Alternatives to property and pension..

adonis10

Now that the buy to let game is going to be coming to an end, what is a good strategy for investing excess cash?

Currently own a 170-180k property fully, with the plan to buy another with my OH and rent out my one. Now, if we can buy before 31/3/16 then all ok but if not, I'm not prepared (and cannot afford) the extra hit in sdlt. I don't know enough about pensions but don't trust them given what has gone on in the past, and I'm not clued up enough on the stock markets to invest a large amount.

Any ideas?

jimjames

Maybe get clued up on investment? If you can learn about other options surely it's worth learning about that as well?

adonis10

jimjames wrote: »

Maybe get clued up on investment? If you can learn about other options surely it's worth learning about that as well?

Totally agree, and I will be. However, was just looking for some pointers on here as I know there are some very clued up posters on here. Have 4 months to purchase another place or look at alternative strategies, which isn't a long time. It's not a great time for properties on the market currently, also.

jimjames

If you can't afford the extra stamp duty then buying another property isn't the right option. The cost isn't very big compared to other costs over time.

If you have no investments then that's certainly an area to look at. You can read up more at https://www.monevator.com

adonis10

jimjames wrote: »

If you can't afford the extra stamp duty then buying another property isn't the right option. The cost isn't very big compared to other costs over time.

Yeah, that's what i said; if we can buy before 31 March, we will. If we can't, I need to find another option.

dunstonh

I don't know enough about pensions but don't trust them given what has gone on in the past, and I'm not clued up enough on the stock markets to invest a large amount.

Pensions are just a tax wrapper for investments. They dont make anything (either now or in the past). Pensions can hold the same investments as most other tax wrappers.

it seems strange to not trust a tax wrapper.

Are you clued up on property? For many landlords, the recent stamp duty change is not the big thing that is going to hit them. Its the reduction in the ability to offset mortgage interest against income that is going to hurt.

adonis10

dunstonh wrote: »

Pensions are just a tax wrapper for investments. They dont make anything (either now or in the past). Pensions can hold the same investments as most other tax wrappers.

it seems strange to not trust a tax wrapper.

Are you clued up on property? For many landlords, the recent stamp duty change is not the big thing that is going to hit them. Its the reduction in the ability to offset mortgage interest against income that is going to hurt.

Am only just starting to be in the situation where I need to think about pensions etc so am still learning. In my 20's, I didn't give it a second thought.

The rental property will be the 100% owned one so offsetting mortgage interest is irrelevant. The mortgaged property will be the one I buy jointly with my oh.

jimjames

dunstonh wrote: »

Pensions are just a tax wrapper for investments. They dont make anything (either now or in the past). Pensions can hold the same investments as most other tax wrappers.
it seems strange to not trust a tax wrapper.

To be fair, pensions have had a very poor reputation in the past. I remember the first one I took out and the adviser was getting most of the first 2 years contributions so it's understandable why people may be wary.
I know the situation is different now but perceptions remain unless you are clued up on the latest developments.

Pincher

Find a failed state somewhere, find a rebel group, fund their war efforts, take over the natural resources and sell them.
Cheapest way is to found a religion, so people fight for you for free.

jimjames

adonis10 wrote: »

Yeah, that's what i said; if we can buy before 31 March, we will. If we can't, I need to find another option.

What I mean is, if 3% of £170k is the make or break amount then buying a BTL now is not a good idea. If you don't have the money to cover that amount, what would you do if you have boiler needing replacement or tenants trash the place or you have long voids period? It's a much more hands on business venture than buying some shares (or more easily just buying into a tracker fund)

adonis10

jimjames wrote: »

What I mean is, if 3% of £170k is the make or break amount then buying a BTL now is not a good idea. If you don't have the money to cover that amount, what would you do if you have boiler needing replacement or tenants trash the place or you have long voids period? It's a much more hands on business venture than buying some shares (or more easily just buying into a tracker fund)

I do have the cash for it but see it as a waste of money when there are things such as you mentioned to consider. I'd rather have the extra 8k in the bank to cover such incidents. I'm aware of what is involved with renting out a place.

The 3% would be on about 275k (price of houses we are considering). I've never said that I am buying a 170k btl, I already own it and would rent it out once the house is bought.