We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
We're aware that dates on the Forum are not currently showing correctly. Please bear with us while we get this fixed, and see Site feedback for updates.

Saving for Buy to Let Investment - 3-5 years

2

Comments

  • csgohan4
    csgohan4 Posts: 10,600 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Photogenic
    edited 14 March 2021 pm31 12:24PM
    OP i hope you know what your getting yourself into in BTL.

    Please do a cost analysis and factor in no rent and eviction costs for one tenant. The costs are significant. I am sure you've read on the legal and tax implications and of course you are aware of the section 21 being under consultation with a view for abolition 

    I've done my own and feel S+S  in a tax wrapper is far less stressful and more cost effective for me

    I've made more money on my investments in less than 1 year easily beating the quoted ideal yields of btl of 5%. Their reaching 10% not including individual stocks. 

    Guess what, no CGT/SDLT to worry about and tenants looking to move or stuff to repair or unpaid rent. Time is money which I don't have alot to entertain tenants

    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
  • Alexland
    Alexland Posts: 10,183 Forumite
    10,000 Posts Seventh Anniversary Photogenic Name Dropper
    csgohan4 said:
    Guess what, no CGT/SDLT to worry about and tenants looking to move or stuff to repair or unpaid rent. Time is money which I don't have alot to entertain tenants
    And of course if you are using appropriate tax free wrappers no income tax to pay.

  • csgohan4
    csgohan4 Posts: 10,600 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Photogenic
    Alexland said:
    csgohan4 said:
    Guess what, no CGT/SDLT to worry about and tenants looking to move or stuff to repair or unpaid rent. Time is money which I don't have alot to entertain tenants
    And of course if you are using appropriate tax free wrappers no income tax to pay.

    Shame max is 20k, would be nice to put more in when you have some extra from time to time or want to react to the market at a given day when your money is already tied up in existing investments you do not want to sell
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
  • csgohan4 said:
    OP i hope you know what your getting yourself into in BTL.

    Please do a cost analysis and factor in no rent and eviction costs for one tenant. The costs are significant. I am sure you've read on the legal and tax implications and of course you are aware of the section 21 being under consultation with a view for abolition 

    I've done my own and feel S+S  in a tax wrapper is far less stressful and more cost effective for me

    I've made more money on my investments in less than 1 year easily beating the quoted ideal yields of btl of 5%. Their reaching 10% not including individual stocks. 

    Guess what, no CGT/SDLT to worry about and tenants looking to move or stuff to repair or unpaid rent. Time is money which I don't have alot to entertain tenants

    A very good point well made. Thank you
  • csgohan4
    csgohan4 Posts: 10,600 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Photogenic
    Marcusian said:
    csgohan4 said:
    OP i hope you know what your getting yourself into in BTL.

    Please do a cost analysis and factor in no rent and eviction costs for one tenant. The costs are significant. I am sure you've read on the legal and tax implications and of course you are aware of the section 21 being under consultation with a view for abolition 

    I've done my own and feel S+S  in a tax wrapper is far less stressful and more cost effective for me

    I've made more money on my investments in less than 1 year easily beating the quoted ideal yields of btl of 5%. Their reaching 10% not including individual stocks. 

    Guess what, no CGT/SDLT to worry about and tenants looking to move or stuff to repair or unpaid rent. Time is money which I don't have alot to entertain tenants

    A very good point well made. Thank you
    I would certainly prioritise pensions before ISA however. Much more tax efficient. something else to consider. yes you can't access until retirement, but the money you gain is substantially more in the long term


    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    For a BTL purchase save the cash.  Returns may not be great however you'll avoid the inherent risk that comes with investing. 
  • For a BTL purchase save the cash.  Returns may not be great however you'll avoid the inherent risk that comes with investing. 
    Ok so here is what i am trying to get my head around. A previous poster put this link up to essentially say, that at 5 years there is a 10% chance i would be down. Long-term investing: Increasing your chances of positive returns (nutmeg.com)

    Now, again I am just working through all this, this is a post from Nutmeg (he would say that), but still - is losing inflation for 5 years (guaranteed) more worthwhile than a 1 in 10 chance I would have to sit it out until investments recovered. 
    As you can appreciate - I am canvassing opinion and from lay person, there is conflicting advice here. 

    5k a year losing 2% inflation each year vs losing that amount in investment in my vanguard fund in 5 years time?

    This is fab though, thanks guys, this is exactly why I put the original post up. 

  • Marcusian said:
    You know i live in Torfaen in South Wales right? I myself was a tenant in the very same type of property I am looking at until late last year. 


    In places like Cwmbran/Pontypool you are still looking at  the ‘budget’ end of the properties - ie smaller/less popular properties in less popular areas. In 5 years will likely get you much less). 

    It is easy to think “I rented this place, I paid loads of rent I want a piece of that action”. But you need t look at whether it is best use of funds. 
    Also just because you would always pay rent do you think every potential tenant of that property would? (Having been in similar situation, not too far away, I wouldn’t touch where I rented with a barge pole as an investment!)

    How long could you cope without rent being paid? Do you want the responsibilities of being a landlord (stickies on the housing and renting board which detail the numerous regs you will have to comply with). 

    I agree with the above posters that as you are earning 60k+ there are far more tax efficient ways to invest. 


  • Marcusian said:
    You know i live in Torfaen in South Wales right? I myself was a tenant in the very same type of property I am looking at until late last year. 


    In places like Cwmbran/Pontypool you are still looking at  the ‘budget’ end of the properties - ie smaller/less popular properties in less popular areas. In 5 years will likely get you much less). 

    It is easy to think “I rented this place, I paid loads of rent I want a piece of that action”. But you need t look at whether it is best use of funds. 
    Also just because you would always pay rent do you think every potential tenant of that property would? (Having been in similar situation, not too far away, I wouldn’t touch where I rented with a barge pole as an investment!)

    How long could you cope without rent being paid? Do you want the responsibilities of being a landlord (stickies on the housing and renting board which detail the numerous regs you will have to comply with). 

    I agree with the above posters that as you are earning 60k+ there are far more tax efficient ways to invest. 


    This is sound reasoning for sure. Thank you 
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 14 March 2021 pm31 1:20PM
    Marcusian said:
    For a BTL purchase save the cash.  Returns may not be great however you'll avoid the inherent risk that comes with investing. 
    Ok so here is what i am trying to get my head around. A previous poster put this link up to essentially say, that at 5 years there is a 10% chance i would be down. Long-term investing: Increasing your chances of positive returns (nutmeg.com)

    Now, again I am just working through all this, this is a post from Nutmeg (he would say that), but still - is losing inflation for 5 years (guaranteed) more worthwhile than a 1 in 10 chance I would have to sit it out until investments recovered. 
    As you can appreciate - I am canvassing opinion and from lay person, there is conflicting advice here. 

    5k a year losing 2% inflation each year vs losing that amount in investment in my vanguard fund in 5 years time?

    This is fab though, thanks guys, this is exactly why I put the original post up. 

    Impossible to forecast the future. Nor is that any direct correlation between inflation and stock market returns.  Inflation isn't currently 2% either. If inflation were to rise to that level then it would negatively impact the return on some equities. With higher yields being demanded on Government bonds.

    That's the game that's being played in the US at the moment. Something which could spill out globally if the genie does manage to escape the bottle. 
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 348.3K Banking & Borrowing
  • 252.1K Reduce Debt & Boost Income
  • 452.4K Spending & Discounts
  • 240.9K Work, Benefits & Business
  • 617.2K Mortgages, Homes & Bills
  • 175.7K Life & Family
  • 254.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.