vehicle overt the long term and a lot of wealthy people have either made of hold their wealth in property.

    The combination of renal and capital appreciation.

    Cons:

    illiquid (unlike stocks) you can not easily get out of the investment.it takes time and depending on the market, can take a very long time.

    Capital gains tax (unlike a fund in an ISA)

    Government taxes section 24, extra 3% stamp duty etc etc.

    The worry of tenants damaging the property, maintenance, management costs etc etc

    Property prices, especially in the south east where they are already extremely high, with many people now unable to purchase even the cheapest properties.

    Much more hands on and can be a lot more hassle.

    Just a few off the top of my head pros and cons to both, probably missed many, but it is early Sunday Morning. :-)

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    You are on the right track

    before osbourne I was for BTL 100%

    this is no longer the case

    I prefer now to invest in other assets

    becuse we never know what the govt will bring us

    my own workings are BTL is better with gross profits

    but when you factor in taxation

    they are similar at the end point

    in my own world I have plans for both

    belt and braces

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    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.