Buy to Let investment advice

Thrugelmir

andybenw wrote: »

However with non risk shares I remember reading about what a great yielding share Connaught was (Not long before it went bust). I'm sure it was in a lot of top picks on this site if I remember correctly.

As is often repeated. The majority of gain from investing in shares comes from reinvesting the income rather than capital growth.

With a broad portfolio you can cover the risk of companies going bust etc. As they always have done and always will do. Today only 3 companies remain that were included in the original FTSE 30.

BTL seems to be a fad (like dotcom) where investors think quick easy money can be made. Whereas the enviroment that made the boom possible is now consigned to the history books.

brianrhill

andybenw wrote: »

I must admit I had a few shares prior to 2008 and they took a pounding compared to house prices. And although they recovered most of their value this probably skews my view somewhat. They were I will admit in the higher risk AIM, but still it showed me how the owning of shares could be regarded as somewhat akin to gambling if you pick the riskier types.

However with non risk shares I remember reading about what a great yielding share Connaught was (Not long before it went bust). I'm sure it was in a lot of top picks on this site if I remember correctly.

I am talking low liquidity really in that within the current market the only things that sell quickly in my area are cheap repos. I balance this against the up and down nature of shares. That low level of liquidity could be a saviour as compared to selling shares at an unadvantageous level. The huge capital Gains bill is not going to happen at the low value 100k property that I will be buying unless they change the rules.

Anyway I'm babbling. What would be the better ideas for me Brian?? I'm genuine here and not a housing nut.

For people who really want to invest just in property, a Real Estate Investment Trust (REIT) could be a consideration.

Limited asset class, but more liquid than BTL, indirect investment in commercial and residential property and spreading the risk on more than 1 share of 1 property.

http://www.bpf.org.uk/en/reita/index.php for more info (I'm not connected in any way - it just looks like a useful website!!)

andybenw

brianrhill wrote: »

For people who really want to invest just in property, a Real Estate Investment Trust (REIT) could be a consideration.

Limited asset class, but more liquid than BTL, indirect investment in commercial and residential property and spreading the risk on more than 1 share of 1 property.

http://www.bpf.org.uk/en/reita/index.php for more info (I'm not connected in any way - it just looks like a useful website!!)

What would the return be from an REIT. Would the profits be dragged down by management fees.

andybenw

Shares in listed property companies are significantly more volatile than direct property investments or unit trusts, and perform more like equities than property. However, in the long-term, their performance is more closely correlated with property than equities.

Recent performance has been much poorer than for direct property, and shares in REITs have also continued to trade at a discount to Net Asset Value, despite the removal of the tax inefficiencies that were a major explanation for the discount.






Quote above from the website you directed me to brian. Not sure if I like the idea with the prospect of possible house price falls if things go wrong.


Looks more illiquid to me in a way as you would have to sit on your hands at times or take huge losses???

besti

With BTL at least you are in charge of your destiny, you don't have IFA's, Bankers and fund managers all taking their cut or insider dealing . The stock market and funds are there for one reason and one reason only, to make bankers richer. The old addage is still true "buy land, they don't make it anymore"

CannySaver_2

besti wrote: »

With BTL at least you are in charge of your destiny, you don't have IFA's, Bankers and fund managers all taking their cut or insider dealing . The stock market and funds are there for one reason and one reason only, to make bankers richer. The old addage is still true "buy land, they don't make it anymore"

But you do have estate agents, letting agents etc etc taking fees, just replacing one with the other.

Exactly how does a fund with say M&G or Invesco make a bank richer?

As a country we need to stop blaming banks for all our ills, yes there have done wrong, and yes they need reform, but they are not the route of all evil (just some of it!).

The Canny Saver

CannySaver_2

PS I'd also dispute the line that "you are in charge of your own destiny", the value of your asset will move in line with the housing market's general trends, if you are leverging you are at the whim of the banks to lend, and tenants can frankly be a pain in the ar*e

besti

If the Invesco fund goes down in value does the fund manager still get his bonus? Yes. I was an IFA for 10 years and all we saw was new products being pushed by the banks that are designed to make the banks richer. Nothing wrong with that except that they try and spin it to say how great it is for the client. My clients who made the most over the years always had BTL portfolios with terraced houses renting to families. No rental agents involved either.

somethingcorporate

besti wrote: »

If the Invesco fund goes down in value does the fund manager still get his bonus? Yes. I was an IFA for 10 years and all we saw was new products being pushed by the banks that are designed to make the banks richer. Nothing wrong with that except that they try and spin it to say how great it is for the client. My clients who made the most over the years always had BTL portfolios with terraced houses renting to families. No rental agents involved either.

A whole bunch of amateurs made a killing due to rising house prices, it's hardly a skill and was just due to timing. Those days have now gone so to recommend a way forward based on this history is somewhat blinkered in an approach.

atush

besti wrote: »

With BTL at least you are in charge of your destiny, you don't have IFA's, Bankers and fund managers all taking their cut or insider dealing . The stock market and funds are there for one reason and one reason only, to make bankers richer. The old addage is still true "buy land, they don't make it anymore"

Wrong. You aren't in total charge of your destiny. You still deal with banks for mtg and checking, you have insurance and liability issues, council codes for rentals, tenants, agents, maintenance, vandalism- the list goes on.

Nott o say it can't make a good investment, but never should be your whole investment strategy.