Buy to let market. For who or what circumstances is it good.

eskbanker

Retireby40 wrote: »

its having one eye on the future

[...]

Being self employed I dont have a work place pension so that might be another avenue to look into in regards to some sort of private pension

:eek:

I'd suggest that starting and building a pension should be a priority then if you're starting to think about the future - it won't be accessible at 40 if your username is to be taken literally but there's a reason why pensions are used and recommended as tax-efficient vehicles to accumulate long-term wealth....

shinytop

Others have commented on the financial aspects. The biggest downside for me and the main reason I got out of BTL (I only had one) is the added stress and responsibility. As a landlord, you are responsible for someone else's home, maybe that of a family, children, etc. That was a worry to me. If/when something goes wrong you have to fix it. I found that hard; for example I could cope with my own family having no washing machine better than when it happened to my tenants. That's just me though and others will feel differently. I also had some bad tenants but that's a different issue.

Retireby40

My username isn't literal. It should really read 35 by then I should have won the lotto.

Thing is to retire earlier you need some sort of income. If you dont get the main monthly pension payments until 65 or more by the time I retire then while it is important there has to be another way of making a few quid semi passively between say 50-65.

Brilley

...would be interesting to see what would happen if they do scrap section 21? I can fully understand the need to give tenants a longer period. However if there was no way of getting a tenant to leave then if this was announced (and I am sure there would be a notice period?), then would most (smaller) landlords decide to issue a Section 21 and then sell?

gingerscot

You can take money from a pension pot from age 55 so that covers a further 10 years.

Most careers these days involve more than one company so often you'll have more than one pension pot anyway, and use this to your advantage by taking one earlier to cover any income gaps between 55 and 65.

You can also open up a very tax efficient SIPP (personal pension) easily in 10 minutes.

There are plenty of income based funds that will generate a income steam for you by investing in share/funds/bonds that offer dividends or interest payments. If these are help in an S&S ISA then they can be used at any time.

Personally with current rental yields, the hassle & stress BTL entails and uncertain future property market, other forms of investment seem much more attractive.

Cheers,

OldMusicGuy

Retireby40 wrote: »

Thing is to retire earlier you need some sort of income. If you dont get the main monthly pension payments until 65 or more by the time I retire then while it is important there has to be another way of making a few quid semi passively between say 50-65.

I would suggest reading up some more on pensions. Like gingerscot says, you can draw funds from SIPPs in a variety of ways once you reach 55 (although this is going up, in future it will likely be 10 years prior to state pension age). If you want to retire in your mid to late 50s or early 60s, investing in DC pensions is a very tax efficient and low stress way of doing things to bridge the gap to SP age (and of course they help beyond that). It isn't risk free, but if you understand the level of risk you want to take on, IMO it will be less stress and hassle than BTL.

I retired early at 60. Like many people in the UK, I planned to invest in property (either a rental or holiday let) because most people in the UK think "you can't go wrong with property" and also "you can't trust the stock market". Which is what I thought before I knew much about investing in pensions. The more I looked into it I realised that being a landlord was not what I wanted to do in retirement. Too much hassle, limited opportunity for capital growth (compared to the past 50 years) and increasingly negative tax environment. I decided to invest more in my pension.

This is a helpful book to read if you don;t know much about pensions and investing: "DIY Pensions: A Simple Guide to Pensions, SIPPs & Retirement Planning" by John Edwards.

I wouldn't totally rule out BTL but do make sure you really understand what the alternatives are (like pension investments). If you have completely maxed out on your possibility to contribute to pensions, then BTL may be an option to spread your portfolio.

Retireby40

That's for the great input folks. Being (young/ignorant) I haven't thought to much about pensions. Mainly because I'm 25 years from it and the thought of if I could do something now and there be some return in say 10-15 years ( I.e sell the property and have the cash, or have the mortgage covered and have an income stream that is basically profit bar rates/repairs) that would be accessible if needed.

Definately have a lot to think about because pensions are low down on my priority. And probably should be quite high up.