Are you all invested in properties?

inflationbuster

Own the home and a commercial property since University yielding 9% gross.

In addition, have a portfolio of stocks across mostly FTSE100 and a few FTSE250 companies, a stock ISA and recent investor in premium bonds.

Ryan_Futuristics

remorseless wrote: »

Say you had 100K invested in property funds or 100K invested in a property through BTL. Which one would you feel is better?

I am trying to get my head around about property funds rather than a tangible property!

I'd take a fund, but a closed-ended one

The big risk with property funds is they're very illiquid - which means when you want to sell, you might not be able to (they only keep a fraction of the portfolio in cash, so if the market takes a tumble, you might be stuck in your property fund as capital pours out of it ... Very painful ... And who knows what you'll get back?)

UK property investment trusts are generally your best bet, but with everyone wanting to buy property funds at the moment, you might have to wait a while for a decent discount ... BTL is certainly terrible in London (despite what people believe) - sub-2% yields around Kensington; big risk of capital loss; lots of hassle; potentially big fees to estate agents ... Commercial property's generally a better investment (if you've got the cash)

JohnRo

masonic wrote: »

At the moment I am. Property prices in my area are pretty static and were falling around the time I moved here. Rent here is also comparatively cheap, so I've done quite well by investing the capital in S&S instead. Buying a property is part of my retirement plan if I don't do so beforehand.

There's also a heck of a lot to be said for ongoing maintenance costs of renting versus owning as well as the obvious mortgage versus rent comparison.

Jonbvn

OP,

If you are set on investing in property you could consider ground rents. They offer interesting diversification.

http://www.thisismoney.co.uk/money/investing/article-2380735/Freehold-income-authorised-fund.html

remorseless

Ryan_Futuristics wrote: »

BTL is certainly terrible in London (despite what people believe) - sub-2% yields around Kensington; big risk of capital loss; lots of hassle; potentially big fees to estate agents ...

I agree - I have worked the calculator many times and I don't get why BTL in London is an appeal.
The yield is definitely poor usually. I guess property prices have dramatically increased in the past but whether it's sustainable who knows.
I am lost at leasehold renewal fees!!!!

remorseless

JohnRo wrote: »

There's also a heck of a lot to be said for ongoing maintenance costs of renting versus owning as well as the obvious mortgage versus rent comparison.

I consider paying rent in a city like London like staying in a hotel with the privilege to work on a higher salary!
The higher salary must be able to pay for the rent and a mortgage back home + some savings or it's not worth it!

MadMat

I'd like to be invested in a property, but a local property suitable for my family would require a mortgage far in excess of the 3xincome guideline

So I'm renting and investing in the hope that at some point between now and retirement things might change!

Mat

enthusiasticsaver

I own 50% of our home with my husband ( although it is bought as going to survivor rather than tenants in common) and it is mortgage free. I also hold a 33.3% share of a holiday flat (tenants in common) with my siblings which was bought after my dad died about 10 years ago. It was bought as an investment and as a place for the family to use for holidays as interest rates were low and my mum received a lump sum after dad died which she wasn't sure what to do with so she bought it in mine, my sister and brother's names. I look after it as it is near my home.


We have had a lot of years pleasure from it and now my daughters and son in law and my niece and nephew use it as well as it has a lovely view and they can go there with their friends for weekends, weeks during the summer etc. It will probably be sold at some point to supplement the pensions for me and my sister and brother or to help children, grandchildren in the family with house deposits etc.


I personally love the choice that having your own property gives you. We can improve our house without needing to get anyones permission and can't be chucked out whenever the landlord wants to sell so would not consider going back to rented but that is just my personal choice.


If you took my property holdings as a percentage of total assets it is definitely more than 50% which is quite heavy probably so would not go for any more and tend to avoid investing in property funds.

kidmugsy

The tax deal on owner-occupied property is irresistibly good: no CGT and no income tax on the imputed rent. It's hard to see a government changing either of those in the near future. (Except for "mansions" maybe?)

But I could see the next government reintroducing some sort of Rent Act to foul up the rental markets, both for owners and prospective tenants.

lalman

I have 2 flats (40% and 25% equity) - both let out and got tenants all signed up till September 2016. I pick my properties carefully... So there is capital appreciation and decent yields but not amazing at 6-7%. I decided to avoid dodgy areas and instead go for near town centre, high demand property.

I would love a third, fourth and fifth eventually and haven't had any problem with tenants.

I have always wanted to build a property porfolio, and maybe that's why I don't see it as hard work or anything like that... What's right for me, might not be right for others...