Property Funds v Renting Property Out !!

dibbs26

I have seen a few stories re the above, are these property funds alot less hastle than having to deal with tenants whilst also making more or less the same in income ?

sneekymum

Property Funds seem to be a fairly safe and stable alternative (or addition) to bond funds but with higher growth - 10 - 15%.

As Mother's Manager (and she has Commercial Property which is rented out) I find them a lot less hassle.

Of course - try withdrawing £8,200 in growth free of CGT from your real property...

eismarsh

RE: Property Funds:

More info/links please, out of curiosity, as I had considered buy-to-let but this seems to be not as favourable as it was..

What is the best way to research this Property Funding, and what capital would be a typical outlay from what source ? Who in MSE is the expert on this ?

:beer:

theGrinch

also need to factor in your ROI as you can borrow on property unlike many other assets

sneekymum

When it comes to comparing the hassles of each I'm the 'expert' - though I've got no financial qualifications - that would be 'Dunstonh' if he'd care to contribute.

To look at Property Funds goto HERE choose "Fund Provider" and look in New Star for Property and in Norwich Union. (There are other funds out there - I'll post some links to earlier threads later on.) To buy you need to have at least £1000 and MSE Martin recommends cheap ways to invest HERE. I don't think you can hold them in an ISA.

..edit...
We touch on Property in this thread (halfway down)...

sneekymum

theGrinch wrote:

also need to factor in your ROI as you can borrow on property unlike many other assets

Very true - I wasn't really thinking in terms of Mortgage - Property Funds are good as part of a range of investments if some money lands in your lap.

I also think they are a better alternative to a savings account (albeit for small lump sums) as there is not tax except on withdrawal and then only if the Capital Gain (interest) exceeds the annual allowance. But that's just my opinion....

EdInvestor

Property funds invest in commercial property, which is a different asset class from BTLs and your home, which come under the heading of residential property.
Thus there is no problem having an investment in both.

Most property funds are run by the big insurance companies.It is usually easiest to get exposure to this sector via your pension - or perhaps your endowment. If these are currently invested in another fund (eg with profits or a managed fund, say) then you can switch the money (or part of it) over to the insurer's property fund quite easily.(When switching out of With profits, always first check on things like demutualisation windfalls and any valuable guarantees you might lose).

Commerical property funds, which invest in office blocks, shopping centres and industrial parks mainly,have done very well for quite some years, with stable annual returns in the double digits. Definitely worth having as one of your investments IMHO.