Is BTL now the best retirement investment?

robmatic

abaxas wrote: »

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?

I imagine a letting agency will take care of that for you, perhaps in exchange for a percentage of the rent?

abaxas

robmatic wrote: »

I imagine a letting agency will take care of that for you, perhaps in exchange for a percentage of the rent?

If you really think it is going to happen, you should visit a home.

ACtually see what happens to people when they are too old to care for themselves.

robmatic

HAMISH_MCTAVISH wrote: »

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.

The rental market in the 'Deen is a bit untypical though because of the oil industry.

A gross yield of 5% doesn't seem that tempting a proposition when you knock off the letting agent's fees and the cost of servicing the mortgage.

Just had a quick look at BTL mortgage rates and jeez, they are not cheap. 5% APR when gross rental yields are 5%?

robmatic

abaxas wrote: »

If you really think it is going to happen, you should visit a home.

ACtually see what happens to people when they are too old to care for themselves.

Why would a letting agent not fulfil their professional obligations?

julieq

Very dumb initial question. If there was one "winning" investment, then everyone would take it on and no-one would make any money. Investment opportunities change over time.

And an equally dumb set of replies suggesting that because some level of work was involved managing lets it is a poor opportunity. Unfortunately there are very few opportunities that don't require you to do some level of work to get a return. For the same reason as previously, i.e. if it was easy everyone would do it and the value would disappear.

What you can say about BTL is that in a supply constrained market, you'll get moderate and relatively safe yield which currently beats what is available from savings rates. There is also a good chance of capital growth over a 5-10 year period given that sentiment in the housing market is very fragile and mortgage finance is being held back, i.e. once either comes back there will be strong growth back. In the continuum of risk it's safer than stocks and shares, which I'd be very hesitant about at present since my judgement is that this year is going to be very rocky indeed.

So I'd say that on a balanced view it's a reasonable investment, but that unfortunately for the lazy there are no fire and forget investments ever.

[Deleted User]

lisyloo wrote: »

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.

Sorry, I didn't make myself clear, I was addressing that to those who claim to have sufficient to buy a large house in a nice area outright but were renting and waiting.

They could buy the one they want on a mortgage and buy at least two others and probably have the whole lot self financing. I would have thought that offsets their supposed advantages of waiting for a fall in prices if that comes to fruition.

I disagree with the time/effort as you can just pay someone else to take care of that but BTL isn't for everyone, and I must admit I have a 'normal' pension as well.

antrobus

HAMISH_MCTAVISH wrote: »

Even if you made no profit from rent during the term of the mortgage (virtually impossible BTW)....

Oh it's perfectly possible to make a loss on BTL. I've seen plenty of accounts for BTL landlords where the figure at the bottom of the page is in brackets. There are also a number of threads here on MSE from BTL landlords who are on the rocks, so to speak. Such as this one
https://forums.moneysavingexpert.com/discussion/3232950

[Deleted User]

antrobus wrote: »

Such as this one
https://forums.moneysavingexpert.com/discussion/3232950

Not the most convincing post is it? It seems to be yet another post aimed at creating a false impression.

The problem with this sort of thing is if someone were to take it on face value they might miss opportunities or make bad decisions as a result. That doesn't say much for the sort of people who post them.

Fortunately you'd have to be as thick as the person who posted it to believe this one.

Pimperne1

antrobus wrote: »

Oh it's perfectly possible to make a loss on BTL. I've seen plenty of accounts for BTL landlords where the figure at the bottom of the page is in brackets. There are also a number of threads here on MSE from BTL landlords who are on the rocks, so to speak. Such as this one
https://forums.moneysavingexpert.com/discussion/3232950

That post is a little suspicious to me. First time poster and you flat batted it right back without enquiring how over such a potentially profitable period the idiot had managed to lose when nearly everybody else was gaining. If he was stupid enough to lose money over that period then he might as well just give the properties to the tenants. Some people just do not have the business acumen to run a BtL business; probably good for all of us that they are found out soon (although if he managed for 10 years, as I say, it's all a bit fishy).

HAMISH_MCTAVISH

[quote=[Deleted User];44022776]Not the most convincing post is it? It seems to be yet another post aimed at creating a false impression.[/QUOTE]

I see the Ministry of Crash propaganda efforts are still alive and well.