£450k investment

ReadySteadyPop

FlorayG said:

don't be put off BTL if you want an income; just make sure you do plenty of research on being a landlord before you dive in!

450k is a ready made income as liquid cash, why go to the trouble of BTL and risk your capital to make the same, or  probably less income? BTL isn`t for people who already have 450k BTL was aimed at people with no capital prepared to borrow on the hope of securing an income stream for the future, many who did this in recent years are no doubt regretting the decision as their debt costs and other costs have gone up as well as the level of responsibility/legal compliance. Keep 450k well away from BTL is my advice.

Stubod

I would strongly advise against BTL, particularly if you have no prior experience!!!

ReadySteadyPop

Stubod said:

I would strongly advise against BTL, particularly if you have no prior experience!!!

Good advice.

_Penny_Dreadful

ALr66 said:

Hi all,

I have £450k to invest for an income and am not sure whether to purchase a buy to let property or put the money in something like an NS&I Bond.

I'm 52 years old with no pension and I'd like this to provide an income with as little risk as possible.

I have no experience as a landlord and would probably look for a management agency.


What are people thoughts?

Thanks

Don’t put all your eggs in one basket. BTL is not a particularly tax efficient investment but that doesn’t mean it’s a bad investment. It should be part of a diverse portfolio though and not your only investment. 

If you do decide BTL is the right investment choice for you then get yourself educated. If you’re not up to speed with your legal requirements you won’t be able to select a good letting agent or ensure they’re keeping on top of things. In my experience I’ve had to ride letting agents far harder than any tenant I’ve ever had. Anyone can set themselves up as a letting agent, no qualifications or training required. 

Herzlos

If you go BTL, make sure you get a good agent and insurance that covers you for the tenant not paying.

What are you planning on doing come retirement? Continue drawing an investment or trying to get money out?

Have you maxed out your pension contritutions?

I'd try and max out your pension and ISA's first - cash if you want it soon, S&S if you want it later.

It's almost certainly worth seeking out an actual financial advisor too, rather than asking people online. Our opinion is worth what you've paid for it.

ReadySteadyPop

 If you opened three or four index funds for the main global markets and bought the dips I think you would make far more with much less hassle than you ever could by throwing this money into BTL.

ReadySteadyPop

Herzlos said:

If you go BTL, make sure you get a good agent and insurance that covers you for the tenant not paying.

What are you planning on doing come retirement? Continue drawing an investment or trying to get money out?

Have you maxed out your pension contritutions?

I'd try and max out your pension and ISA's first - cash if you want it soon, S&S if you want it later.

It's almost certainly worth seeking out an actual financial advisor too, rather than asking people online. Our opinion is worth what you've paid for it.

Many FA`s opinions won`t be worth what you pay for them though, you could do most of the investigation yourself on the internet?

kinger101

I agree with those saying stay away from rental property.  With just one or two properties, you're too reliant on reliability of the tenant to pay rent and not trash the property.  Removing a tenant can take years.  You can only really spread the risk by having a decent number of properties.

Before I bought my first house, I let from a landlord who had let three.  He thanked me when I moved out   I was the only one who paid on time and returned the property in good condition.  The one I had been renting quickly went on the market.

I know that's anecdotal and doesn't make it data, but my gut feeling is that bad tenant's are not all that rare. 

And even nice tenants can fall on hard times. If they can't pay the rent,  staying put until they are evicted might be their best option.

Herzlos

ReadySteadyPop said:

Herzlos said:

If you go BTL, make sure you get a good agent and insurance that covers you for the tenant not paying.

What are you planning on doing come retirement? Continue drawing an investment or trying to get money out?

Have you maxed out your pension contritutions?

I'd try and max out your pension and ISA's first - cash if you want it soon, S&S if you want it later.

It's almost certainly worth seeking out an actual financial advisor too, rather than asking people online. Our opinion is worth what you've paid for it.

Many FA`s opinions won`t be worth what you pay for them though, you could do most of the investigation yourself on the internet?

No FA will provide advice as bad as you do, though. A good FA should be registered with the FCA and actually know what they are doing.

Mine saved me so much on a mortgage I'd recouped his fee within a couple of months.

Murphybear

FlorayG said:

don't be put off BTL if you want an income; just make sure you do plenty of research on being a landlord before you dive in!

Totally agree.  As a letting agent for years we had no tenant wrecking a property and only one tenant out of literally thousands who didn’t pay the rent.  

As you have no experience then use a lettings agent.  One suggestion.  Find one who is ARLA registered as they will have passed the ARLA exams so they should have good knowledge.  The advanced exams are quite difficult and require in depth knowledge. (Talking from experience  ).   If you have any problems with them you can make a complaint to ARLA.

Note:  I believe ARLA is now part of Propertymark.