Buy to Let. Worth it?

mcooke999

What do people think about investing in Buy to Let properties these days?


I'm considering doing it as a limited company & would look to buy a circa. £100k - £120k terraced house locally on a 'good street' with a circa. 25% deposit, I intend on keeping all profits within the business to invest in another similar property when accumulated enough for another deposit.


Alternatively, I could invest my money into VLS100 and forget about it so that's my other option...


I'm interested to know what everyone thinks?

kidmugsy

I'd consider the way the wind's blowing, and how much a property is a hostage to fortune.

https://www.theguardian.com/politics/2019/jan/23/sadiq-khan-makes-rent-control-key-plank-of-mayor-re-election-bid

lisyloo

I'm interested to know what everyone thinks?

To my mind it doesn't stack up at todays prices with the worse tax regime, increased stamp duty and increased legislation for landlords.


I think the only circumstances it stacks up is if you love the work so don't mind valiing your time as zero or you are a very handy DIYer who can add value by renovating/decorating and like doing it and are prepared to value you time at zero.


I'm probably biased as I don't enjoy any of the work and I can't see how it stack up if you value the time involved.
I have someone else manage my equities and they get 0.5% for that.
I'm happy with that because I believe they can do at least 0.5% better than me with lower risk and I have to do nothing.


If you factor in your time or professionally delegate the landlord work then it doesn't stack up.


I am talking about buying at todays prices not properties bought decades ago which of course may stack up at previous prices.

takesyourchances

I have thought about it several times over the years, but it seems the tax changes as pointed out is against it and stamp duty all make it harder to make it work to a decent yield.



I don't think it would be easy and keeping the overheads covered and unexpected costs buying into BTL today.



Easier exposure to property than BTL could be with investment trusts spread across a portfolio and some have a reasonable yield. When I think at times of going into BTL, I often think to myself would it yield much better than some of the Property IT's and what hassles would I get being a landlord for the return compared to stocks and property IT's etc that can be held tax free in ISA's.



I will read other replies with interest too as the idea floats with me sometimes and then when I think of the tax factors and hassles compare to other ways I revert from the idea.

Alice_Holt

I think it's a good way to add additional work, hassle, and stress into your life. Plus the real possibility of generating a capital loss on disposal.

The VLS for me everyday, preferably in a pension wrapper.

Wildsound

It's only worth it, in my opinion, if the time you have to invest in the property brings enjoyment and value (i.e. renovation). Otherwise, you're not going to get an easy ride to any sort of profit and/or stress free yield. To then realise any sort of capital gain then brings an all or nothing problem (i.e. an illiquid asset).

A multi-asset fund aligned to your risk and tolerance for loss is the easiest way to get what you need in the long term, leaving you the time and energy to enjoy what matters to you (assuming that it's not complex ongoing management of a property)

Thrugelmir

mcooke999 wrote: »

What do people think about investing in Buy to Let properties these days?

As with any business venture. Crunch the numbers fully. Apply "what if scenarios". Consider your exit route as well.

mcooke999

I think you've all answered it to be honest so thank you... If it's difficult to make a profit in today's low interest rate environment then god help anyone trying when rates start to creep up.


Plus, as people have said there isn't much of a premium on equities or a real estate IT to justify the time/effort and this premium would probably vanish when interest rates rise anyway i'm guessing!

Alexland

mcooke999 wrote: »

I think you've all answered it to be honest so thank you... If it's difficult to make a profit in today's low interest rate environment then god help anyone trying when rates start to creep up.

These days one of the most effective ways to do well is to be tax efficient!

Alex