Drawdown

Kim1965

I work in construction too. Like you i have only been able to fund pensions at a decent level for 4 years. I would have liked to have gone down the btl route when i was younger. I am sure the btl has worked well for you and you have been pro active about making a provision. I suppose im just saying that my work colleagues fund btl in preference to pensions, few have put pensions before btl. I think most investers argue that pensions is a better investment but few in the construction trades agree. 

Jaco70

Kim1965 said:

I work in construction too. Like you i have only been able to fund pensions at a decent level for 4 years. I would have liked to have gone down the btl route when i was younger. I am sure the btl has worked well for you and you have been pro active about making a provision. I suppose im just saying that my work colleagues fund btl in preference to pensions, few have put pensions before btl. I think most investers argue that pensions is a better investment but few in the construction trades agree. 

Yes, I think I agree. I believe pensions or investments are better now, but when I was younger I think I liked the idea of something I could drive past and touch. And my parents, who hadn’t invested in property (other than their main dwelling), were very keen on me buying houses. I think they felt they’d missed the boat in the 70s and 80s, when they could’ve bought a few more, but didn’t want the extra work of letting houses.

Now that I know that owning property (or almost anything else, the car died last week) is hassle, and I’m fascinated by investors like Buffett, I’m encouraging my teenagers the other way. My sixteen yo has just put 2k that he’d saved up into a fund, which was entirely his choice. I’m hoping it’s something he’ll build on in the next fifty years or so 🤞.

Albermarle

Kim1965 said:

I work in construction too. Like you i have only been able to fund pensions at a decent level for 4 years. I would have liked to have gone down the btl route when i was younger. I am sure the btl has worked well for you and you have been pro active about making a provision. I suppose im just saying that my work colleagues fund btl in preference to pensions, few have put pensions before btl. I think most investers argue that pensions is a better investment but few in the construction trades agree. 

Although it is often said that people with building/ DIY experience are better placed to make a success from BTL, as they can do a lot of the improvement work and maintenance themselves.
Also there is probably a hangover from the days when the tax treatment of BTL was very relaxed, and it was easier to make money than it is today.

Kim1965

Recent changes to cgt and the hassle with energy ratings etc surely has made btl less attractive. 

Jaco70

Kim1965 said:

Recent changes to cgt and the hassle with energy ratings etc surely has made btl less attractive. 

It has, but I’ve always had a long term view. I’ve never sold, or considered, selling a property. Although that said, I haven’t bought one for five years either.

I’m always surprised when I hear of small time landlords bailing out because of mortgage rate increases or tax changes, but then my building business has always been my priority, never the properties. Yes my mortgages have increased fairly dramatically of late, but then rents are heading North as well, so swings and roundabouts really.

The government would have to do something pretty dramatic (and I’m not ruling that possibility  out), or finding good tenants become much harder, for me to consider selling. In fact if house prices drop as predicted, I might see about raising funds to buy one or two more. The housing crisis makes it a decent bet for landlords IMO, and I don’t mean that in a smug or callous way. I wish it wasn’t so hard for youngsters, but nothing I do will change that.

I’m not smart enough for get rich quick money making, so I’m happy with long term investments. I have friends who buy and flip properties, but it seems to me that by the time you’ve paid fees either end, and been whacked for tax on the profit, you’d be better off keeping it. 

LHW99

t seems to me that by the time you’ve paid fees either end, and been whacked for tax on the profit, you’d be better off keeping it.

With the proposed reductions in cgt allowances that will be even more the case.