Property ISA's

Pugsley_03

Ok so I don't think I've ever started a thread myself. Apologies if this question has been asked somewhere else before.

I'm 31 and a business owner and have been thinking about ways to get out of working for a few years. No grand plans to retire in the next year or two but obviously I don't gain anything from auto-enrolment pensions being a business owner.

My long term ambition is rental properties as I live in an area with fairly low house prices but decent returns for rentals. But before that I need to get the ball rolling on building a deposit for a rental.

So after the rambling, just painting the picture, I wondered if anyone had any experience with property ISA's? Namely Bricklane.com but if there are others out there please let me know.

Also please don't get confused with buy to let ISA's, I know I'm not eligible for one of those already being a property owner, so I'm purely talking about property ISA's.

Thanks in advance!

trevman

they are usually referred to as IF ISA and theres sites with lists of them

bowlhead99

Pugsley_03 wrote: »

I'm 31 and a business owner and have been thinking about ways to get out of working for a few years. No grand plans to retire in the next year or two but obviously I don't gain anything from auto-enrolment pensions being a business owner.

Can the business not fund some big pension contributions for you? If incorporated it'll reduce the corporation tax bill as well as saving employers NI on one of the ways you extract cash from it.

So after the rambling, just painting the picture, I wondered if anyone had any experience with property ISA's? Namely Bricklane.com but if there are others out there please let me know.

No experience investing in one myself as they seem relatively expensive for what they do as well as being potentially illiquid etc - which would be a problem if you wanted to extract the value in a hurry to use the money to take advantage of a depressed property market.

You'll find references to them if you use the forum Search tool.

Also please don't get confused with buy to let ISA's, I know I'm not eligible for one of those already being a property owner, so I'm purely talking about property ISA's.

Just to clarify, the thing you don't want us to get confused about is "help to buy" ISAs (which specifically can't be used for buy to let)

steampowered

Personally I do not see the attraction of investing in a Property ISA over a standard stocks and shares ISA.

The investment is less liquid, much higher risk (since all of your investment is in one company) and the returns aren't that great.

Property ISAs don't fund your personal BTL investments. You are essentially buying shares in a property company.

I would stick with a stocks & shares ISA, investing in a balanced investment fund or low cost tracker.

Pugsley_03

Thanks for the replies.

Steampowered, I know the property ISA won't find a BTL, I just stumbled upon it when looking at the latest properties on the market in my area. Was purely looking at it as a way to invest some funds over the next few years.

But I take both your and bowlheads point that it's potentially less liquid and higher risk than a standard stocks and shares ISA, which is the route I was considering in the first place if I'm honest.

Would still appreciate any feedback if anyone has used this in the past, but I think I'm settled on what route to take now.

Thanks.

dunstonh

Personally I do not see the attraction of investing in a Property ISA over a standard stocks and shares ISA.

Me neither. Especially when you consider that existing property funds with longer track records and published data are available. Vs these new funds with only a handful of properties and no indication of how they will handle a liquidity issue.

Plus, property typically ends up being around 10% in most sector allocations. Going 100% into a sector is rarely a good idea.

firestone

Pugsley_03 wrote: »

Thanks for the replies.

Steampowered, I know the property ISA won't find a BTL, I just stumbled upon it when looking at the latest properties on the market in my area. Was purely looking at it as a way to invest some funds over the next few years.

But I take both your and bowlheads point that it's potentially less liquid and higher risk than a standard stocks and shares ISA, which is the route I was considering in the first place if I'm honest.

Would still appreciate any feedback if anyone has used this in the past, but I think I'm settled on what route to take now.

Thanks.

Bricklane is a REIT so you would be using your stocks & shares part of your ISA for that year within that one platform.But you can also have an IFISA (Innovative) as part of the £20000 which is mainly P2P type property such as Landbay or Octopus choice at the lower end of risk for mortgage type savings products or if you google you will see things such as Property partner or Property Moose etc which are a form of BTL for investors and i believe have an ISA.Up to high risk property development products(which i would not recommend myself but may interest you)

umar1

FYI there is another property fund called TM Home Investor, which looks (to me) similar to the BrickLane one.

One advantage is that you can buy TM Home Investor as part of a stocks and shares ISA. So you can allocate whatever % you want to property, e.g. 25% or whatever.

For what it's worth, I'm putting some of my pension into Brick Lane as I like the look of it. (But that's a different strategy to you so not relevant as you need the income now as you stated.)

dunstonh

One advantage is that you can buy TM Home Investor as part of a stocks and shares ISA. So you can allocate whatever % you want to property, e.g. 25% or whatever.

25% in an illiquid fund would be high. Typically you see property allocations are around 5% for bricks and mortar nowadays.

umar1

I did say "25% or whatever", i.e. it's up to you if you want to be more exposed to the property market or not. There isn't a generic right answer IMO.

Alexland

For a sorry tale of how Property Moose investors are being treated read the below link.

https://forums.moneysavingexpert.com/discussion/5922789/from-propertymoose-to-ukdiversified

My view is that the returns on mainstream liquid investments are sufficient that you shouldn't need to take such extreme risks with your money.

Alex