Is investing in property still the best long term option?

Retireby40

Hey folks. I'm 27 and I have started to think seriously about my future.

I was fortunate/unfortunate to inherit a house last year which I currently rent out. I get £550 per calender month. I live in another property which I don't have to pay rent in.

My current salary is around £24000 and I'm based in Northern Ireland so the cost of living isn't too bad.

I can save around £300-400 a month and I'm thinking that in the next year or two I may be best buying another property on buy to let and rent it out.

To some this may sound like I think it's easy. I know it isn't as I currently have some experience with my other property.

However I really don't want to waste time. I am in a fortunate position. But I don't want to waste money and time when in 15-20 years I could be sitting with 2 properties, mortgage free bringing me in a passive income. While I know it easy just easy money but I don't see a better option.

Isas don't yield enough. Stocks and shares is a gamble. I am not very experienced in this but if anyone else has been in a similar situation and how it developed that would be great.

Or am I thinking wrong. Is it too much hassle than it's worth? Is there somewhere else my money could go that would be a better option?

Thanks for reading.

Retireby40

My savings of 300-400 is just from my salary. When I take out insurance/rates/repairs etc from the rental money I would say about 300 a month is profit. So really i have about £600-700 a month that could go into something.

leejay25

Yes property is always a safe option but not a get rich quick one

Kernel_Sanders

Retireby40 wrote: »

My savings of 300-400 is just from my salary. When I take out insurance/rates/repairs etc from the rental money I would say about 300 a month is profit. So really i have about £600-700 a month that could go into something.

Welcome to the Board. If you want to add to your post just use the Edit facility.
You don't seem to have allowed for income tax from that £300, which might be more if repairs are not allowable against profits.

kidmugsy

leejay25 wrote: »

Yes property is always a safe option

Title of thread: "Is investing in property still the best long term option?"

And yet: 'House prices in Belfast have dropped by £44,000 in 10 years' declared the Belfast Telegraph on 15/10/18.

Linton

There is no one single best investment. Anything that can give you a return greater than cash can also in some circumstances lose you money. Even cash will probably lose out to inflation in the long term. The best option therefore is to invest in a range of different investments so that you will not lose everything should one turn bad.

Probably the best investment to hold along side your property is stocks and shares. But not individual shares in one country as this could be very risky. Instead you should be investing in funds that hold shares in possibly hundreds of companies spread across the world. Two major advantages over property is that such investments can be held tax free and they only require minimal effort to manage. A further advantage is that they can be bought and sold in small quantities. So if you wish you can cash in a minor part of your nvestment in a few days , something that is impossible with a property.

cp2000

I am seeking similar advise. My living situation means i dont have a mortgage or need one but have continued to save. Am i best off getting a mortgage and buying to let, as the simple way i see it is someone else will be paying that mortgage for me then in 20 plus years time i have a potential regular income from rent and the house is paid off. Is it that simple?? What do i need to be aware of?

_CC_

"Still the best long term option" - when was it ever the best long term option?

Have you looked into other asset classes and tax implications to compare?

Apodemus

If you already have a significant proportion of your wealth (and income) in one asset class, then it surely makes sense to diversify and put your next eggs in a different basket? I would be looking at building a cash fund (to cover any big expenses or voids in the rental) and while that is building, take the time to read and learn about financial investments.

atush

Property has NEVER been the best place to put your money.

Over any time period of 10 years or more, incl the recent credit crunch, equities have out performed property. Put those equities into a tax wrapper such as an Isa or pension, then you pay no income tax or cut on the income received or the gains.

When property is the best place is when you put money into the property you reside in.

In your case specifically, you are already invested in property, so you should diversify into other assets with your spare 400 per month

fred246

I bought a nice house to bring my family up in. I found it strange that my work colleagues saw it as a financial investment. I have certainly enjoyed living there and I feel that a nice house transforms your life. It is far too big for a retired couple and I am happy that at some point I could downsize to liberate retirement money. That sale would be free from capital gains tax of course. When I had paid off the mortgage and I had some cash I suggested to my housewife wife that we could buy property and she could look after it. You should have seen her face. She was too busy lunching with friends to look after property. So I started investing as something I could do in the evening after work. I just think it's so stress free. Once you realize that prices fall as well as rise you can just sit back and tinker occasionally. I don't worry about any crisis or bad tenants etc. The returns are as good if not better than property. You need to read a book on investing though.