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£450k investment

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  • Keep_pedalling
    Keep_pedalling Posts: 20,937 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
    How have you got to this age with no pention provision? Are you currently earning? If so how much?


  • MEM62
    MEM62 Posts: 5,323 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    ALr66 said:
    jimjames said:
    ALr66 said:

    Pension provision? No pension at all.
    Experience as a landlord? No experience as a landlord.
    Risk tolerance (for investing in Stocks and shares)? As lower risk as possible.

    I think you need to review your assessment of risk. It's a common misconception but saying you want lower level of risk as possible doesn't stack up with having a single BTL property and no landlord experience and not having any pension provision. Risk isn't on/off, there are different levels and different types. Having a fixed income from interest on savings might seem secure now but after 30 years when inflation has taken it's toll that £1000 a month might only be worth the equivalent of £300 today.
    Isn't this where purchasing a BTL might make more sense as it will stay in line with inflation?
    It is not tax-efficient as an investment.
    It is not a passive investment - you are running a business.
    One bad tenant can cost you plenty
    You will have void periods
    You will have responsibilities / obligations
    Rent increases might not necessarily keep up with inflation

    Makes more sense?  I don't think so.

    With that sum of money and limited knowledge you really should be talking to an IFA.     

  • Bostonerimus1
    Bostonerimus1 Posts: 1,439 Forumite
    1,000 Posts Second Anniversary Name Dropper
    MEM62 said:
    ALr66 said:
    jimjames said:
    ALr66 said:

    Pension provision? No pension at all.
    Experience as a landlord? No experience as a landlord.
    Risk tolerance (for investing in Stocks and shares)? As lower risk as possible.

    I think you need to review your assessment of risk. It's a common misconception but saying you want lower level of risk as possible doesn't stack up with having a single BTL property and no landlord experience and not having any pension provision. Risk isn't on/off, there are different levels and different types. Having a fixed income from interest on savings might seem secure now but after 30 years when inflation has taken it's toll that £1000 a month might only be worth the equivalent of £300 today.
    Isn't this where purchasing a BTL might make more sense as it will stay in line with inflation?
    It is not tax-efficient as an investment.
    It is not a passive investment - you are running a business.
    One bad tenant can cost you plenty
    You will have void periods
    You will have responsibilities / obligations
    Rent increases might not necessarily keep up with inflation

    Makes more sense?  I don't think so.

    With that sum of money and limited knowledge you really should be talking to an IFA.     

    BTL also locks up your capital. I own a single rental flat and it is a commitment. More than that and it's a full time job...or you pay a management company to do it which will take a lot of your cash flow.
    And so we beat on, boats against the current, borne back ceaselessly into the past.
  • thunderroad88
    thunderroad88 Posts: 83 Forumite
    Third Anniversary 10 Posts
    vacheron said:
    £450k in a 5% cash savings account will give you £1,875 per month before tax with virtually zero effort.

    Not sure how much more a £450K BTL would give you in your area, but after all of the deductions and BTL risks, plus the awful tax treatment for non-business BTL income, is it worth the extra hassle for the extra you might make? We recently did some back of napkin calculations and categorically decided it wasn't!
    But of course his property in theory will be constantly appreciating unlike the cash in the bank. Having said that, I’m like you, anytime I’ve thought about btl as an option I’ve ultimately decided I don’t want the hassle of owning another property and stuck it all in a mix of equities and fixed income.
  • dinosaur66
    dinosaur66 Posts: 272 Forumite
    100 Posts
    How have you got to this age with no pention provision? Are you currently earning? If so how much?



    i have no pension
     he will have been self employed his whole life like many of us who left school in 70/s 80s

    like most of us we have no private pension / its why a large ammount of landlords are self employed 50 to 70 somethings as it was seen as a pension pot
  • dinosaur66
    dinosaur66 Posts: 272 Forumite
    100 Posts
    MEM62 said:
    ALr66 said:
    jimjames said:
    ALr66 said:

    Pension provision? No pension at all.
    Experience as a landlord? No experience as a landlord.
    Risk tolerance (for investing in Stocks and shares)? As lower risk as possible.

    I think you need to review your assessment of risk. It's a common misconception but saying you want lower level of risk as possible doesn't stack up with having a single BTL property and no landlord experience and not having any pension provision. Risk isn't on/off, there are different levels and different types. Having a fixed income from interest on savings might seem secure now but after 30 years when inflation has taken it's toll that £1000 a month might only be worth the equivalent of £300 today.
    Isn't this where purchasing a BTL might make more sense as it will stay in line with inflation?
    It is not tax-efficient as an investment.
    It is not a passive investment - you are running a business.
    One bad tenant can cost you plenty
    You will have void periods
    You will have responsibilities / obligations
    Rent increases might not necessarily keep up with inflation

    Makes more sense?  I don't think so.

    With that sum of money and limited knowledge you really should be talking to an IFA.     

    from 2025 your first years income as a landlord in england is a complete write off due to all the new fees
    but

    buy the right property and still a good investment 
    this example is my sisters and not my own
    52k- 1989 -3 bed dagenham
    500k -2025
    rent 5 k in 1990  -18 k  in 2024 self managed albeit there are fees for registering with council and hmrc of course.
      34 year time frame
    one mistake she has made is that she has not paid a single penny of the capital of an interest only mortgage but she does not care 

     pass it on as part of the estate and inheritance tax is liable / but no capital gains to pay for inheritors saving them £100k
    use tennats who are tradesmen to do the work and pay them accordingly / sister does this on this property she has a lithuanian builder and family / or you have a self employed kitchen fitter/bathroom fitter handyman and a self employed gas saftey engineer/plumber and give tenants there card whenever a problem arises /
    this is who i use for my rentals and a retired builder and his son  who are all friends of mine in scotland

    bad tenants are bad but rarer than tv programes would make you believe / 
    i have never had any /  have open weekends when a property is vacant /vet and chose who you want yourself -do not let it be a bidding war /do due dillegence /

    there are no void periods bar how long  it takes to paint and decorate an empty property and advertise and hold an open weekend for viewings
     there are so many applicants per viewing you feel sorry for a lot of them all ask do you have any others for rent as do every single tenant i have asking o behalf of there family members /

    landlord hmrc tax return if you have done it before is 10 mins and record keeping over the year is basically 5 minute a month and thats on multiple propertys.

    but i admit i am biased as it is the route i chose /i see the returns to be had by investing on markets and despite watching the financial tv channels for years and years have not taken the chance to try it myself when i should have. ..


  • Albermarle
    Albermarle Posts: 27,999 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    How have you got to this age with no pention provision? Are you currently earning? If so how much?



    i have no pension
     he will have been self employed his whole life like many of us who left school in 70/s 80s

    like most of us we have no private pension / its why a large ammount of landlords are self employed 50 to 70 somethings as it was seen as a pension pot
    Also as you mention in your previous post, a lot of self employed people are in the building trades.
    This is a big advantage when you are improving/running btl properties, and can be the difference that means you can make a good business out of it.
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