Buy property or invest in Index Funds?

Cintrapark

I live abroad and have come into a bit of money. The options are to either buy a small BTL property in Sussex with a tiny mortgage (20k) or so, or invest all the money in ETF/Index funds. I'm tempted to do the latter as it's less hassle.

Any thoughts? I do not need the money in the short term and have no plans on returning to the UK.

bigfreddiel

How are you going to look after your buy to let property?

This will all cost you money, quite a large percentage I would think

On the other hand a nice low cost portfolio of trackers will not cost you much, less than half a percent. Keep it simple with say four tracker etf's, which could include property as an element.

Job done, no worries, no large bills, no tenants abusing your property, or refusing to leave.

Happy days fj

Cintrapark

That's exactly what I was thinking. I've done my research and think I'll diversify them as follows:

VWRD (VANGUARD FUNDS PLC FTSE ALL-WORLD UCITS ETF) - 55%
REET (ISHARES TRUST GLOBAL REIT ETF): 10%
SAAA (ISHARES VI PLC GLOBAL AAA-AA GOV BND UCITS): 35%

grey_gym_sock

Cintrapark wrote: »

That's exactly what I was thinking. I've done my research and think I'll diversify them as follows:

VWRD (VANGUARD FUNDS PLC FTSE ALL-WORLD UCITS ETF) - 55%
REET (ISHARES TRUST GLOBAL REIT ETF): 10%
SAAA (ISHARES VI PLC GLOBAL AAA-AA GOV BND UCITS): 35%

i think the basic split you have there - i.e. between global equities, global property, and government bonds - is sound.

on the bonds, SAAA has bonds issued in various currencies, with no currency hedging. do you feel you don't really have a home currency, i.e. you don't know where you'll be based? because when ppl do have a home currency, it's usually thought best to hold bonds in that currency, or hedged to it.

REET seems to be a US ETF, so i'm not sure how easily (or with what currency conversion costs) (or with what tax consequences: is it a reporting fund?) you can buy it via a UK platform.

on second thoughts: the tax consequences depend on what country you're living in now. so i have no idea whether you should be buying US ETFs, irish ETFs, or something else. but it may well matter.