Property - still the investment it used to be?

agrinnall

Rachel_MBA_Student wrote: »

I think since you already have experience in this area it would be a good investment.

What experience are you talking about? The OP has never invested in property before, and running a pub is an entirely different venture. I'll give you the benefit of the doubt for now and just say you are mistaken, but I won't be surprised if we need to be clicking the spam button on your posts before too long.

AnotherJoe

This article says "no" to your question.

http://www.telegraph.co.uk/news/2016/11/16/buy-to-let-crackdown-will-end-the-dreams-of-middle-class-investo/

Though on the other hand if you can make 25% profit at 5.5% interest rates then you'd be coining it now. I guess the difference is many were happy to make a modest rental profit and make money on house price rises in years to come , now you have to be able to make a decent profit on rental first.

Davesnave

There are no simple answers here because so much depends on variables that cannot be assessed from a distance.

Being in your 50s is not a barrier to this, as I can attest, being in my late 60s and still renovating, but I have the time and interest because it's my retirement home, not a profit-making venture.

Any investment might match or beat property in the future, and it's the future that matters, not the present. However, to improve the chances of success, it's vital to do research in your chosen field.

People tend to choose bricks & mortar over equities or material investments, like art or antiques, because they think they understand property, but there is still scope to come a cropper. Even an apparently straightforward renovation requires a plethora of informed choices to be made. Houses are not a very liquid asset either.

As for benefiting your family, that's fine, so long as you can ensure fairness, but your sons probably won't live there together, so I can see a potential pitfall there too. Property and family can be uneasy bed-fellows.

After doing most of my renovation, I can say that I'd make a much better job of the next one! Theory only takes you so far, and there's no substitute for experience. If you have the time, go for it, but only if you like getting your hands dirty. At least if you run a pub you should have access to plenty of trades!

AdrianC

Costy wrote: »

We have paid off our mortgage about 5 years ago, we have a reasonable business (village pub), and are managing to save around £800 a month. A house near us has come up for sale at a good price, it needs some refurbishment and lots of decorating, but it's in a great place in a very popular village. We have savings of around £25k, would it be a good idea to buy this property? We have two sons who it may be good for, or we could refurb it and rent it, or we could just sell it on. Are we mad to go into property in our 50s, or is this a good use of our savings?

How much is this property? Buy to let mortgages typically have a maximum loan-to-value of about 75%, so you'd need to find 25% deposit plus all the buying costs. If this property's more than about £90k, you can't afford to buy it as a BtL.

Do your sons even want to live in it?
Will they be doing the work? Or will you somehow be fitting it in to the spare time you have from running your pub...?
Would it make sense to buy as an extension to your pub business - letting rooms/B&B/holiday let? Would it free your current accommodation up to be letting rooms?
One thing's for sure - if there was money to be made from buying/refurbing/reselling, you wouldn't have had a sniff of it - it'd be in the hands of a builder/developer right now.

Crashy_Time

AnotherJoe wrote: »

This article says "no" to your question.

http://www.telegraph.co.uk/news/2016/11/16/buy-to-let-crackdown-will-end-the-dreams-of-middle-class-investo/

Though on the other hand if you can make 25% profit at 5.5% interest rates then you'd be coining it now. I guess the difference is many were happy to make a modest rental profit and make money on house price rises in years to come , now you have to be able to make a decent profit on rental first.

Public support for rent controls getting aired on the BBC today. Very interesting times.

AnotherJoe

Crashy_Time wrote: »

Public support for rent controls getting aired on the BBC today. Very interesting times.

"be careful what you wish for" (the public support, not you Crashy, though you may support it?)

Last time this happened the bottom fell out of the rental market and that at least was at a time when there was a lot of public housing. Now there's very little.

Rent controls wouldn't be a bad thing for people who want to buy, but for those who want, prefer or need, to rent, they'd be in trouble.

Costy

It's £180k, and we can afford it. I rang for a viewing today and it's been sale agreed, I am on a wait list. I knew it was a bargain.

Crashy_Time

AnotherJoe wrote: »

"be careful what you wish for" (the public support, not you Crashy, though you may support it?)

Last time this happened the bottom fell out of the rental market and that at least was at a time when there was a lot of public housing. Now there's very little.

Rent controls wouldn't be a bad thing for people who want to buy, but for those who want, prefer or need, to rent, they'd be in trouble.

You could say "careful what you wish for" about Brexit, Tory majority, Trump, EZ countries lurching out of the control of the Great Project and it`s elites, all happening or happened, but IMO the world will continue. My personal preference would be stop HB and let landlords charge what they like or can get in a market free from government interference. The over-leveraged landlords are toast now anyway, and Trump is going to get rates moving up which will just speed their demise, but I don`t see a massive shortage of places to live becoming a problem. After all that has happened recently rent controls are just a grain of sugar on the icing on the cake for me.

Cakeguts

Costy wrote: »

It's £180k, and we can afford it. I rang for a viewing today and it's been sale agreed, I am on a wait list. I knew it was a bargain.

Or it could be a lucky escape?

Crashy_Time

http://www.telegraph.co.uk/investing/buy-to-let/analysis-how-the-government-destroyed-buy-to-let-in-16-months/