70k to invest, buy to let?

70k to invest, buy to let?

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Pesty

Original Poster:

42,655 posts

255 months

Saturday 16th June 2018
quotequote all
After selling a few assets I’ve ended up with around 70k

I know nothing of finance or investments or shares.

I’m not a risk taker just doesn’t sit well with me. I don’t undertsand or would dare buy shares.

If I leave it just sitting in the bank I know enough to realise inflation with deminish it over the years

So that leaves me buying somewhere and renting it.

It’s all I can think of, money has never been one of my motivations I’m thinking get a return and if I need money in future I can sell and probably not lose anything.

Pitfalls, is going into something like that going to be a huge headache for a novice?


PurpleMoonlight

22,362 posts

156 months

Saturday 16th June 2018
quotequote all
I assume you would be taking on a mortgage.

Are you a 40%/45% tax payer?

Do you currently own a property?

xeny

4,271 posts

77 months

Saturday 16th June 2018
quotequote all
Pesty said:
I know nothing of finance or investments or shares.

I’m not a risk taker just doesn’t sit well with me. I don’t undertsand or would dare buy shares.
Just to point out that getting a good enough understanding of investing to do it well enough isn't that hard.

Note also that property is not entirely free of risk, especially if it involves borrowing.

Badda

2,655 posts

81 months

Saturday 16th June 2018
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Not a bad idea at all. I can think of a couple of University cities where you’ll get a one bedder for that price and rent it out for £450 a month with ease. Appealing?

Deesee

8,331 posts

82 months

Saturday 16th June 2018
quotequote all
Property can be one of the riskiest asset classes once rental voids, maintenance (annual) structural/cosmetic repairs are taken into account.

I sure you’ll get a good steer from here what way to go.

Tax changes and general cultural changes (from next March) could mean the demand on housing falls and prices/yields are suppressed or even reduce.

Kiv 70k is a nice bit of cash, likewise what you have said with inflation what’s the real value in a few years, in reality it’s 3 1/2 years ISA allowance, don’t discount placing some money in the financial markets, and having a balanced approach to your funds.

Good luck

anonymous-user

53 months

Saturday 16th June 2018
quotequote all
Pesty said:
I know nothing of finance or investments or shares.
So are you a property expert??

The BTL party is well and truly over for Joe Average. Taxed on the way in, taxed on the way through and taxed on the way out.

In your situation the best starting point for many people is to look at investments which are partly or fully tax free, which gives you a massive head start. That generally means ISA and/or pension.

You don't need to know the first thing about stocks and shares to invest in a mainstream ISA or SIPP (pension) where things called "funds" are managed by a professional fund manager on your behalf. All you need to do is make some rudimentary decisions about where you want to be on the risk/return spectrum and how long you're investing for. You'll get loads of guidance on this forum if you want to. [Although watch out for anyone who pops up with superficially helpful answers but is actually touting for business.]

joyless lobotomised parrot

5,637 posts

110 months

Saturday 16th June 2018
quotequote all
Here's the type of thing you need.

http://www.futurepropertyauctions.co.uk/property_d...

Bought separately no tax on the way in, very little annual tax to pay if strategised well, and ditto on disposal too.

Easy to get managed too for 10% of the rent.

Be very surprising if you didn't nett 10% of the price as your annual pocket money.





Edited by joyless lobotomised parrot on Saturday 16th June 15:31

Saleen836

11,061 posts

208 months

Saturday 16th June 2018
quotequote all
joyless lobotomised parrot said:
Here's the type of thing you need.

http://www.futurepropertyauctions.co.uk/property_d...

Bought separately no tax on the way in, very little annual tax to pay if strategised well, and ditto on disposal too.

Easy to get managed too for 10% of the rent.

Be very surprising if you didn't nett 10% of the price as your annual pocket money.





Edited by joyless lobotomised parrot on Saturday 16th June 15:31
How is there no tax on the way in by buying seperately?

bitchstewie

50,782 posts

209 months

Saturday 16th June 2018
quotequote all
Pesty said:
After selling a few assets I’ve ended up with around 70k

I know nothing of finance or investments or shares.

I’m not a risk taker just doesn’t sit well with me. I don’t undertsand or would dare buy shares.
You could learn a lot by Wednesday afternoon simply by watching a few videos and reading a few books.

It's £70k so it's worth putting some time and effort in.

xeny

4,271 posts

77 months

Saturday 16th June 2018
quotequote all
b***hstewie will shortly be offering the "4 day course to equity investing success" , but more seriously, I find buying equities easier, cheaper and less stressful than buying property.

mike9009

6,918 posts

242 months

Saturday 16th June 2018
quotequote all
I don't have any BTL and as others have said the benefits are slowly being taxed out.

The other issue is you have all your eggs in one big basket, which could turn sour and would be more difficult to liquidate. (For example, recession hits, you lose your job, property markets crashes and you cannot sell the property - never happened before...…;) )


I would look at spreading the investment/ risk somewhere else.



Mike

Pesty

Original Poster:

42,655 posts

255 months

Saturday 16th June 2018
quotequote all
Thanks guys,

A good man knows his limitations, I have mental block when it comes to those sort of things. Shares etc. I’ve tried I admit defeat plus add to scared of losing it all with nothing to show for it. I grew up with very little in a poor area ( get violins out) I’m scared of losing it with nothing to show. It’s going to take a lot of education to get around those mental road blocks I don’t even bet on the national. I don’t think I’ll ever get it.

The way I see it buying a property would leave me with a solid asset that I guess will not lose much maybe even increase in value although round here hmmm maybe not

If it turns out too much of a headache I could always sell it. I’m just worried about the hassles I might get from tenants

So why am I throwing this idea out to strangers on the net obviously where finance is concerned I’m not confident it’s just the way I am.

I have a place in another country that after 5 years is starting to pay for itself but it’s been too much hassle to be honest we’ve had some difficult people in, lots of repairs and lots of hassle.

It’s the hassle I can’t be doing with, just don’t have patience for paper work pretty sure I have some sort of condition or I’m just too stressed whatever

Sort of property you get around here for that is getting around £450 a month. For as little hastle as possible it look like an agency can take care of it for 15% plus I’d be taxed 40% on that. Painting,decorating etc I’m not sure it’s worth it.

Or is it

Oh I don’t know might just buy a grand Cherokee or something.

Pesty

Original Poster:

42,655 posts

255 months

Saturday 16th June 2018
quotequote all
mike9009 said:
I don't have any BTL and as others have said the benefits are slowly being taxed out.

The other issue is you have all your eggs in one big basket, which could turn sour and would be more difficult to liquidate. (For example, recession hits, you lose your job, property markets crashes and you cannot sell the property - never happened before...…;) )


I would look at spreading the investment/ risk somewhere else.



Mike
We yeah now you’ve done it, that’s that idea out the window

Spreading it makes sense what on?

xeny said:
b***hstewie will shortly be offering the "4 day course to equity investing success" , but more seriously, I find buying equities easier, cheaper and less stressful than buying property.
How much is this course I definitely need it.

Pesty

Original Poster:

42,655 posts

255 months

Saturday 16th June 2018
quotequote all
Saleen836 said:
joyless lobotomised parrot said:
Here's the type of thing you need.

http://www.futurepropertyauctions.co.uk/property_d...

Bought separately no tax on the way in, very little annual tax to pay if strategised well, and ditto on disposal too.

Easy to get managed too for 10% of the rent.

Be very surprising if you didn't nett 10% of the price as your annual pocket money.





Edited by joyless lobotomised parrot on Saturday 16th June 15:31
How is there no tax on the way in by buying seperately?
I’m wondering that

I was looking at this. Just down the road

http://www.rightmove.co.uk/property-for-sale/prope...

I can stretch to 80 cash just wanted to have a little buffer in the bank for toys and issues

Deesee

8,331 posts

82 months

Saturday 16th June 2018
quotequote all
Pesty said:
I’m wondering that

I was looking at this. Just down the road

http://www.rightmove.co.uk/property-for-sale/prope...

I can stretch to 80 cash just wanted to have a little buffer in the bank for toys and issues
Have a look at the sales on the link from the street, area seems quite sensitive to prices ie 2008, sales of 60k ish, 2010 30k ish, now 80k ish.

croyde

22,703 posts

229 months

Saturday 16th June 2018
quotequote all
Pesty said:
I’m wondering that

I was looking at this. Just down the road

http://www.rightmove.co.uk/property-for-sale/prope...

I can stretch to 80 cash just wanted to have a little buffer in the bank for toys and issues
F me!! £80k for a house. I know it's oop North but what else is wrong with it biggrin

I doubt that'd buy me a parking space round here. The tiny 1.5 bed flat I'm renting is about £600k to buy in a not brilliant area of SW London.

bitchstewie

50,782 posts

209 months

Saturday 16th June 2018
quotequote all
Pesty said:
How much is this course I definitely need it.
If I were to make some basic suggestions on first steps that have helped me try to go from zero to hopefully having some kind of basic knowledge:

  • Go to YouTube and watch every single Fundsmith AGM video you can find
  • Go buy a copy of Buffettology and read it
  • Watch as many Berkshire Hathaway AGM videos as you can sit through
  • Go here http://kroijer.com and watch all the videos
  • Ask lots of questions and get lots of opinions
  • Look at getting a Stocks & Shares ISA
  • Play with small amounts to get a "feel" for how things work
I'd say those have been the most help to me personally.

Pesty

Original Poster:

42,655 posts

255 months

Saturday 16th June 2018
quotequote all
croyde said:
Pesty said:
I’m wondering that

I was looking at this. Just down the road

http://www.rightmove.co.uk/property-for-sale/prope...

I can stretch to 80 cash just wanted to have a little buffer in the bank for toys and issues
F me!! £80k for a house. I know it's oop North but what else is wrong with it biggrin

I doubt that'd buy me a parking space round here. The tiny 1.5 bed flat I'm renting is about £600k to buy in a not brilliant area of SW London.
Nothing well...
It’s a sty area of Doncaster so double sty or st squared however they are doing lots of new builds and bringing the area up a bit. Similar has happened in villages nearby it’s old pit council house area. That one just looked in reasonable nick. I walk the dogs on the moors right behind there so I might take a look.

Hmm prices have been up and down.

Phooey

12,574 posts

168 months

Saturday 16th June 2018
quotequote all
Property is cheap in Doncaster. Where you buy doesn't have to be local but maybe have a look at commercial. Something like this (previously let at 13k pa) - http://www.rightmove.co.uk/commercial-property-for...

eta ^^^ bit out of date that advert but you get the drift

audidoody

8,595 posts

255 months

Saturday 16th June 2018
quotequote all
I've done BTL for 10 years.

Would I do it again? NO!!!

1. Not a liquid asset
2. Tenants not paying
3. Tenants trashing the place
4. Tenants thinking they're renting a hotel ('we need new light bulbs'
5. Tenants paying late
6. Repairs to boiler
7. Repairs to plumbing
6. Repairs to leaking pipes
7. Repairs appliances
8. Tax to buy (stamp duty)
9. Tax while you rent
8. Tax when you get out (capital gains)
10.Fees (agent, accountant etc)



Oh. Did I mention tenants?

Edited by audidoody on Saturday 16th June 21:21