Buy to let. Good idea at the moment?

Zanderman

DennisTenus wrote: »

Is it really that simple and likely to get that much income per 20K???! :eek:

I think that's 15 x 20K....

DennisTenus

Zanderman wrote: »

I think that's 15 x 20K....

300K to get 1K income a month?

Zanderman

DennisTenus wrote: »

300K to get 1K income a month?

It's a 4% return per annum. Not unreasonable. Not excessive. Not too shabby either.

chrisgg

4% income along with some long term growth of capital is certainly achievable from a typically 'medium risk' investment portfolio.

A portfolio of this sort has advantages in that it offers liquidity, the ability to realise part of the capital if needed, is tax efficient, and the income isn't subject to void periods. Also doesn't involve any void periods or idiotic tenants causing damage.

A simple three fund portfolio I suggested the other day on a different thread is below.

Axa Framlington Monthly Income - 30% - 4.3% yield
Artemis Global Income - 30% - 3.6% yield
Liontrust Monthly Income Bond - 40% - 5.7% yield

Though for the sum you're investing it may be worth seeking professional advice or doing some serious reading around the expectations one should have from the stockmarket, should you decide you'd rather invest in stocks and shares.

gallygirl

Rather than ask what you should do with your money, ask what your money should do for you.

What are your aims? Do you enjoy your job? How much do you need/want to retire on? Have you thought about retiring early? Assuming you withdraw 12k a year (+ inflation and growth at 2%) you wouldn't run out of money till 2042 and you were 73. That is a back of fag packet calc, and doesn't take into account higher/lower returns, private pension/state pension, , higher needs due to ill health, partner etc. Basically, you could possibly make that 300k last you the rest of your life if you planned it right, without working past 50.

ffacoffipawb

PWFZ12 wrote: »

ffacoffipawb yes I've had a pension fund since my early 20s (I'm now 48).

Could you suggest a starting point for your tempting suggestion?

Thanks

May as well wait a few months for markets to settle down and for American investors to grow a pair.

DennisTenus

Isn't now good time as markets lower?

enthusiasticsaver

I would have said buy to let was more risky than stocks and shares.

With stocks and shares you spread your risk across geographies, asset sectors and types of assets including properties. If there is a worldwide crash in one particular area loss is minimised by your investment being spread across various investments/funds. Investments are also more liquid than property although of course you need to accept that if the market falls selling out means losses are solidified. If the market is stable or rising though you can get your money in days rather than months as you would have to wait with property.

Buy to let you are running the risk that property prices do not fall massively meaning if you run into difficulties you have to sell at a loss. You run the risk you will not get good tenants who pay on time or at all and will not wreck your property. There are no longer tax benefits on it meaning any rent you receive you will have to pay tax on. Purchasing a second property these days means higher stamp duty and capital gains if you sell it. With investments you can make them more tax efficient by putting them in an ISA wrapper.

enthusiasticsaver

DennisTenus wrote: »

Is it really that simple and likely to get that much income per 20K???! :eek:

A general idea on income funds is 4% so on £300k that is £12k per year.

EdGasketTheSecond

Buy to let is an occupation as well as an investment. Don't think the estate agent will sort it out when things go wrong; they won't.