Invest or buy property?

BucksLady

Well, let's move the clock forward and ask ManofLeisure whether he would make the same decision today. Would he invest in buy-to-let at this point in time or encourage others to do so ?

bowlhead99

BucksLady wrote: »

Well, let's move the clock forward and ask ManofLeisure whether he would make the same decision today. Would he invest in buy-to-let at this point in time or encourage others to do so ?

Well,
1) it is a moot point because he is invested in buy to let at the moment: he could cash out and put the money in an alternative asset class, but has not. So he is invested in buy-to-let at this time albeit it is de-risked from the average opportunity because he already has wonderful tenants and a lot of knowledge about his property, which the OP for example does not.

2) I imagine most lottery winners would say they would do it again given the chance. It would be difficult for them to be completely impartial and say they were lucky and made a phenomenal return on theirs but that nobody else should do it because they'd have to be lucky to get returns like that.

So,
a) if he says yes he would do it again, you can take it as a non impartial skewed response, and it doesn't mean you should take the recommendation - you should probably discard it; and
b) if he says no he wouldn't do it again, you can probably take that recommendation.

So neither of those options would result in solid advice to do a BTL.

mike88

bowlhead99 wrote: »

Well, it's a great story, no doubt about that. And I'm sure it would be encouragement to those who are considering buy-to let.

But basically if you're going to take 'encouragement' from the fact that he made it work for him, you should also take 'discouragement' from the many thousands who lose their shirts in their own BTL venture.

Very true of course. But I think the same could be said of purchasing shares. It all boils down to what you buy and when you buy it.

jimjames

BucksLady wrote: »

Wow, what a wonderful story and real encouragement to those who are considering buy-to-let.

If I said I'd invested n private equity in 2009 and the shares went up 4x in the space of a year, would that be an encouragement to buy shares?

As the warning always says, past performance is no guarantee for the future.

Daniel54

BucksLady wrote: »

Well, let's move the clock forward and ask ManofLeisure whether he would make the same decision today. Would he invest in buy-to-let at this point in time or encourage others to do so ?

For 900k in SW 19,not sure this is a typical BTL

http://www.rightmove.co.uk/property-for-sale/property-28624416.html

A modest 5% return demands an annual rental income of 45K

If I inherited 900k today this is not where I would put my money as an investment.No way.

atush

mike88 wrote: »

Very true of course. But I think the same could be said of purchasing shares. It all boils down to what you buy and when you buy it.

I dont think the same can be said of shares, if you look at the statistics going back over 100 years.

mike88

atush wrote: »

I dont think the same can be said of shares, if you look at the statistics going back over 100 years.

Yes but most people don't live that long. Certainly the original poster won't as he is about to retire.

Thrugelmir

atush wrote: »

I dont think the same can be said of shares, if you look at the statistics going back over 100 years.

Shares is a very generic term.

Wasn't Enron the company of the year in 1995, 1996, 1997, 1998 and 1999............

People get sucked in if there appears to be easy money to be made. As are blinkered and generally lazy.

Many of us have lived through an interesting period of time. I doubt that the next 50 years is going to be anything like the past 50. For a multitude of different reasons.

ManofLeisure_2

Crikey, you have stirred up a hornet's nest BucksLady , but many thanks for your kind words.

I acknowledged in my original post that I had been lucky with the property I had bought. Actually Daniel54, the property was a 3 bed semi and situated in Merton Park This area is a little cheaper than Wimbledon. £900,000 is a conservative valuation and it's probably worth more.

I think the question BucksLady is really asking is whether I would enter the world of buy-to-let today. The answer is yes, but it would not be in SW19. There are areas of London which I would consider more investable. However BucksLady, I have no desire to do so

A few years following the purchase of the Semi, I entered the world of Commercial Property and that was quite by chance. A building near to where my brother worked, came up for sale. It was in a dreadful state, but had originally been home to an Estate Agents. 'We' decided to buy as the price was so low, and then completely renovated the place. Eventually the Ground Floor was rented by another group of Estate Agents and the Upper Floor (2 bed flat) to a couple. The whole project was financially lucrative, but such a hassle. In particular, the Estate Agents were 'always' behind with their rent. We sold after about 9 years, taking a good profit, but echoing the words 'never again'. My point being is that you guys are right in saying that buy-to-let isn't always easy - it most certainly isn't.

My advice to the OP is the same - invest only in what you understand

BucksLady

Thanks for answering my question ManOfLeisure. I think you've really done well with your property investments. To venture into commercial property - that does seem to be a brave move - glad it worked out for you.

Rest of you guys..... Well at least ManOfLeisure won't go to bed each night fretting about the Footsie. Or won't spend months on end wondering which Investment Trust is best . I personally don't think his success is down to luck - he sounds pretty shrewd to me. Hey, but what do I know