Is BTL now the best retirement investment?

chucknorris

I have been a landlord now for 20 years. Yes financially it is very good but I really do not want to be dealing with landlord/tenant issues in my late 60's and beyond.

Surely at that point in life everyone's priority should be to enjoy themselves rather than make even more money that you will die before you can spend it anyway.

Cleaver

You can't say that a BTL or a pension is 'risky' without knowing the detail of diversification. Investing all your money in one asset class is, by definition, risky.

Cleaver

PasturesNew wrote: »

I'd not fancy being a LL. It's probably because what I've read on these forums terrifies me

We were landlords for 4 years or so and didn't get a single bit of hassle for the whole period. We had a letting agency and had an arrangement where anything that needed doing under £300 got done without us being asked. We were very, very lucky with the tenants we had though. Although maybe that was our letting agency getting us good tenants? I dunno.

lisyloo

One thing that has always made me curious is why some on here who claim to have sums large enough to buy decent houses in good areas don't just buy two or more smaller ones with the money outright.

Well I can answer from my POV.
I love living in my large house. We have a nice big kitchen and have enough room for all the stuff we want (piano, gym equipment etc.), Double garage etc.
Living in a nice area is great too, I can walk to the shops, into town and to the railway station, we have virtually no crime and it's quiet.

I can see the financial attraction to BTL, but we work hard full time and I really don't fancy the work (the DIY parts or tennants calling you all hours).
If you have a demanding job, then that could be quite difficult. I guess you can pay agents, but that costs and the people that make most are those that do decorating and repairs themselves rather than paying commercial rates.
I also have heard one or two horror stories e.g. tenants not paying up, police breaking in and doing damage, tenants stealing furnishings.
I am not overreacting but I do think the risks and the work involved have to be taken on board.
If you have a demanding job and other calls on your time (we have elderly parents) then that part is unattractive.
A pension from work gets money from the employer plus 40% tax relief and takes little work.

Obviously it's a choice and good luck to those that do it, but it's not for everyone.

Blacklight

When was the last time your pension pot went up 25% in one year. It's a no brainer.

mystic_trev

Blacklight wrote: »

When was the last time your pension pot went up 25% in one year. It's a no brainer.

Last year actually. This year my Low risk Portfolio is running at 5% + divis and my higher risk 18% + divis. Property has outperformed Equities for the last ten years,but at the moment it's stagnating and probably will for the next few years, so not such a good investment bearing in mind inflation is currently 5%

I'm not saying Property isn't a good Long term investment, when bought at the right time, and I'm still keeping mine I bought in the mid to late 90's. Having been to Allsops latest auction there's no way I'd buy at the moment,the Properties I was interested in would only yield 4% gross, I'm not in the business of subsidising Tennants.

Procrastinator333

Blacklight wrote: »

When was the last time your pension pot went up 25% in one year. It's a no brainer.

A basic rate taxpayer puts in £8. Tax relief of £2. That is a 25% gain in 1 day. A HR taxayer gets a 67% gain on day 1. And that is not including any employer contributions.

HAMISH_MCTAVISH

mystic_trev wrote: »

Properties I was interested in would only yield 4% gross, I'm not in the business of subsidising Tennants.

Not great. I've seen stuff up here lately getting 8% gross.

National average at the moment is 5%, which with a decent deposit and the current low void averages, is just about enough to break even from a cashflow perspective.

Of course, ultimately, even when you do subsidise a tenant by some small amount for the first few years, it's still the only commonly available investment I can think of that someone else buys for you.

So long as you can withstand the cashflow issues, it's the closest thing to free money there is.

abaxas

The issue with BTL is that most wont be bothered when they are later in life. How are you going to get rid of the non paying tenants when you are urinating yourself in a care home?

Dave101t

you could even....save up your pennies for 20 years, buy a 2nd house outright, then rent it out with no mortgage at all, free money from the off!