Can you help me with my 50K?

Radiantsoul

jabba42 wrote: »

I do not not live in the UK anymore but I have seen quite a lot of people negatively commenting on BTL on this site. Personally I think it is not good on a small scale as you are a) getting leverage b) investing in one asset class. What are current returns on such an investment?

The problem is there is too much positivity towards BTL imho!

The problem for me is that it is a business and so it requires some skill to make above average returns. It is very illiquid and prices of the underlying asset are volatile, there is a lot of regulation(and the risk of more), one bad tenant can easily wipe out several years profit(by not paying or trashing the place).

SkippyTheBushKangeroo

Mirno, that's fab, thanks, very clear. Are there recommended places to find a Stocks & Shares tracker? Have never had financial dealings outside of High St banks, so it's a bit unnerving!

I'm rather going off the BTL idea! Although it did occur to me that once we've done our house up we'll be hoping to move to something a bit bigger, so perhaps if I still had landlady aspirations we could rent out our place then.

jabba42

Radiantsoul wrote: »

The problem is there is too much positivity towards BTL imho!

The problem for me is that it is a business and so it requires some skill to make above average returns. It is very illiquid and prices of the underlying asset are volatile, there is a lot of regulation(and the risk of more), one bad tenant can easily wipe out several years profit(by not paying or trashing the place).

How are you doing overall in % return?

Mojisola

SkippyTheBushKangeroo wrote: »

Have a partner and a child, mortgage and deeds are in partner's name although we contribute equally.

SkippyTheBushKangeroo wrote: »

The house we own does need some work doing to it, probably about 6 grand worth.

You mean the house your partner owns!

If you are not married, you have no rights to the property or any money if it is sold or you split up.

If your partner hasn't left it to you in a will, you won't inherit it if your partner dies.

xylophone

http://www.guardian.co.uk/money/2013/mar/09/cohabitation-agreement-essential-non-married-couples

On the subject of pensions, I have about 6K in an occupational pension from a former job, should I leave it there or try to move it into my personal pension pot?

Final salary/defined benefits? http://www.which.co.uk/news/2012/06/60-second-guide-to-final-salary-pensions-288360/

atush

there are all kinds of trackers and life styling funds.

Look at the HSBC trackers. There are different classes, and here we like to recommend the cheaper clean Class C trackers. They carry less int he way of fees and charges than the retail class. Then you can choose income or accumulation. Use acc ones as you are not taking income now, and this will compound your interest.

If you want just UK exposure, I am more a fan of ftse 250 rather than ftse 100. Or you can look at global trackers that also track other stockmarkets around the world.

The other options are lifestyling funds such as the Vanguard series. These invest in equities and bonds, in different percentages such as the 80/20 which is 80% equities, 20% bonds.

sangman

A quick comment on the BTL returns because I have done BTL. When comparing the income with other investment choices, make sure you compare the net income you will get. So with a BTL:

Rental Income minus:

Agents letting fees (they differ but allow 10%)
Allow 5% for maintenance (can be less, can be more, depends if you let furnished or unfurnished and age and type of property)
Ground rent unless freehold.
Property insurance, usually mandatory with a mortgage
The mortgage repayments

All the above costs are tax allowable on the income, so calculate your income tax on what remains - this is your net income.

Now, To be conservative, subtract 5% of this for void periods. Compare that with the net income you will get on anywhere else you invest your money.


On the plus side, you may want to assume some increase in the value of the property, but that won't give you cash income until you sell.


I am not against BTL, I do it and think it is good when you also have other investments. But as a main investment, only if the figures make sense compared to other choices and getting opinions here is a good starting point.

atush

I am not anti BTL.just anti BTL for inexperienced investors, those not in the trade, and for anyone who is thinking of investing most of their available assets.

If you had say 400K, and invested 100-150K in them, fine. As long as you know what you are doing (which most here who ask the Q don't)

SkippyTheBushKangeroo

atush wrote: »

there are all kinds of trackers and life styling funds.

Look at the HSBC trackers. There are different classes, and here we like to recommend the cheaper clean Class C trackers. They carry less int he way of fees and charges than the retail class. Then you can choose income or accumulation. Use acc ones as you are not taking income now, and this will compound your interest.

If you want just UK exposure, I am more a fan of ftse 250 rather than ftse 100. Or you can look at global trackers that also track other stockmarkets around the world.

The other options are lifestyling funds such as the Vanguard series. These invest in equities and bonds, in different percentages such as the 80/20 which is 80% equities, 20% bonds.

Struggling a bit with the HSBC site, not sure what I should be selecting for 'sector' or 'provider'.

atush

select HSBC for provider