UK BTL property vs stock market fund?

AnotherJoe

With respect thats a somewhat confusing way of putting it without adding an explanation !
If pre tax profits are higher but actual net post tax profits are then lower, thats what most people would want to know. No point telling someone "hey your profits will be £100 a month more" if the net, after tax result in their bank account means they are £120 month worse off.

Peter_Williams

One point I would add is political risk.
BTL landlords in the UK have proved an easy target for politicians in the recent past.
I see no reason this couldn't continue or even get worse.

Stock markets are global and have survived for a over 100 years now. The plc as a concept seems more resilient to political changes, compared to the AST and BTL mortgages, which have only really become accessible to the general public in the last 30 years or so.

Peter_Williams

Malthusian wrote: »

On this forum most people don't. On a forum for landlords it would probably be different.

Where people do prefer option 1, it is in most cases because people struggle with the abstract concept of stockmarket investment and like the tangibility of property. They like knowing that they own a building somewhere, as opposed to a zillionth of millions of buildings all over the world which is what shares give you.

You can't. All these percentages are guesses.

This is certainly my experience of family members who are into BTL. They can see the utility value of property. ie even if no tenant wants to rent it, the owner can still choose to live in it, store tools in it or even knock it down and use the bricks for something else.

I think in that respect property is similar to farmland or forestry, in that it has a physical utility that people can actually touch. Whereas shares are just numbers on a screen that rely on a bank and a third party and a secure IT system to actually convert those to cash to spend.
A tenant can just hand over cash (or salt, chickens or silver spoons) to a landlord direct - so there's no third party required (apart from a legal system to evict if required).

From a purely investment return perspective, it makes little sense as that physical utility brings with it costs and inefficiencies.