Crazy time for new BTL or put in own home?

Albermarle

marysmarket said:

Thanks for the responses. I've previously had one BTL a decade ago, no big problems but it was too much stress as I was building my career so cashed it in. I know it's a very different ball game. I guess I'm a few years too late now and the BTL bubble has burst.

Anyone still optimistic about BTL? It seems every other landlord is selling up. 

The idea of locking away money onto a pension is tempting but feels a very limiting in terms of retirement age. Foolhardy I know!

You can withdraw from a pension from age 55 ( going up to 57 in 2028).
Despite what you might read/see in the media, very few people can afford to retire earlier than that, unless they are relying on someone else.
Even retiring at 57 is quite early, and needs a lot of money/good pension to have any kind of decent lifestyle. The amount needed is usually underestimated, as is how long you will live.

marysmarket

ReadySteadyPop said:

marysmarket said:

Albermarle said:

How about investing some of it away from property. In a pension for example. It is always good to have some diversity in your personal finances.

Any ideas other than pensions? 

Money market fund, that is more popular than BTL now.

Can you say more on this please? 
I'm a complete novice at investments (beyond bricks and mortar).

marysmarket

[Deleted User] said:

It's hard to see how a simple BTL can be profitable in view of second home stamp duty, mortgage interest rates having increased, and likely changes to capital gains tax. If anyone is in a position to mitigate those factors, then perhaps.

Gone are the days when about anyone without much thought could do alright with BTL. I did better than most with a careful plan: right area, hmo, self managed etc. The eventual outcome, great rents, capital increase, selling before CGT rates increase. A combination of judgment and good luck.

I believe that the same opportunity does not exist today as it did 10 or 20 years ago. If someone can find a niche and make a profit in the current environment, fair play to them.

I sold up this summer, money is going into ISAs. Decent fixed income. Minimal effort.

Sadly I think you are right. I have had BTLs years ago post the crash and did well. Life circumstances meant cashing in but now regretting it somewhat. That said I'm sure some landlords still make this work, I'm guessing if you have a mammoth portfolio?

I do have a secure (for now) full time salary but sadly feel I will be working well into my 60s at this rate hence trying to sort myself out.

Albermarle

I do have a secure (for now) full time salary but sadly feel I will be working well into my 60s at this rate hence trying to sort myself out.

Hopefully you are contributing to your workplace pension?

ReadySteadyPop

marysmarket said:

ReadySteadyPop said:

marysmarket said:

Albermarle said:

How about investing some of it away from property. In a pension for example. It is always good to have some diversity in your personal finances.

Any ideas other than pensions? 

Money market fund, that is more popular than BTL now.

Can you say more on this please? 
I'm a complete novice at investments (beyond bricks and mortar).

https://www.investopedia.com/terms/m/money-marketfund.asp

https://www.ft.com/content/e3e5ad22-64b3-43f5-8592-eb21bb83f289

https://www.vanguardinvestor.co.uk/investments/vanguard-sterling-short-term-money-market-fund-investor-gbp-income-shares/distributions

You could benefit from periods of market volatility or future rate hikes (opposite of mortgaged BTL) but always DYOR

ReadySteadyPop

Albermarle said:

I do have a secure (for now) full time salary but sadly feel I will be working well into my 60s at this rate hence trying to sort myself out.

Hopefully you are contributing to your workplace pension?

Always a good plan.

jjjoe52

If current home is large enough (for example a couple with 2 kids = 3 bedroom, reasonable size garden), then I would do none of it, I would invest elsewhere. Maxed out ISA's, maxed out premium bonds for everyone, other investments.

ReadySteadyPop

jjjoe52 said:

If current home is large enough (for example a couple with 2 kids = 3 bedroom, reasonable size garden), then I would do none of it, I would invest elsewhere. Maxed out ISA's, maxed out premium bonds for everyone, other investments.

Good advice, PB`s are much less hassle than BTL.