Sell a flat and invest the proceeds

bostonerimus

aaaaancly said:

bostonerimus said:

Run a mile from anyone who promises you any sort of return. It seems to me that the wealth manager is onto a good thing and you are taking all the risk and paying to do it.

All I know is that he has done ok for me so far. Only just over a year though. 

I inherited shares and he is now managing them. 

How do I make money with money without taking a risk and paying someone to help?

At a minimum you must understand how your money is invested and what's happening. So ask questions and educate yourself before you do anything. I think if you do that you might find that you are perfectly capable of managing your own money. Anyway, why do you want to change course now, the flat seems to be doing ok for you.

Has "your guy" gone over exactly how your money will be invested? what is the fee? what sort of tax wrappers will be used? eg ISA etc.

aaaaancly

bostonerimus said:

aaaaancly said:

bostonerimus said:

Run a mile from anyone who promises you any sort of return. It seems to me that the wealth manager is onto a good thing and you are taking all the risk and paying to do it.

All I know is that he has done ok for me so far. Only just over a year though. 

I inherited shares and he is now managing them. 

How do I make money with money without taking a risk and paying someone to help?

At a minimum you must understand how your money is invested and what's happening. So ask questions and educate yourself before you do anything. I think if you do that you might find that you are perfectly capable of managing your own money. Anyway, why do you want to change course now, the flat seems to be doing ok for you.

Thanks,

Yes, understanding more is the main reason for asking here. 

The flat has done well. I'm just looking at options to simplify things. If I can get the same overall gains without the hassle of boilers,  tenants etc, then I will. I'm also  considering moving abroad part time so sorting problems would immediately become more difficult.

Then there's the potential CGT rise, and the diminishing lease. Do I want to be dealing with selling it in 10 years time...or even 20 if I last that long.

I haven't made my decision. It's a tough one.

I live on my own  have no children and have no close family so I have no one to bounce this off, or to make a long term plan with, and I have no children to think about leaving property to.

I also have little ambition. I don't have a business brain. I have just been very lucky with an inheritance.

MaxiRobriguez

aaaaancly said:

Voyager2002 said:

aaaaancly said:

Lease is down to 93 years and the freeholder is a poor communicator so I don't relish trying to increase it.

Does the valuation of your flat take into account that the lease is under 100 years?

You have rights in respect of the lease that a new owner would not have, so extending the lease is probably the single most effective thing you can do to increase the value of the flat.

Yes, the estate agent is aware of the lease. His comment was that it would make no difference to the price

Perhaps stop taking everyone's word for it when they have vested interest in securing your business?

Best thing you can do is educate yourself, so you can evaluate and challenge those you give your business to. Good luck.

aaaaancly

That's why I'm here. I agree that people aren't after my business to help ME

funnymonkey

Can you not sell your main residence (no CGT)
and live in the property you rented out?
I wouldn't touch any financial advisor as most will recommend the funds that pay the most commission. Of course theres some very good ones out there too.
Buyer beware.
I invest in stocks and do my own research.
Spend time, invest in good growth companies that have good fundamentals.
Good luck

Voyager2002

funnymonkey said:

Can you not sell your main residence (no CGT)
and live in the property you rented out?
I wouldn't touch any financial advisor as most will recommend the funds that pay the most commission. Of course theres some very good ones out there too.
Buyer beware.
I invest in stocks and do my own research.
Spend time, invest in good growth companies that have good fundamentals.
Good luck

I agree that CGT is an issue and suggest that the OP discusses with his accountant a long-term strategy to dispose of the flat at some point while minimising the tax paid. Most people, however, would feel that moving home to avoid a tax bill is too much of a sacrifice.

In the UK a financial advisor is legally obliged to tell clients about any commissions they receive. Probably the best way to use an advisor is to pay a fixed fee so that all commission money is returned to the client.

There is a school of thought that says that in the long term it is not possible to do better than the market average, so the intelligent strategy is to invest in tracker funds. That certainly saves on fees and commissions.

aaaaancly

funnymonkey said:

Can you not sell your main residence (no CGT)
and live in the property you rented out?
I wouldn't touch any financial advisor as most will recommend the funds that pay the most commission. Of course theres some very good ones out there too.
Buyer beware.
I invest in stocks and do my own research.
Spend time, invest in good growth companies that have good fundamentals.
Good luck

I could....but it's much nicer here!

I don't think my guy gets comission....he charges me an annual fee based on the total investment that I have with him.

If he is collecting commission as well I wouldn't be pleased, although I mainly hold stocks and shares plus a couple of funds like Baille Gifford global. Do these attract commission for the broker?

bostonerimus

aaaaancly said:

bostonerimus said:

aaaaancly said:

bostonerimus said:

Run a mile from anyone who promises you any sort of return. It seems to me that the wealth manager is onto a good thing and you are taking all the risk and paying to do it.

All I know is that he has done ok for me so far. Only just over a year though. 

I inherited shares and he is now managing them. 

How do I make money with money without taking a risk and paying someone to help?

At a minimum you must understand how your money is invested and what's happening. So ask questions and educate yourself before you do anything. I think if you do that you might find that you are perfectly capable of managing your own money. Anyway, why do you want to change course now, the flat seems to be doing ok for you.

Thanks,

Yes, understanding more is the main reason for asking here. 

The flat has done well. I'm just looking at options to simplify things. If I can get the same overall gains without the hassle of boilers,  tenants etc, then I will. I'm also  considering moving abroad part time so sorting problems would immediately become more difficult.

Then there's the potential CGT rise, and the diminishing lease. Do I want to be dealing with selling it in 10 years time...or even 20 if I last that long.

I haven't made my decision. It's a tough one.

I live on my own  have no children and have no close family so I have no one to bounce this off, or to make a long term plan with, and I have no children to think about leaving property to.

I also have little ambition. I don't have a business brain. I have just been very lucky with an inheritance.

I'm a landlord myself so I understand the hassle of fixing things and having money tied up. The lease is a very important consideration, but with 93 years left there's no hurry so don't do anything until you fully understand what you are doing. You should only employ an independent financial advisor and then only if you fully understand what they are doing for you, how your money is invested and you basically don't want the trouble of dealing with things or maybe if you have some particularly complex tax or investment situation. Your situation seems relatively simple, you can put the money into an inexpensive multi-asset fund and use your ISA allocation each year to get tax relief and if you have a workplace pension you increase your contributions to that.

aaaaancly

Deleted_User said:

I'd sell the BTL, and learn to invest myself, without using a expensive advisor. A good website to learn the basics of investing is Monevator, e.g.  There is a bit to learn, but once you've got a plan, it can be very hands-off.

Trying to take 5% a year from investments is challenging. You shouldn't rely on that. If markets are favourable, it's possible, but you should be prepared to settle for a bit less. But the thing is that it's harder to do it with an advisor, because you have to pay their charges, too, so you need to push for an even higher return. The advisor will happily take their percentage, and if market continue to be favourable (as they have over the last year), imply it's because of how good they are; but if markets turn unfavourable, explain that it's extraordinary conditions, and it's not their fault that you might have to choose between taking less income or depleting your capital.

(On whether the advisor has hidden fees: if they are not an Independent Financial Advisor, they may only be using funds from an associated company, which have higher charges than similar funds which an IFA, who can pick funds from any company, would use.)

The tax on selling the flat is unfortunate, but it will only go up over time. Perhaps ask your accountant approximately how much it will be? And this seems like a decent time to get out in terms of the remaining lease length.

Thank you.

It has been a fair year despite coronavirus. I did ok. My portfolio with them is mainly stocks and shares. They are ex Brewin dolphin and Hargreaves Hale people.

I'm unsure whether I could match their performance, but I will certainly look at the videos linked. I do wonder whether I could just mirror their choices but that would increase my exposure to certain areas wouldn't it. Someone mentioned tracker funds, I'm looking at them.

The accountant agrees that there will be a liability of approx £33k if I sell the flat now. So if I achieve £250k after selling charges I should have c£217k cash.

Still no closer to a decision, but I'm privileged to have the decision to make, and I'm getting great food for thought from everyone's comments.

whatstheplan

As a landlord myself, I'd say if you're planning to live abroad for x months a year it might be an idea to sell the rental property to avoid the almost inevitable headaches that will arise when you're not in the country to resolve them yourself.  Letting agents that you might engage to manage the property in your absence are often merely adequate at best and charge for almost everything.

I intend to retain one of my BTLs into my old age to boost my pension pot, however I'm not intending to live abroad so will be on hand to be better involved as and when any issues arise.