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  • FIRST POST
    • bluefukurou
    • By bluefukurou 2nd Aug 18, 3:29 PM
    • 75Posts
    • 18Thanks
    bluefukurou
    Should I invest in index funds or stick to my BTL plan?
    • #1
    • 2nd Aug 18, 3:29 PM
    Should I invest in index funds or stick to my BTL plan? 2nd Aug 18 at 3:29 PM
    Shares / funds etc will not call you up at 3am when there's a leak in the roof, a broken sink, the heating doesn't work.
    Shares will not have a void period.
    Shares will not incur a 20% management fee (at elast, once you add on the more than usually expensive costs to have anything fixed if you are absent and leave it to the agent to arrage a plumber, electrician, roofer etc)
    Unlike property, shares can be sold fractionally to minimise or eliminate CGT.
    Shares allow you to diverisfy, With a property you are 100% in the (say) Sheffield / Student / Terraced house market. In Shares you can be in the global economy.
    Shares will not trash the entire investment, do a moonlight flit nor need legal action to evict non rent paying tenants.
    Originally posted by AnotherJoe
    Hi, Iím a UK expat looking to invest my savings, currently approaching £90k; I have no credit card debts or car loans, etc, so Iím ready to do something instead of continuing to get less than 1% interest from my UK bank account.

    I was planning to buy a 2/3 bed terraced house up north in cash for around £100k and then let it out for another income stream (I have colleagues that have done just that and now own two or three). However, Iím increasingly hearing that shares are less hassle than investing in property (see the quote above), and I understand the long term capital growth can be very good.

    If I lived in the UK, I would probably open a Vanguard account and put some of my money in index funds. However, due to my non-resident status, Iím unable to do that.

    So along with a thousand others, my current questions are:

    Whatís the best way for me (UK expat in Middle East) to safely invest in index funds?

    Is there a good alternative to Vanguard that doesnít charge exorbitant fees?

    Would Internaxx be a good choice?
    Iíve had a look at their website, but I donít fully understand their fees. They mention an account maintenance charge of Ä45 every quarter if you donít have any trade activity, and Ä14.95 + 0.1% per trade. Is Ä180 per year considered typical?

    Any advice much appreciated.
Page 3
    • bluefukurou
    • By bluefukurou 8th Aug 18, 12:16 PM
    • 75 Posts
    • 18 Thanks
    bluefukurou
    My strategy is both share and BTL to get investment diversity.

    Landlords are definitely seen as 'the enemy' so its not surprising that fewer people are seeing this as a way forward versus shares etc.

    My view is that a combination of house prices, gig economy and mortgage restrictions means there are an ever increasing number of people who will never be able to buy a house so they will have to rent and this needs landlords. Govt strategy seems to be to drive out the 1-2 BTL's type landlords in favour of larger portfolio companies and this does seem to be happening.

    Interesting times and I am looking at switching from BTL to development as an alternative property strategy going forward
    Originally posted by haf63
    Do you have any links or evidence for the perceived move towards larger portfolio companies? What do you think are the reasons for the government to squeeze out the little man in favour of big fish?
    • bluefukurou
    • By bluefukurou 8th Aug 18, 12:29 PM
    • 75 Posts
    • 18 Thanks
    bluefukurou
    The fact that you may want to move back to the UK puts a different spin on this for me.

    I'd be inclined you look at buying a dwelling for this purpose alone. You will have hassles and costs and all that, but also the certainty that it gives you a basis should you come back. Take a look at political thoughts about guaranteeing tenants the right to stay for ages, as you want to sell when you return.

    You could then invest profit from rental income into a fund.

    Not saying you should do this, but it's something to think about.

    Of course, as a previous poster said, if you want to live in Oxford, it may not help you that much to have bought a house in Newcastle.
    Originally posted by Bimbly
    I will almost certainly move back to the UK and am aware that anything down south is off limits. But because I will eventually need somewhere to live, and even if I let it out it will be my only property, Iím still not put off by all the negativity about BTL. Perhaps Iím just stubborn. I suppose I could invest in shares and then cash out in the future when Iím back and ready to buy, but there are no guarantees the stock market wonít crash at the wrong time for me.

    As for buying in the north and wanting to move south, there must be some people from up north who moved to London and the south east back in the 80s and 90s, had a career there and now want to move back to where they grew up. They would be absolutely quids in.
    • Thrugelmir
    • By Thrugelmir 8th Aug 18, 12:32 PM
    • 61,295 Posts
    • 54,542 Thanks
    Thrugelmir
    Do you have any links or evidence for the perceived move towards larger portfolio companies? What do you think are the reasons for the government to squeeze out the little man in favour of big fish?
    Originally posted by bluefukurou
    Perception most likely arises from the fact that the boom in leveraged BTL is over. Property has historically been the preserve of those with capital. Without rapidly increasing property prices building a portfolio of substance is extremely difficult. Taxation changes were neccessary to level the playing field. Between owners and investors. Likewise poor quality housing is in abundance. Given the demands of a fast increasing population in some areas. Division of even average sized properties into bedsits being common place.
    Last edited by Thrugelmir; 08-08-2018 at 12:35 PM.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • bluefukurou
    • By bluefukurou 8th Aug 18, 1:01 PM
    • 75 Posts
    • 18 Thanks
    bluefukurou
    Given the demands of a fast increasing population in some areas. Division of even average sized properties into bedsits being common place.
    Originally posted by Thrugelmir
    Does that mean converting 3 bed houses into HMOs housing six tenants is the way to make money in the current climate?
    • jsinc
    • By jsinc 8th Aug 18, 1:07 PM
    • 113 Posts
    • 48 Thanks
    jsinc
    I know one thing, Iím glad I donít have to find a place anywhere near London or surrounding areas. Iím very lucky in that I have quite a large disposable income, but when I look at the price of property in the south, I doubt I could ever afford to live there. How the young will ever have a chance of buying a place to live unless they are extremely well paid I have no idea.
    Originally posted by bluefukurou
    On re-reading your op I missed the 'up north' part. My assessment is local, in the home counties, where yields are very low and prices now fairly static. The sums are probably different further north but from past experience of BTL I wouldn't consider a non-local property, even fully managed (evaluating the area and changes, getting replacements/work done that's not within the remit of simple recourse to agent, travelling time etc). More doable in practical terms if it's somewhere you're familiar with, and have people there you can trust for ongoing opinion and upkeep work.
    • dean350
    • By dean350 8th Aug 18, 1:13 PM
    • 10 Posts
    • 6 Thanks
    dean350
    On buying Vanguard if you are overseas - you can simply buy the shares on the London Stock Exchange through your platform. Vanguard All World ETF for example (which invests in all major stock markets in proportion to their sizes and holds over 3000 different stocks) is available on the LSE as VWRL.L. I have purchased this through my Internaxx platform a few times now.
    • Thrugelmir
    • By Thrugelmir 8th Aug 18, 2:58 PM
    • 61,295 Posts
    • 54,542 Thanks
    Thrugelmir
    Does that mean converting 3 bed houses into HMOs housing six tenants is the way to make money in the current climate?
    Originally posted by bluefukurou
    Seems to be way for some enterprising people. Economic migrants often arrive with very little. An offer of a "job" and reasonably priced accomodation must seem very attractive.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • bluefukurou
    • By bluefukurou 10th Aug 18, 10:17 AM
    • 75 Posts
    • 18 Thanks
    bluefukurou
    The sums are probably different further north but from past experience of BTL I wouldn't consider a non-local property, even fully managed (evaluating the area and changes, getting replacements/work done that's not within the remit of simple recourse to agent, travelling time etc). More doable in practical terms if it's somewhere you're familiar with, and have people there you can trust for ongoing opinion and upkeep work.
    Originally posted by jsinc
    My thoughts exactly. I would only buy in an area I am familiar with and also have family. Even as an expat, I visit home regularly (2/3 times a year), but traveling halfway across the country to deal with things on a holiday doesn't appeal. I know colleagues from the south east who have bought cheap BTL property in the north west, but have no ties to the area at all. I imagine some people can make it work, but with all the anti-BTL regulations coming in, it just seems like an extra potential pitfall.
    • bluefukurou
    • By bluefukurou 10th Aug 18, 10:19 AM
    • 75 Posts
    • 18 Thanks
    bluefukurou
    On buying Vanguard if you are overseas - you can simply buy the shares on the London Stock Exchange through your platform. Vanguard All World ETF for example (which invests in all major stock markets in proportion to their sizes and holds over 3000 different stocks) is available on the LSE as VWRL.L. I have purchased this through my Internaxx platform a few times now.
    Originally posted by dean350
    Do you happen to know what minimum investments for popular ETFs are likely to be? I read in a review online that there is a minimum transaction volume of Ä2,000 per fund, but I canít find that information on the Internaxx website.
    • bluefukurou
    • By bluefukurou 10th Aug 18, 10:24 AM
    • 75 Posts
    • 18 Thanks
    bluefukurou
    Seems to be way for some enterprising people. Economic migrants often arrive with very little. An offer of a "job" and reasonably priced accomodation must seem very attractive.
    Originally posted by Thrugelmir
    Your comment reminded me of this article and Mr.Haliburton.

    https://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/10972746/Buy-to-let-millionaires-the-recipes-for-success.html
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