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  • Entrepreneurs

    ISA vs BTL in 2018

    I always felt that buy-to-let was over-hyped. Although many investors have done well, generating attractive rental yields and capital growth from rising house prices, it is such an effort.

    BUY-TO-LET BOTHER

    And today it demands more effort than ever, while the rewards have declined dramatically. Investors have to secure the right property, slap down thousands in stamp duty and spend money doing it up. They then have to find tenants, sign contracts, collect deposits and rent, check tenants aren’t trashing the place, replace them when they leave, and sort out any problems with the property. There there’s maintenance and wear and tear.

    Oh, I forgot. If you take out a buy-to-let mortgage you also have to allow for a valuation, survey, legals, arrangement fees, mortgage interest charges and future remortgage costs.

    At the same time, the tax burden has got heavier, including a 3% stamp duty surcharge, reduced wear and tear allowances, and the loss of higher rate tax relief on mortgage interest. Landlords also have to jump through many more regulatory hoops.

    Property and stocks offer both income and growth. The FTSE 100, for example, currently yields a healthy 4.01%. If you had invested £20,000 in the FTSE All Share 10 years ago you would have more than doubled your money to £41,100, according to Fidelity International.

    Property has also done well too, just not well enough to make it worth the extra effort. The national average rental yield is just 4.4%, which falls to 3.16% in London, Your Move calculates. Rental growth has stalled, up just 0.97% in the last year, according to Landbay.

    https://www.aol.co.uk/news/2018/09/21/wh...ccounter=1

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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.

    So in 10 years it took £20k to be worth £41,100 in the FTSE, but it doesn't say if dividends were reinvested. I'm guessing they were.

    In 13 years I turned £40k into over £1m through BTL and a few quick flips. Thats not equity, thats sold up and cashed out, all tax paid.

    Stocks and shares is lazy investing, but its better than nothing.

    Property and BTL are completely different beasts in my eyes, there's so many different ways you can add value, refinance, find a bargain, split things up, etc.

    Whoever wrote the article is clearly a hands off investor, which BTL isn't.


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    I went to a financial seminar once when the IFA showed the assembled crowd graphs where the stocks and shares upward trajectory line beat the BTL line

    I was sat at the back  - My hand kept popping up to ask questions

    I said well I`ve made  at least 4 times what your graph shows doing BTL

    The room asked me how .....and I told them .

    The IFA slunk  off into a corner a beaten man

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


    You have to laugh at such a heavily weighted article with such throw-away statistics:

    "Property and stocks offer both income and growth. The FTSE 100, for example, currently yields a healthy 4.01%. If you had invested £20,000 in the FTSE All Share 10 years ago you would have more than doubled your money to £41,100, according to Fidelity International."

    > Not sure when 4.01% has ever been considered healthy? And that's currently as well!

    "Property has also done well too, just not well enough to make it worth the extra effort. The national average rental yield is just 4.4%, which falls to 3.16% in London, Your Move calculates. Rental growth has stalled, up just 0.97% in the last year, according to Landbay."

    > What, no 10 year figure to be able to compare the two? Boo!

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    I think you have to remember with isa it’s not in any way the same as BTL

    the returns are tax free so if it grows at 4% to a high rate tax payer it’s worth 5.6%

    also your risk is low compared to BTL especially if your leveraged

    I use them today and I have returned higher rates that this says

    the great thing is you can get in and out quickly and the investment choice is huge


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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.


    Tax free is great but can be a bit of a red herring sometimes

    I would rather make 20 % - 40% in BTL and be taxed 20% corporation tax on it....

    ......than get an ISA  @ 5.6% tax free

    I jacked in all my ISA `s when  i discovered this

    The great thing  with BTL you can in and out quick at an auction and the investment choice is huge

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


    I think you should check out some of the funds I am useing

    try this for a sample

    Lindsell train uk equity

    lindsell train global

    it my suppriise you to see the growth achieved over a long time JC and it’s all tax free infact is a pension and get 40% uplift from day one

    with out a lot of work

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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.


    6 months 10%

    1 year 13%

    three years 51%

    5 years 80%

    10 years 332%

    this is not a fluke it’s 10 years of good investment

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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.


    Understand you can do much better than 5.6% and you have done well

    My fear is any isolated fund/ share can drop  40% overnight so I don`t want to take that risk

    That wont happen in property though

    And the 40% uplift day one you mention is not a physical uplift -  its just relief  so not cash in your hand

    There is work to set up a BTL agreed but its not exactly slave labour. Its quite fun I find 

    But then an LA could  take over just like your broker does for a % so income and growth becomes passive

    So I respect your choices but I`m afraid I  wont be checking out Lindsell Train UK equity tbh

    I get my kicks checking out  a 3 bed last week and offered

    PP  210K   Refurb  12K    End value maybe  260K .

    So if it was 75% LTV  thats about a 60% gross ROI before fees/ costs etc in 4 weeks after completion


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


    You see you miss a very important issue JC

    lets say Property dropped by 40% would you sell

    I don’t think you would you would hold and maybe buy more property at a lower price

    fund investment is the same an investor who saw a fall would buy into the market

    things always recover

    and if your savvy you buy when it’s falling

    nothing is lost unless you sell

    I never sell property and I never sell funds

    there one in the same thing

    you use JC law because you know over 20 years Property will rise

    well the stock market is the same


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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.


    But  they are not  the same really are they

    Property dropping by 40% overnight is unprecedented .

    Shares however can be wiped out overnight .

    Your money is locked in . You cant do anything with it. It just a dormant investment

    One must compare like with like

    Shares  have major limitations over BTL

    1.  You cannot leverage . A bank wont lend you 75K to buy a 100K share

    2. You cannot refurb . You cannot add a kitchen to a certificate and make it look any prettier

    3.  You cannot extract equity growth and buy more shares but keep the original value built in

    This is why BTL beats funds

    Yes over 20 years if you dont sell and just buy they will both rise I agree but so what

    Its meaningless really and doesnt go to the heart of the differences between  the two investments

    The share certificate does sod all in that 20 years. Its bone idle

    The BTL property works hard for its living in that 20 years and as a result brings home far more cash

    Because BTL is so flexible you can buy 20 fold more  in that 20 years

    Therefore assuming the base value of both rises the same you can still make 10 times as much

    If you have 100K you can only buy 100K of shares but you can buy 400K of property

    Then repeat and buy maybe 400K more in 5- 10 years so you have 800K

    You still only have 100K of shares . If you buy more you have to find funding outside

    And if you say dividends I will simply say rental income

    But your original 100K share investment is motionless ,cryogenically frozen for that 20 years

    But you know all this  DL already . You play devils advocate .

    I am preaching to the converted - someone who has already made her fortune in property

    But you unfortunately are currently a disillusioned convertee so you I guess just want reassurance that despite Osborne property has survived and will thrive

    I am that voice of reassurance. Don`t be fearful DL the storm will pass and the sun will still  rise  :-)

    What is wrong with my sample deal that would lead someone  not to buy it ?

    If we are to compare two products we owe it to ourselves to draw true comparisons

    Don`t play down the benefits of property over shares to fit your choices you make today

    You are wise enough to know the full pros and cons of both

    Both can be good but property is many times better

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