The Four Horseman of the BTL Apocalypse.

Thrugelmir

julieq wrote: »

No I haven't, I've been very consistent throughout. Why not go back and find the point at which I said what you're suggesting I said? And I don't have a BTL, I've explained this many times.

I actually do have the cash to buy a house as an investment. I'm not doing it mostly because I need access to the cash for school fees. I'd probably buy into a fund investing in residential property though.

As to what the best vehicle for investments is, it's mostly about risk management and where the profit actually comes from. There is no point in having a tax efficient investment in a loss making direction. I consider stocks and shares far too volatile, but I look at the nice stable income available from rented accomodation and it looks attractive.

Lets see what unfolds in the year(s) to come. We are in uncharted waters in terms of an economic situation. School fees are a far better investment than a BTL property ( at least until the market normalises some point in the future).

From your comments regarding manufacturing in previous posts. Are you seeing a significant upturn ? Or are Companies still shedding staff and reducing working hours?

julieq

nearlynew wrote: »

Oh julie.

So consistent, so articulate, so charming. :kisses3:

And a frustrated BTLer afraid to put her money where her mouth is.

My dreams are shattered.

Why is that the bears always end up resorting to spiteful and sarcarstic comments?

Is it maybe because their arguments are running out?

nearlynew

julieq wrote: »

Why is that the bears always end up resorting to spiteful and sarcarstic comments?

Is it maybe because their arguments are running out?

What I said is hardly spiteful is it?

A lightehearted dig, at worst.


Lighten up julie.

Thrugelmir

RDB wrote: »

I agree with this, most forget about the tax man until they get investigated, and he can go back years.

Whats the other game your talking about? Precious metals? Silver in particular is way undervalued if you research it, but not for long.

The tax man can go back as far as likes. Once over 6 years the tax is assessed and there's no right of appeal.

As for the current game, no idea to be honest.

By the time it reaches the media the professionals have all ready bought their stakes!

In my mind its contrian investment. Buy what others are ignoring. Take the stock market for example. No ones buying as its fallen. However the "buyers" are the market! So in that respect I'm happy if its offtrack for most people.

We had a thread that included return on BP shares for past 15 years. With reinvested dividend income the return was quite staggering. Reinvestment of investment income like saving seems out of vogue at the moment.

julieq

Thrugelmir wrote: »

From your comments regarding manufacturing in previous posts. Are you seeing a significant upturn ? Or are Companies still shedding staff and reducing working hours?

There is an inconclusive upturn from a low level to be honest. Anything connected with the automotive industry is moribund, that includes a lot of chemical companies, other sectors are doing better, life sciences for example. What is difficult is pulling out the trend, there are short term effects related to (for example) restocking the supply chain as it empties and the effect of the holiday season in Europe this month.

I don't think there will be a substantive improvement for a while, that does mean some layoffs, but the difference between now and previous recessions is that there isn't a lot of slack to cut in most businesses, companies now have to choose to stop doing part of their activity. So you'll hear the idea of "portfolio review" coming up a lot in presentations of quarterly results I suspect.

the_ash_and_the_oak

When a bears arguments run out, it is because they have become a bull (and vice versa)

Thrugelmir

the_ash_and_the_oak wrote: »

When a bears arguments run out, it is because they have become a bull (and vice versa)

Well put....... Seems to describe all areas except for property for some reason.:rolleyes:

pete80

chucknorris wrote: »

Exactly my point but they actually think they are business people.

It's unfortunate for those that reduced their portfolio in 2005 becuase I think they would have actually lost out (especially if they expected to buy back in later) because of:

1. CGT was paid at 40% (now 18% this is the killer!)
2. Estate agents fees at around 1.75%
3. Stamp duty
4. Voids whilst selling
5. Missing out on very profitable rents due to interest rates collapse
6. Missing out on decebt savings rates as interest rates collapse
7. Solicitor's fees buying
8. Solicitor's fees selling
9. Giving up decent mortgage interest product deals
10. Having to accept much poorer mortgage interest product deals
11. Selling off furniture or paying storage until buying back
12. If they didn't sell at exactly the top of the market they do not gain the full difference, exact timing is down to luck.
13. Misc. fees ie valuations, mortgage arrangement etc.

Not to mention the stress and time and effort, but as I said the CGT from 40% to 18% was the killer, that takes a hell of a chunk out of their expected gain

Good post there Chuck, I bought a few BTL's in 1999/2000 and was reading some articles after the pre-budget report in late 2007 concerning the effects of the 18% CGT rate.

Predictions were being made about vast numbers of BTL landlords dumping their properties on the market to take advantage of the lower CGT rate but that did not seem to materialise. I decided to sell mine and found new landlords as buyers straight away by printing up leaflets and handing them to people who were just leaving BTL weekend seminars. £24 for some leaflets and a few hours of my time on a Sunday afternoon paid off handsomely.

I would be wary about re-entering the business again in the future because as things stand at present as you quite rightly point out, the mortgage deals are not so good. Also I am not sure if the PPR and Lettings reliefs will still be around in the future as these are great tax planning tools. It looks like I shall probably keep 50% cash and 50% in a wide spread of investments.

Out of curiousity did you consider selling up yourself in April 2008?

chucknorris

pete80 wrote: »

Good post there Chuck, I bought a few BTL's in 1999/2000 and was reading some articles after the pre-budget report in late 2007 concerning the effects of the 18% CGT rate.

Predictions were being made about vast numbers of BTL landlords dumping their properties on the market to take advantage of the lower CGT rate but that did not seem to materialise. I decided to sell mine and found new landlords as buyers straight away by printing up leaflets and handing them to people who were just leaving BTL weekend seminars. £24 for some leaflets and a few hours of my time on a Sunday afternoon paid off handsomely.

I would be wary about re-entering the business again in the future because as things stand at present as you quite rightly point out, the mortgage deals are not so good. Also I am not sure if the PPR and Lettings reliefs will still be around in the future as these are great tax planning tools. It looks like I shall probably keep 50% cash and 50% in a wide spread of investments.

Out of curiousity did you consider selling up yourself in April 2008?

No because I am getting decent returns on them and also because I do not really intend to sell up until about 2020 (obviously depending on the market at the time). I have however recently decided not to buy more, although I am happy enough with my current properties I don't think it's a good idea to buy more when I am intending to sell up as early as only 10 years time.

I do think there is a future for BTL but I think investors should be taking a long term view (longer than 10 years)

Thrugelmir

chucknorris wrote: »

No because I am getting decent returns on them and also because I do not really intend to sell up until about 2020 (obviously depending on the market at the time). I have however recently decided not to buy more, although I am happy enough with my current properties I don't think it's a good idea to buy more when I am intending to sell up as early as only 10 years time.

I do think there is a future for BTL but I think investors should be taking a long term view (longer than 10 years)

Did you buy your properties on I/o mortgages, or did you factor in capital repayment from the rental stream?