Is buying a second property better than a pension?

JezR

I have an uncle now in his early 80s that first got into buy-to-let in the 1970s. He consolidated his holdings a few years back into about half a dozen Victorian terrace houses plus a set of 6 modern flats in a development he had built about 20 years ago that he all now owns outright.

Although he personally did well out of this (this was actually a sideline to his main business which he disposed of on retirement) he always advises anyone considering starting it off now to think very carefully, especially if only able to start with one or two properties. He can stand the occasional bad tenant over his portfolio and can afford for everything to be managed by someone else so he has no day to day involvement any more. Even so, he is considering liquidating

ThinkingOutLoud_2

AndyAdams wrote: »

Thanks for the responses, interesting range of views. I thought the which link and the apparant stance of the BoE economist was enlightening.

My gut feel is property is more lucrative if I can take some hassle, but then maybe I won't get any hassle, I guess there is only one way to find out

I think if you are investing - you should rely on gut feel only when there are no facts or if the facts are balanced. If not, it is pure bet - how the bookies make the majority of their money.

But always successful punters at the race course are rare - but I bet they do their homework!

jamesd

AndyAdams wrote: »

I have £300k sitting in S&S ISAs, what are the thoughts on buying a house as an investment or keep it in ISAs or maybe overtime put it into a pension? I'm currently putting 20k per annum into a pension and in my early 50s.

Will it beat the 10% or so tax free yield after allowing for bad debt that is fairly readily available from peer to peer lending at the moment?

There's currently a bit of a limitation on supply within the ISA wrapper but that is gradually changing as more P2P places become authorised. Until then it's easy enough to transfer some of the money to a flexible cash ISA, withdraw it to invest in P2P then sell the P2P to put back into the ISA before the end of the tax year so it keeps the ISA status. No problem to do that on say £200-£250k of the money if needed. As more P2P offers the ISA you just switch make the replacement subscription into the ISA and do a transfer to the new P2P place.

That gets you something like twice the return on investment without borrowing and it's far more liquid than property.

You're in your early 50s so I assume that you're already paying your whole work income into pensions for the tax relief on that, or capped by the £40k annual allowance? Being so close to 55 it's easy money.

Given your amount of savings are you also eliminating most of the rest of your income tax bill by buying VCTs?