Cash or property

Mr.Generous

I know its looking back not forward but this is an actual property I bought 4 years ago.

Purchase price £73k

Purchase costs £4k

Renovation costs £8k

Spend total £85k

Renovation took 6 months - do it myself with help from my brother.

Rent per year £8100  - £28k so far (no increases to date!!)

Current market value £150k

Made £23k per year.

CEON44

mongoose2009 said:

hopefully a nice correction to massively over priced houses

I see 30% drop to get back to fair value

and that will mean first time buyers can get on the property ladder

Fair enough. But i live in Northern Ireland and prices have only now caught up with the pre 2008 levels. Of course they can fall again but maybe not so bad??  Who knows?

canaldumidi

BTL is an increasingly regulated market with reduced tax benefits and increased costs (eg recent introduction of electrical tests - just one of many).

Soon coming are changes to S21 Notices/eviction giving tenants better protection.

Potentially lots of work even if using an agent. And always the risk of a rogue tenant - months with no rent, damage, eviction costs......

If you want property, put the money into an investment  property fund.

Go and have a look at the property board here  too....

CEON44

canaldumidi said:

BTL is an increasingly regulated market with reduced tax benefits and increased costs (eg recent introduction of electrical tests - just one of many).

Soon coming are changes to S21 Notices/eviction giving tenants better protection.

Potentially lots of work even if using an agent. And always the risk of a rogue tenant - months with no rent, damage, eviction costs......

If you want property, put the money into an investment  property fund.

Go and have a look at the property board here  too....

Thanks. Heard enough to put me off property. So my best course i think is wait a couple of weeks and see how this latest interest rate affects savings rates and go for a 3 year fixed saver. Then maybe look at some stocks if/when things settle down. 

Bigwheels1111

CEON44 said:

canaldumidi said:

BTL is an increasingly regulated market with reduced tax benefits and increased costs (eg recent introduction of electrical tests - just one of many).

Soon coming are changes to S21 Notices/eviction giving tenants better protection.

Potentially lots of work even if using an agent. And always the risk of a rogue tenant - months with no rent, damage, eviction costs......

If you want property, put the money into an investment  property fund.

Go and have a look at the property board here  too....

Thanks. Heard enough to put me off property. So my best course i think is wait a couple of weeks and see how this latest interest rate affects savings rates and go for a 3 year fixed saver. Then maybe look at some stocks if/when things settle down. 

With the savings will tax matter.
Due to my circumstances I can get over 10k of interest tax free.
So will take accounts with interest paid annually.
Not at maturity as would be 30k in 3 years and quite a bit of tax to pay.

london21

The next few months would be interesting.
The prices are not sustainable.
Uncertain times. 

Woolsery

Mr.Generous said:

I know its looking back not forward but this is an actual property I bought 4 years ago.

Purchase price £73k

Purchase costs £4k

Renovation costs £8k

Spend total £85k

Renovation took 6 months - do it myself with help from my brother.

Rent per year £8100  - £28k so far (no increases to date!!)

Current market value £150k

Made £23k per year.

So you have abilities in the building/renovating department, just as I've some experience with farm land. If that's the case then, BTL on a cheap property might be less of a problem for you, just like owning a couple of fields wouldn't worry me. I could get my fields tenanted and maintained quite easily and farm land seems less risky than housing, judging by the way things went in 2008/9. We didn't have a food crisis then either.

The ease of investing in anything is usually down to what people know and are comfortable with. Property and being a landlord isn't for everyone. Similarly, stocks may not suit the OP if they think that when things 'settle down' is the best time to invest.

Woolsery

london21 said:

The next few months would be interesting.
The prices are not sustainable.
Uncertain times. 

We have had 'uncertain times' for most of the history of the human race. I distinctly remember at the time of the Cuban missile crisis doubting I'd make the grand old age of 21. I was around 14 at the time and most of my friends had a similar outlook. I believe it made us somewhat angry, rebellious and inclined to take unnecessary risks. Of course, our parents thought us ungrateful little tykes, because they believed they'd fought a war on our behalf and given us everything, but we never asked them to do that!

We've been back in uncertain territory for 2.5 years now and I believe it's deliberate. The media delight in bringing us bad news because it serves their owners' purposes. The rich used to employ the church to keep the common man on the straight and narrow, but now warnings of physical and fiscal doom are applied to the same effect.

I bet few are aware the latest studies show the planet hasn't shown significant overall increases in warming for the last 15 years or that in 2020, when we were in the grip of a 'pandemic,' all-cause mortality was surprisingly normal. That's not news....or rather, not bad news. It doesn't fit the agenda.

Yes, house prices will fall, but as in 2008/9 only some people will be able to benefit from that. Plan for the longer term and assume you will be around to enjoy the fruits of doing that, whatever they may be.

chucknorris

CEON44 said:

With so much talk of impending doom in the economy im looking for some advice. I have enough cash to buy a sub 100k property. So is this a good idea at the minute or would it be better to keep the cash. Cash is not invested nor tied up so just getting 1.5% in Chase account. My worry on the property side of course is we may be at a peak and over the next few months this could devalue greatly. Any thoughts?

I would say, don't invest it in property, I am definitely NOT one of those doomsters that have always been about being anti-property, just ask Crashy (if you know who that is/was). I made my money with property, but the tide has now turned, we still have about £2.5m invested, but most has been sold (and invested elsewhere) in the last 5 years. What I say to you is:

1. The tax advantages have diminished.
2. I can't see much upside (above inflation) for capital gain (only my opinion)
3. New regulations seem to be always being imposed (or on the back burner)
4. Property is a real hassle (trust me I know), and still so, even if you use a letting agent, and not only are they an expense, they can cause problems themselves too.