70k to invest, buy to let?

[joyless lobotomised parrot]

NRS said:

I don't believe annuities can drop in value (unless interest is below inflation)?

Not sure the term "value" can really be applied to annuities. After all, you can't sell or swop them or even return them back to the supplier. Harder to get rid of than a pregnant cat.

Actually there is REAL value in an annuity. To the supplier. They get your money. For nothing. You get a very small portion of it back for a while. Which, of course, is paid from the profit they make by using the money you handed to them in the first place.

However, if you were told when you were being sold the pension plan that after 12 years of contributing the plan would be worth more or less the sum total of your contributions would you buy it?

And if you were told that the annuity you were being forced to buy with the accumulated fund of 12 years contributions would provide enough to buy 2 or 3 bottles of wine a month (which is not really anyone's dream of an income in retirement) would you bother getting involved in the first place?

The op's question was should he invest his hard earned £70k in btl? There is a horrendous amount of nonsense spouted about btl on Dadsnet but assuming he's interested in alternatives, "investing" in an annuity with his £70k would, imo (and based on the experience of owning 2 for 16 years) provide very little in the way of satisfactory financial returns with a certainty of losing 100% of the original "investment" (or 'purchase price' if buying an annuity isn't considered to be "investment" at all).

(People who sell these awful things will, of course, vehemently disagree. But have they actually bought one themselves? Hmmmm.)

Edited by joyless lobotomised parrot on Saturday 23 June 11:45

[sidicks]

joyless lobotomised parrot said:

Not sure the term "value" can really be applied to annuities. After all, you can't sell or swop them or even return them back to the supplier. Harder to get rid of than a pregnant cat.

However, if you were told when you were being sold the pension plan that after 12 years of contributing the plan would be worth more or less the sum total of your contributions would you buy it?

Still struggling to understand the difference between an investment wrapper and an underlying investment strategy? Really, you should take your own advice and not comment on things you demonstrably don't understand. It just makes you look (even more) stupid.

Investing in risky assets has market risk. Surely anyone with a basic education would understand this?

joyless lobotomised parrot said:

And if you were told that the annuity you were being forced to buy with the accumulated fund of 12 years contributions would provide enough to buy 2 or 3 bottles of wine a month (which is not really anyone's dream of an income in retirement) would you bother getting involved in the first place?

As above.

joyless lobotomised parrot said:

The op's question was should he invest his hard earned £70k in btl? There is a horrendous amount of nonsense spouted about btl on Dadsnet but assuming he's interested in alternatives, "investing" in an annuity with his £70k would, imo (and based on the experience of owning 2 for 16 years) provide very little in the way of satisfactory financial returns with a certainty of losing 100% of the original "investment" (or 'purchase price' if buying an annuity isn't considered to be "investment" at all).

Still don't understand how annuities work? You really should stop talking about them!

[98elise]

joyless lobotomised parrot said:

98elise said:

joyless lobotomised parrot said:

BarryGibb said:

Groak, was one of your top rants until this point, where it turned into pish.

Remind me what the current rate for one of Sid's index-linked annuities is per £100k for a 65 year old male non-smoker

I've been heavily investing in my SIPP and and ISA's over the past few years (maxing out both). The returns from my global funds have been brilliant. 20-30% gains this year alone and very very tax efficient.

I have similar money tied up in BTL and it's returning me 7% gross, so before repairs etc. I'm taxed on every penny I make, and will be taxed when I sell. When Mr Corbyn is PM I expect to be taxed even more (or shot)

If I was the OP my cash would be in S&S isas, invested in something like Lindsell Train Global Equity

Wow!! 20-30%!! You are definitely The Daddy!!

My s&s ISA (maxed like yours) has done 5.13% gross and 4.16% inc charges . Deffo going to have to have a word with GingeR about this!

Your btl yield's crap tho. 7%? Something's not right there.

btw, what IS the industry average for that annuity I asked about? 3%? 2?

Why is 7% crap. Countrywide yields as about 4-5%. I know buy property most people should shy away from, but that's a very narrow market. Happy to be educated on how I can get better returns in my neck of the woods (south east)

Not sure what point your trying to make about the funds? Its a fund manager doing the investing so I'm not claiming to be the financial genius. Are you saying 20-30% return is low? Seems pretty good from where I'm sitting especially when you consider the massive tax advantages of SIPP or ISA's.

I've no idea about the annuities. I've not mentioned them nor am I interested in them.

[Countdown]

DonkeyApple said:

And that’s really the nub of it. Do you like the idea of welcoming and absolute turd muncher into your life in exchange for a few quid a month when you could just feed the money into some global trackers and know that you won’t be getting a call at 2am from some semi retarded fktard about a bulb having blown. Because the very harsh reality about owning low end BTL is that you are paying money to enter land and you will be making yourself one of their carers.

That's a very good summary

The holy grail is finding a high quality tenant (and they do exist out there) and then incentivising them to stay by offering them lower-than-market rate rents. Not all tenants are scrotes and it's worthwhile vetting them before signing them up and then making every effort to keep them.

[DonkeyApple]

Countdown said:

That's a very good summary

The holy grail is finding a high quality tenant (and they do exist out there) and then incentivising them to stay by offering them lower-than-market rate rents. Not all tenants are scrotes and it's worthwhile vetting them before signing them up and then making every effort to keep them.

Exactly. And even Groak confesses to a 2% serious problem rate per rental cycle (and didn’t he once mention that he used his less than salubriousfriends to help maintain that level?), which obviously means you have a rather high chance of getting one if you’re cycling tenents every few years. Gross yields are all very interesting but it’s the true net yield that BTL investors aren’t at such a rush to discuss.

[Jockman]

DonkeyApple said:

.... Gross yields are all very interesting but it’s the true net yield that BTL investors aren’t at such a rush to discuss.

Some may not be able to calculate them. Headline figures are more attractive at dinner parties.

[Badda]

DonkeyApple said:

Countdown said:

That's a very good summary

The holy grail is finding a high quality tenant (and they do exist out there) and then incentivising them to stay by offering them lower-than-market rate rents. Not all tenants are scrotes and it's worthwhile vetting them before signing them up and then making every effort to keep them.

Exactly. And even Groak confesses to a 2% serious problem rate per rental cycle (and didn’t he once mention that he used his less than salubriousfriends to help maintain that level?), which obviously means you have a rather high chance of getting one if you’re cycling tenents every few years. Gross yields are all very interesting but it’s the true net yield that BTL investors aren’t at such a rush to discuss.

It’s no different to other investments though. People talk headline figures and don’t mention fund charges, platform charges and trading costs. That guy Jon on here got in hot water over it as he was talking in very broad terms and not entirely open!

Gross in fine, if we’re honest about that’s what it is.

[Jockman]

Lol. Fair point badda.

[joyless lobotomised parrot]

As a matter of interest, how are we calculating this yield? Even using what we in the trade call voodoo-yield (gross rent as a percentage of purchase price) are you talking achievable rent against initial purchase costs, or against current value ? Or what?

[joyless lobotomised parrot]

DonkeyApple said:

Countdown said:

That's a very good summary

The holy grail is finding a high quality tenant (and they do exist out there) and then incentivising them to stay by offering them lower-than-market rate rents. Not all tenants are scrotes and it's worthwhile vetting them before signing them up and then making every effort to keep them.

Exactly. And even Groak confesses to a 2% serious problem rate per rental cycle (and didn’t he once mention that he used his less than salubriousfriends to help maintain that level?), which obviously means you have a rather high chance of getting one if you’re cycling tenents every few years. Gross yields are all very interesting but it’s the true net yield that BTL investors aren’t at such a rush to discuss.

Countdown: It really isn't a "very good summary". It's a load of pish that needlessly denigrates lower earners and the less able and shows massive social naivety, a lack of class, and a vast ignorance of lower end btl.

And the holy grail really isn't finding a "high quality tenant", that's just another way to beat yourself up with unnecessary stress. There IS an 'ideal' in letting, but it ain't searching for perfect tenants. It's accepting that what you really really need is 1)a decent quality of tenant who 2) remains for a decent period of time and who 3)pays a decent level of rent. If you get those 3 it's job-jobbed.

Braying Ass: You're gonna have to learn something if you're going to bibble drivel about me. As the forum evolves I change identity to evolve with it. Currently it's 'JLP'. Because I almost exclusively post in the Dadsnet (non-motoring) sections of the chatroom, and a JLP is what feels most comfortable and most at home in those sections and threads just now. Prior to that it was 'drainbrain'. Prior to that it was 'groak' (small 'g' if you're going to use it). And prior to that - which would be for some years before you arrived - it was 'selmahoos'. The one that's clearly made the deepest impression on you is 'groak'. But if you want to impress with your knowledge of my past PH history the one you want to bone up on is 'selmahoos'. From about 2005 or 2006 - can't really remember which.

The other thing you might oblige us by doing before you spout any more crap about 'tenants' is learn how to spell the word. 'Tennents' is a well known Glasgow brewery. Your word 'tenents' is an imaginary word you have made up. And while that amply suits your comments about them, the word that you are struggling for is 'tenAnts'. They have tenAncies; and tenAnts' rights and so forth....

Edited by joyless lobotomised parrot on Sunday 24th June 01:29

[M3333]

If you havent used your isa allowance have a look at www.fundsmith.co.uk

It has done really well for me and many others. Its very easy to set up. No guarantees of course but i was in a simular position to OP and its a minefield!

[TFP]

joyless lobotomised parrot said:

Braying Ass: You're gonna have to learn something if you're going to bibble drivel about me. As the forum evolves I change identity to evolve with it. Currently it's 'JLP'. Because I almost exclusively post in the Dadsnet (non-motoring) sections of the chatroom, and a JLP is what feels most comfortable and most at home in those sections and threads just now. Prior to that it was 'drainbrain'. Prior to that it was 'groak' (small 'g' if you're going to use it). And prior to that - which would be for some years before you arrived - it was 'selmahoos'. The one that's clearly made the deepest impression on you is 'groak'. But if you want to impress with your knowledge of my past PH history the one you want to bone up on is 'selmahoos'. From about 2005 or 2006 - can't really remember which.

Edited by joyless lobotomised parrot on Sunday 24th June 01:29

Utter, utter pish and you well know it.

You keep other accounts open well in advance. You are forced in to phoenixing when mods shut you down after you have overstepped the mark.

It’s all there as a matter of record.

Thanks for ruining another thread making it all about you and annuities. So much for evolving !

[DonkeyApple]

joyless lobotomised parrot said:

And the holy grail really isn't finding a "high quality tenant", that's just another way to beat yourself up with unnecessary stress. There IS an 'ideal' in letting, but it ain't searching for perfect tenants. It's accepting that what you really really need is 1)a decent quality of tenant who 2) remains for a decent period of time and who 3)pays a decent level of rent. If you get those 3 it's job-jobbed.

There you go again, wholly contradicting yourself within the same post because you cannot bring yourself to directly agree because of your prejudices.

As per usual you end up agreeing with my view but trying to argue that you don’t because you don’t like who I am and you think you’re different.

[Countdown]

joyless lobotomised parrot said:

Countdown: It really isn't a "very good summary". It's a load of pish that needlessly denigrates lower earners and the less able and shows massive social naivety, a lack of class, and a vast ignorance of lower end btl.

I’ve had BTL properties for nearly 20 years. What DA said struck a lot of chords with me. YMMV.

joyless lobotomised parrot said:

And the holy grail really isn't finding a "high quality tenant", that's just another way to beat yourself up with unnecessary stress. There IS an 'ideal' in letting, but it ain't searching for perfect tenants. It's accepting that what you really really need is 1)a decent quality of tenant who 2) remains for a decent period of time and who 3)pays a decent level of rent. If you get those 3 it's job-jobbed.

I’m somewhat confused. To me a “high quality tenant” IS somebody who is /decent/stays for a decent length of time/pays a decent level of rent. However when you sign them up you have to put in a decent amount of legwork to check that they ARE decent. If you don’t then you increase the risk of renting to a scrote.

BTLs can be a good investment. It’s just good to remember that, as with everything else in life, the amount of yield is proportional to the amount of risk and effort you up into it.

ETA There’s a lot less stress in ensuring you check tenants BEFORE you sign them up than having to issue Section 8 or Section 21 letters.

[BarryGibb]

joyless lobotomised parrot said:

DonkeyApple said:

Countdown said:

That's a very good summary

The holy grail is finding a high quality tenant (and they do exist out there) and then incentivising them to stay by offering them lower-than-market rate rents. Not all tenants are scrotes and it's worthwhile vetting them before signing them up and then making every effort to keep them.

Exactly. And even Groak confesses to a 2% serious problem rate per rental cycle (and didn’t he once mention that he used his less than salubriousfriends to help maintain that level?), which obviously means you have a rather high chance of getting one if you’re cycling tenents every few years. Gross yields are all very interesting but it’s the true net yield that BTL investors aren’t at such a rush to discuss.

Countdown: It really isn't a "very good summary". It's a load of pish that needlessly denigrates lower earners and the less able and shows massive social naivety, a lack of class, and a vast ignorance of lower end btl.

And the holy grail really isn't finding a "high quality tenant", that's just another way to beat yourself up with unnecessary stress. There IS an 'ideal' in letting, but it ain't searching for perfect tenants. It's accepting that what you really really need is 1)a decent quality of tenant who 2) remains for a decent period of time and who 3)pays a decent level of rent. If you get those 3 it's job-jobbed.

Braying Ass: You're gonna have to learn something if you're going to bibble drivel about me. As the forum evolves I change identity to evolve with it. Currently it's 'JLP'. Because I almost exclusively post in the Dadsnet (non-motoring) sections of the chatroom, and a JLP is what feels most comfortable and most at home in those sections and threads just now. Prior to that it was 'drainbrain'. Prior to that it was 'groak' (small 'g' if you're going to use it). And prior to that - which would be for some years before you arrived - it was 'selmahoos'. The one that's clearly made the deepest impression on you is 'groak'. But if you want to impress with your knowledge of my past PH history the one you want to bone up on is 'selmahoos'. From about 2005 or 2006 - can't really remember which.

The other thing you might oblige us by doing before you spout any more crap about 'tenants' is learn how to spell the word. 'Tennents' is a well known Glasgow brewery. Your word 'tenents' is an imaginary word you have made up. And while that amply suits your comments about them, the word that you are struggling for is 'tenAnts'. They have tenAncies; and tenAnts' rights and so forth....

Edited by joyless lobotomised parrot on Sunday 24th June 01:29

I'd forgotten about selmahoos. Back in the days of endless debate around how far house prices would fall!

[joyless lobotomised parrot]

BarryGibb said:

I'd forgotten about selmahoos. Back in the days of endless debate around how far house prices would fall!

Lol, me too! A blast from a past when Tonker had hair and the 'price fall' thread was THE property discussion thread, including on btl.

Have to say that recalling some of my posts from then I must be some kind of prophet or seer Remember Noel Watson? The eternal property pessimist, but lots of good input. Driven out by the newly arriving first wave of weaselly cheap gang-up bullies and he never returned. Shame. That's when 'selmahoos' morphed into 'groak'. Bullies didn't really like groak. groak (in "reality" The Very Reverend Ebeneezer Groak to give him full title) was an extreme Rangers-supporting orangeman and fundamentalist presbyterian minister who actually DID get a ban for - wait for it - "biggotry". Obviously the banning mod didn't quite get the groak persona, but has hopefully subsequently discovered that 'bigot' only has one 'g'. Dadsnet (fully understandably like most people and institutions) has never really understood that peculiar Glasgow "biggotry" where an erstwhile respectable Catholic can stand on the terraces of Parkhead screaming a tirade of foul mouthed obscenity at the invading Protestant hordes for 90 minutes and then pop off home to dinner with the protestant he's been married to for a decade with whom he discusses the kids education at the Good Jewish School up the road before he pops down the pub for a 'swally' with his mates of mixed faith whilst they continue a toned-down version of the afternoon's diatribe.

But sadly selmahoos is no more. He survives in Dadsnet as a JLP (see TFP's post above). And there's little chance he'll return.

Equally sadly the 'House Price' thread has also morphed into some kind of willy-waving bore about which distinctly unspecial boring S-E 'dungeon' is more overpriced than the next. In fairness tho it always was one of those threads which was more relevant when it started. Vol. 1's the best. (imo of course).

[joyless lobotomised parrot]

Countdown said:

I’m somewhat confused. To me a “high quality tenant” IS somebody who is /decent/stays for a decent length of time/pays a decent level of rent. However when you sign them up you have to put in a decent amount of legwork to check that they ARE decent. If you don’t then you increase the risk of renting to a scrote.

BTLs can be a good investment. It’s just good to remember that, as with everything else in life, the amount of yield is proportional to the amount of risk and effort you up into it.

ETA There’s a lot less stress in ensuring you check tenants BEFORE you sign them up than having to issue Section 8 or Section 21 letters.

O be not confused! The fault is mine. I thought the mention of "holy grail" tenant referred to that (very) occasional exception where apart from all conditions of tenancy being fully and perfectly adhered to, the property is genuinely given back better than when they entered it, and after a lengthy stay they depart to whereabouts unknown leaving behind a large deposit they never bother to request returned. To my certain knowledge I have had ONE of these in a residential and ONE in commercial as well. Funnily enough they were both in 'lower end' properties.

However I do not believe for one moment that your 20 year experience leaves you in agreement with the Braying Donkey about what's universal/common/normal at lower end btl. You've even hinted at it yourself by watering it down to "not all lower-enders are scrotes".

Well that must be of at least some reassurance to those readers of the thread who are themselves renting at the lower end.

Some of them will be youngsters in their first independent dwellings after leaving home. Or people who need to live in areas where average rents are absurdly high. Or students who really aren't the troublesome idiots they once were and often come with 'daddy the guarantor'. Or (usually young) Poles and other migrants taking advantage of FoM. Or refugees/asylum seekers. Or lower waged. Or oldish people without much retirement income who need Housing Benefit level accommodation. Or people who can't find regular well paid employment for 100 reasons and so can't afford any more than basic accommodation costs.

Now in MY opinion that covers almost all of the 'lower end btl' market. And, sorry, Im afraid I don't believe that your experience is any different.

So where ARE the "turd-munching retards" - the destructive hapless and seriously antisocial very small minority of the community who really haven't the basic skill set to live indoors in normal housing of any kind.

Some are living on the streets (including a healthy number who really shouldn't be living in a doorway and who should (and often are) introduced back into normal dwelling via care authorities etc). Some are in Homeless Units because private accommodation can't contain them. And probably the biggest majority of these 'worst of the worst' are clustered into ghettoised sink council estates where only the stupidest chinless Rupert would try to buy to let anything. There are also areas - usually around or near major cities - where the housing or the area has deteriorated to the extent that no-one normal would want to live in it. And anyone who does own one there has the choice of renting it via the state system to the type of person who can't find a chinless Rupert or anyone else stupid enough to give them the keys to anything decent and habitable. That type of property/area can actually be an astute place to buy into, but only to lock and leave and sit on till its inevitable restoration or compulsory purchase.

But lower-end btl some kind of chaotic 'mhongolland' festooned with 'turd-munching retards' ? PISH! Plain, simple pish.

[Countdown]

joyless lobotomised parrot said:

O be not confused! The fault is mine. I thought the mention of "holy grail" tenant referred to that (very) occasional exception where apart from all conditions of tenancy being fully and perfectly adhered to, the property is genuinely given back better than when they entered it, and after a lengthy stay they depart to whereabouts unknown leaving behind a large deposit they never bother to request returned. To my certain knowledge I have had ONE of these in a residential and ONE in commercial as well. Funnily enough they were both in 'lower end' properties.

However I do not believe for one moment that your 20 year experience leaves you in agreement with the Braying Donkey about what's universal/common/normal at lower end btl. You've even hinted at it yourself by watering it down to "not all lower-enders are scrotes".

Well if you think that's "watering it down" then fine. In my experience it's quite common to come across tenants at the lower end of the market who are scrotes. I speak as a BTL landlord and also somebody who has spent a significant amount of time working in Housing Associations / Council Housing.

From an investment point of view you only need to have 3/4 weeks rent unpaid in any one year before your yield is effectively zero. And bear in mind if you are trying to evict somebody then the process takes IRO 8 weeks, and then there's the time to repair the property and the cost. In short you only need one or two tenants to behave like scrotes before you start thinking "sod this for a game of soldiers FTSE tracker here I come".

[bitchstewie]

M3333 said:

If you havent used your isa allowance have a look at www.fundsmith.co.uk

It has done really well for me and many others. Its very easy to set up. No guarantees of course but i was in a simular position to OP and its a minefield!

I have a third of my ISA allocation in Fundsmith and top up every month.

Even if you don't go with Fundsmith I'd advise anyone considering equities to watch the Fundsmith AGMs or basically anything from Terry Smith.

Seems very straight talking and has a good track record and says things in terms that make sense to idiots like me.

[BarryGibb]

bhstewie said:

M3333 said:

If you havent used your isa allowance have a look at www.fundsmith.co.uk

It has done really well for me and many others. Its very easy to set up. No guarantees of course but i was in a simular position to OP and its a minefield!

I have a third of my ISA allocation in Fundsmith and top up every month.

Even if you don't go with Fundsmith I'd advise anyone considering equities to watch the Fundsmith AGMs or basically anything from Terry Smith.

Seems very straight talking and has a good track record and says things in terms that make sense to idiots like me.

A good track record when large cap equities aren't doing spectacularly well?