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  • Property-a-holics

    My own SIPP & ISA performance figures

    I think if Labour come to power We will have changes

    BTL has become so political and its not a nice place to be

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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.


    Hi DL,

    I've read your posts that have referenced your dabbling in listed equities before with interest, it's an investment class that I knew and used long before I ventured into BTL.

    It's interesting to read that 'fund X has done X' etc, but for those with less background in equity investing it may be counterproductive to summarise your performance in this way, it's like saying 'wow, my house on X High Street has performed really well over the last 5 years, the price has risen 40%'.

    Instead, what's important to keep in mind is that diversification and minimisation of fees are what lead to best performance for most people with equity investing. Rather than paying 1%+ for a fund manager to invest in something for you, statistically the best approach for most investors is to find the lowest fee broker they can, and chuck it all into low fee index trackers (Vanguard, iShares etc). I know it's lovely when something like Fundsmith or some esoteric Ukranian growth trust does well, but it's not reflective of the overall investment class. Pension and fund managers sucking high fees from retail investors are just as much a bane on equity investing as taxation and legislation are on BTL...

    For my own purposes, I'm in a similar boat to you. Even aged 30 with a very long term perspective, I'm struggling to envisage value in BTL compared to other investment opportunities, mainly due to the taxation regime. We've got 3 currently unencumbered BTLs, so the 'traditional' thing to do would be to borrow against them and use this for further BTL purchases. What I'm actually planning to do is borrow against them at 60% LTV, fix it for 5 years, and invest it in equities. This will be done via a directors loan into a Personal Investment Company (where you are able to hold either equities or commercial property). This company won't pay any tax on the dividends it receives from investments (because the underlying investments have already paid corporation tax), it only needs to pay (soon) 17% corporation tax on profits, and I can draw down from the directors loan account whenever needed to cover the interest on the mortgages etc. The mortgages will be at something like 2.1%, whereas I could build a portfolio that yielded 3.5% so the dividends can easily cover the interest payments, with some prospect for long term capital appreciation too.

    It feels like a no-brainer if your timescale is long enough for the underlying investments to have close-to-guaranteed growth (think 10-15 years+), and it's mainly because of the tax on BTL. I can use any leftover dividends in the PIC each year to fill our pensions, and leave the investments themselves in there to compound and appreciate long term. If I wanted to, I could even buy REITs, so still be investing in property but just in a much more tax efficient setting, with much improved diversification, and with someone else doing all the legwork. I think many underestimate how 'risky' a concentrated, location specific BTL portfolio is when you contrast it with something like a REIT that holds hundreds of properties all across the country. (As it happens, I probably won't buy any REITs, I'll just buy a world tracker). People dismiss equities because they either have short term views/objectives, or because 'oh but what if the price goes down', but they don't understand it's just an issue of visibility: The price of your BTL may also go down, you just don't realise it at the time, it's only apparent with equities because you can check the value so easily. If my equity portfolio was down in value after year 1 or 2 I wouldn't care, I would still be confident that in year 20 it would be much higher, which is no different to how anyone's view on the property market should be.

    All I care about is the picture 20 or 30 years down the road, and in my view, today, that investment presents a much better opportunity than BTL. Maybe this warrants its own topic, happy to discuss in more detail.

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    Thank you for such a good replay

    Its funny you have said about borrowing money to invest

    I got an offer yesterday from my bank to borrow 30k at 3% APR

    and I have a similer view to you Go for a Platform with low charges Invest the Loan in Equity via an ISA and I think its going to do well over 5 to Ten Years

    Its Ironic I can get a Personal loan for 30k so easy but the hurdles i have to jump through to get a Mortgage  for 60k is unreal and the fees and costs are huge compared with a Personal loan in 2019




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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.


    Yep, it's scary really.

    I think a lot of it comes down to the classic issue of 'I can touch property but I don't understand the stock markets'. They're such similar asset classes in a lot of ways. What's important is long term perspective with both, and if money is then invested sensibly it should result in the same long term outcome: Growth.

    I'm happy to borrow for equity investments because, just like property, I know inflation will eat away at the borrowing but help grow my investments. The point of 'oh, but my shares may have gone down and i can't repay the borrowing' is moot, exactly the same can happen to your property investment. As you say, the options for borrowing outside property are actually scarily easy. That said, I don't think I'd ever borrow in any way other than a mortgage. Interactive Brokers will also do you a margin loan on your equities held with them at under 2%, not something I currently do but I know a lot of others do, and I may explore in the future if my 'overall leverage' ie borrowing compared to net worth, isn't too high.

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    When I hear someone say of shares can go down I then relise the Stock market is not for them

    Just look at the past few days the Market has dropped because of Trump

    So yesterday I invested more cash in the Stock market  its a buying opportunity

    I have met Millionaire ISA owners and from what I can see there sitting on a 50k income tax free how good is that 

    I went off the stock market and played the BTL game in hindsight I wish I had done Two things 

    One being a NE Landlord I had gone Capital and Repayment and carried on investing in the stock market 

    Im  60 now and I do both today 

    There is no harm in diversification


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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.


    There are massive differences in investing in property or stocks/funds.

    I control everything about property and I make or lose money on it depending on how skilled and experienced I am.

    The only thing I control about stocks/funds is which one I buy into. After that I hand over all of the decision to others and my profit will depend on their skill and integrity.

    I trust that I will make better decisions with my money myself.

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    I control everything about property

    I am not sure the above is True ??

    Can you control the way you are Taxes S24 ect

    Can you Control an Estate agent who will charge you more in fees due to tenant ban

    Can you control Rent Control when it comes

    Can you control Licence fees for every one of your Properties

    Can you control that more CGT is paid on Let property than any other asset and you pay the tax quicker

    Can you control a stricter Tenancy Agreement when it comes

    Can You Control PRA

    Can you Control IHT when you die ie pass it on avoiding IHT via a Pension

    Can you sell quickly with low cost in BTL

    The above is only a sample of what you cant control  The problem with BTL is we are losing control

    and for this very reason I invest in other asset classes in 2019

    I am an old Landlord and I can go back when we had control over little? I believe the old ways are coming back

    we will lose control due to Regulation and Taxation







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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.


    I control my tax position

    I control whether or not I use an estate agent and which one I use

    We don't have rent control yet

    I decide whether or not to buy a property within an area of licence fees

    I control the structure I buy my rental properties in to minimise capital gains tax

    We don't have stricter Tenancy Agreements yet but if we will, then I will make sure that my tenants will fit the profile I want

    I control what sort of properties I buy within the PRA

    IHT is not yet a concern for me

    Yes, it takes time to sell a property at fair value, but you have to be aware of that and make sure you are never forced to sell. This is the 101 of property investing.

    The fact of the matter is that the world is changing. There are no secure jobs for life any more and you have to have supplementary income to fall back on for when you are not working (even when you are young) or retraining. And BTL is still excellent for this.



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    Your missing my point your being forced to lose control by rules

    and the rules will become harder to navigate long term

    Give me one rule which has changed the PRS for the better in the past years

    Have you noticed how Vets and Dentist and solicitors Funeral Directors  have sold small practices to large Companies

    why do you think this is happening ??





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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.

    Ok, there are more rules an its harder than it used to be.

    So, shall we all do nothing, not aspire to anything, just soldier away in a big company until we are chucked out as redundant and then chew dry bread because thats the only thing we will be able to afford on our meagre pensions?

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