Buy to let is for amateurs

bigfreddiel

Balanced portfolio of bonds, equities, property beats BTL hands down year upon year.

Put an ISA wrapper around it and it's all tax free!

Reinvest divis and your return year upon year will beat 7% no problem. And it's all so easy and trouble free!

fj

System

I wouldn't touch CFDs or anything where I might get a margin call, I like to speculate from the safety of my house

And yea, property associated risks best managed via funds I think

But I don't bother with bonds, not when I have my own debt to repay

Question is whether the diversity you get through equities is enough to feel like you need property in it too

masonic

MatthewAinsworth wrote: »

Question is whether the diversity you get through equities is enough to feel like you need property in it too

A bricks and mortar property fund will provide you with something that is uncorrelated with equities and has tended to generate returns that do not fall too far behind equities. So property exposure can be useful in reducing volatility. If you don't care about minimising volatility, then a diversified equities portfolio would not look unbalanced without it.

Pincher

masonic wrote: »

Spread betting and CFD trading enable the average punter to do this. The 95% LTV is equivalent to a 5% margin factor. Obtaining the leverage isn't the problem. The problem is avoiding losing the shirt off one's back while using the leverage.

They close your open positions down pronto, as soon as it gets near your cash balance. It's leveraged only as far as your cash position covers your open positions. In the end, you are the one putting up the collateral. Nobody has lent you £100k.

masonic

Pincher wrote: »

They close your open positions down pronto, as soon as it gets near your cash balance. It's leveraged only as far as your cash position covers your open positions. In the end, you are the one putting up the collateral. Nobody has lent you £100k.

Yes, the position normally gets closed before you can become insolvent, which I'll grant you is not the case with borrow-to-let.

System

Probably only because you can't recover money once someone's completely bust, it wouldn't make a tremendous difference for the individual

mike88

I wonder if those who advocate stock markets as the best form of investment have lived through many crashes. I have invested in the stockmarket for 40+ years and also dabbled in buy to let. In hindsight I wish I had concentrated more on property as you not only get increases in price but a regular income as well with minimum risk. Voids can be avoided if you buy in areas of high demand such as around educational establishments and hospitals and I found if the place you rent out is well kept it is respected by tenants. Managing property is no hassle if you can find a decent agent and the charges are offset against tax. Now I have many equities but if I were to live my life again my emphasis would be on property with equities occupying a lower proportion of my assets.

veryintrigued

Why would those heavily invested in stockmarkets suggest anything but?

The more people hankering after stocks the greater their perceived value.

System

You have to have a crash strategy, and mine is to wait it out, because it always cones back, crashes don't worry me

You can have income from shares if you want, but accumulation suits this point in my life

Perceived value won't really decrease yield as all these things are heavily watched by active managers and automatically factored in by the indexes, as the good rise and the poor fall

Pincher

veryintrigued wrote: »

Why would those heavily invested in stockmarkets suggest anything but?

The more people hankering after stocks the greater their perceived value.

Buy more HSBC shares, please, Let's push it up to £8 a share.

I will set my sell limit at £8.01.

Nobody sells at £7.99 and trigger a run, now.