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Advice on IFA stuff

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Comments

  • dunstonh
    dunstonh Posts: 120,188 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    How do I sort the wheat from the chaff at this stage? 

    Phone some of the nearest.

    Or should I just go through and speak to all of them?

    That would be overkill. Would you normally phone 10 tradesmen when you want a job done?



    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Malthusian
    Malthusian Posts: 11,055 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
    If I really am estimating 2.5% is investing in stocks and shares actually better than buy to let, aside from - and I get that this is a big aside - the matter of diversity in which case it obviously wins every time. What would be the income + growth profit on a BtL in London worth about that much?


    Stocks & shares also wins on tax given the lower CGT rates, ability to use your CGT allowance each year, lack of stamp duty, and generally not being seen as parasites on the backs of the proletariat and ripe for taxation.

    Buy to let should return more than stocks and shares for the same reason my day job returns more than sitting on my tuckus watching my stocks and shares (for the moment). It's a job. If you are going to spend a lot of time researching individual properties, finding tenants, dealing with phone calls in the middle of the night about the toilet being blocked, etc etc, then it certainly should return more than sticking your money in VLS and having a beer. Otherwise you're wasting your time.

    (If you hand everything to agents in an attempt to make it as passive as possible, all the way down to phone calls about the boiler breaking down, the fees are such that you should certainly not expect a higher return than stocks and shares.)

    It is also high risk as you say, so anyone who is not getting higher returns from buy to let than the stockmarket is doing it wrong. However, a lot of people will do it wrong due to void periods, bad tenants, buying in the wrong place, etc - that's the risk.

    The value of buy to let properties is bid up by people who struggle with valuing abstract concepts (i.e. they "don't trust the stockmarket" and "like bricks and mortar", instead of lots of bricks and mortar spread across the globe along with lots of other stuff). People who do value diversified stockmarket investments should probably steer clear as they are the wrong target market.
    The main advantage of buy to let is the ability to obtain and use leverage without risking your shirt to the same extent as borrowing to invest in shares. However you didn't mention an inclination to do that.
  • sixpence.
    sixpence. Posts: 295 Forumite
    Sixth Anniversary 100 Posts Name Dropper Combo Breaker
    Do you think it's worth getting the opinion of x2 IFAs on whatever proposal I decide to go with before I invest? the equivalent of getting a second, and third, opinion. 
    I am, since reading this thread and realising that what some IFAs suggested is an ambitious profit goal, concerned about being naively taken advantage of.
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