Buy to Let with Equity from Home

BobProperty

sukey13 wrote:

Buy, buy, buy

...but then I am biased - as we now have 13 buy to lets (must update my profile).

Just look at the Wilsons for inspiration, they are now in the rich list with over 500 properties in Kent.

Other inspirational reads are Angela's Way (another UK property investor), Russ Whitney's Rags to Riches through real estate, Dolf De Roos "52 houses in 52 weeks"...

If you haven't read it already read "Rich Dad Poor Dad".

Property is an asset which will go up in value. Rich people own assets, their money makes them more money.....

I've read "Rich Dad, Poor Dad" it's all very nice but doesn't tell you anything, neither do Dolf de Roos's books, IMHO. If you want a different slant on some of these "great" property gurus read http://www.johntreed.com/Reedgururating.html

Oh, and property doesn't "always go up in value" as has been pointed out by others. Anyone remember LadyLea? She was doing very well in property, until it all went wrong. Yes, some people have done very well out of investing in property, but the same can be said of any investment class. If you go looking for them, you can find books, courses, etc. on Commodities, Currencies, Gold, Bonds, Warrants, Shares, Antiques, Vintage Cars, Wine, etc. etc. Surprisingly all the people who sell this information all say they've made money at it.

mystic_trev

She's a "Singing pig" disciple, she won't take notice of you or anybody else Bob. I'd really be interested to know how highly geared she is? Probably near the max is my guess.It's typical of the BTL who's going to get totally shafted IF there's a correction. She's not particually savy - either. When someone pointed out to her she'd have problems if prices went down, she just said she'd buy more! Using what for equity I wonder?

Alan_M_2

Clear your debts, increase the payments on your mortgage and don't gamble on a stock market that is approaching another all time high.

Rachman's post was emminently sensible and echoed my comments albeit far more in depth.

Now is the time to consolidate not gamble.

dunstonh

and don't gamble on a stock market that is approaching another all time high.

Which stockmarket are you on about? If you assume FTSE, then currently it is not above long term average although it is getting close. The FTSE100 is also over 10% away from getting back to its previous high point.

It is worth noting the comparison between the stockmarkets and property. It you go back in time, and look at the long term average (i.e. a straight line growth betweeen the start and end point), every time either asset class has gone above the long term average for a sustained period, a drop in value or a sustained period of no growth has followed to then bring it below the long term average. Currently the UK stockmarket is below but UK Property is above.

Alan_M_2

The OP is considering investing in the stock market with what for all intenet an purposes is borrowed money, that isn't sound especially now.

Stock and shares are a form of gambling for anyone other then the very well informed and should really only be undertaken with money that can afford to be lost, or as a small high risk part of a variety of investments.

Gearing yourself up into one type of investment alone, be it property or the stock market is very unsound.

When the public at large start jumping on bandwagons, BTL, the tech bubble etc, it doesn't bode well and generally points to distorted prices and inflated values based on little more than sentiment, sukey13's post is a very fine example of this.

dunstonh

The OP is considering investing in the stock market with what for all intenet an purposes is borrowed money, that isn't sound especially now.

Why not?

Even if he had done it in 2001 before the crash and only got sector average returns he would still be up in excess of 10% p.a. average.

Gearing is higher risk but if you accept the risk then there is nothing wrong with it.

Stock and shares are a form of gambling for anyone other then the very well informed and should really only be undertaken with money that can afford to be lost, or as a small high risk part of a variety of investments.

It is important not to impose your own risk profile on to others. As long as the risk is understood and the consequences known, then it is up to the individual. Its when that isnt known that it becomes a bad move.

Most people gear to some extent. I have a mortgage which i could pay a clear a very large chunk off but I dont and invest instead. Many people are in the some position.

Alan_M_2

If He's confident He can guarantee a return greater than the interest on the money that's being borrowed then it's a good move. How do you get that guarantee? You can't it's a risk as you say.

Now seeing the position the OP is in with a new baby on it's way and the very fact that He's posed the questions He has He doesn't strike me as a budding Warren Buffett, I'd suggest the safe and comfortable move is to consolidate, but like everything it's an opinion.

Me? I don't have a mortgage, I took a bigger risk than most and all the money I have is invested in a business and I rent a home. It works for me right now as the invested money is returning way way in excess of the stock market or any house I could have bought, with the long term view that ( say in 5 years) I can buy the house I want in Surrey in full without a mortgage.

Of course it could all go tits up, but that's a risk I take for a possible huge reward, but then I'm divorced and have no children, so I can be selfish and not worry about it all.

Many people simply can't deal with the stress of this situation and the lack of a set income every month at a set time.

If I were in a OP's position my priorities would without doubt make me arrive at different conclusions.

TepidWater

Some interesting points here guys. Many thanks for taking the time to provide such informative responses.

I agree with Alan in that I'm certainly no budding entrepreneur! I'm just trying to review my long term investments.