Does anyone on here invest, or has invested, in property?

Freetrade Chat 🔥
#1

I’m in a bit of a predicament! But I suppose it’s a good one, so I’m looking for advice.

I’ve sold my house and have pulled out a decent portion of money. Now it’s what to invest that money into…

I can continue with my Stocks and Shares ISA. Well diversified, fee free, no capital gains tax and can have access to the money any time any place.

But I have now found a property, 10k below market value that will yield me around 9%. Now I know that’s in the perfect ideal world, where tenants pay on time, no damages etc

I just want to know what the better all round investment model will be, I’m self employed so the ultimate goal is cash flow and passive income. Any other info needed just ask and I’ll try my best to answer.

2 Likes
#2

I have no experience with this but I have family that has a rental property and the first thing that comes to mind really is before the decision if it’s a good investment or not is do you want to deal with the different issues which come with having a rental property?

If it was me I would move ahead with it on the assumption that this stops being just an investment but has to be treated properly like a business (which sounds like you’d be perfectly capable of doing already being self employed), and that it being the first time into this industry (considering it as a business) that there may be mistakes along the way.

If you’ve put in the work and the numbers suggest there’s money to be made and you want to do it I’d go for it.

2 Likes
#3

I’m just trying to weigh everything up. And tbh I keep coming back to Stocks because it’s what I know and already have experience in.

Like Infant Investors I can diversify through REIT’s, alongside my other index’s and stock picks.

I just get so many conflicting arguments :smile:

3 Likes
#4

What you can’t really get through RIETs is the leverage. A small amount will get you a decently sized building. The difference is it’s yours and you need to put the work in.

I don’t think the decision primarily comes down to analysis. I do think it first comes down to the simple question of do you want to manage your own properties? If the answer is yes then get educated and then do it. Why not? You only have one life, and it’s not like your putting your eggs in one basket.

If the answer if no on the other hand, then it doesn’t matter if it would be a good investment or not as you don’t want to deal with having physical property and the work that comes with it.

1 Like
#5

Why have you sold your house, don’t you now need somewhere to live? You need to understand the stamp duty implications of buying a property that won’t be your main residence. (Maybe make it your main residence for a period of time)

9% yield is very good for property. But you need to consider the chances of capital appreciation.

1 Like
#6

I invested in some through Property Moose and regret that.

I also have some shares in BCPT.

Not that this really applies to your situation.

#7
#8

I managed to buy my current property below market value Han. I’ve done a small Refurb and in 2 years have made 22% on it. Instead of having all my capital tied up in one property I want to pull that out and put it to work for me. I’m currently self employed, so outwith my wage I don’t have a secondary income stream, nor do I get holiday or sick pay. It’s all circumstances, but the goal is to produce a passive cash flow to supplement my current income.

The property I’m looking at buying is only £60,000 so the Second property stamp duty is £2,400. And I’ll be able to buy that property 10k below market value.

But at the same time, with the money I’m pulling out I can max out my Freetrade ISA over the next two years (£40,000), and not have to touch any of my own money in that time.

So much to weigh up as you can see :smile:

#9

There is a lot to consider, the tax implications being the main one as property is difficult to hold in an ISA.

You can look at REITs or, if you’re like me, you don’t like REITs then look at a company called Grainger - essentially a build to rent property developer.

Buy to Let is certainly not as profitable as it once was and all political parties have once again targeted it as a source of potential income

1 Like
#11

I had shares in 4 properties through Property Moose, which I bought expecting to earn some income from. Last year, these were converted into shares in a company called ‘UK Diversified Property PLC’, which I believe represents all of Property Moose’s previous portfolio.

No income has been paid to shareholders since this happened.

They are aiming to list this company on the stock exchange, but I’m not too sure what the valuation will be.

Thankfully, I only invested £100 total.

1 Like
#12

I’ve invested in one project on reinvest24 7.45% yield and 7.3% estimated capital growth. I’m doing this as a trial to see if it’s worth putting more money in

Edit: This is equity crowdfunding. The way it works is shares are €1 so you actually own it as opposed to regular P2P or P2B where you own the debt obligation. Hence the capital growth

image
image640×1136 801 KB

1 Like
#13

Out of curiosity if you don’t mind sharing could you share the considerations that made you decide to stay away from REITs?

1 Like
#14

I don’t mind at all. Simply put I don’t like that REITs are obligated to pay out the majority of their income to shareholders.

Whilst I agree it is very useful for those seeking a regular and steady income. In most cases I feel that most property companies would generate higher returns on capital by retaining rather than distributing. As an example using their extensive balance sheet to acquire new properties.

I have nothing against REITs at all, I think they’re great for those seeking income but they just don’t meet my personal requirements.

4 Likes
#15

If you can’t be bothered dealing with tenants that can be outsourced ( for a %age ) to an agency. Obvious question - why is it 10k below market value?

#16

Value in current market condition is £70,000 and I’ve agreed the sale price of £60,000

#17

Please consider that although many deem rent from actual properties as ‘passive income’, unless you have an agency to fully manage the property, you will be responsible for getting tenants in and out, collecting rent, registering their deposit, sorting out repairs etc, so it can be more active than passive.

Don’t let that put you off though, just go in with your eyes open. That yield of 9% is a pretty good one.

#18

Why…in need of an upgrade, new kitchen, bathroom, and there was a shooting on the street 5 months ago so I think there’s been fear around. I’ve stayed here for 30 years and we’ve never seen that before, and the family involved doesn’t live on the street. Just a complete freak incident.

#19

Lucky you - I’ve got a couple of grand stuck in what used to be Property Moose, now UK Diversified Property. No idea if I’ll get the money back so I’ve written it off as a bad loss.

#20

Also worth noting thats its not an all or nothing. You can have a letting agent handle the publication of the rental, and finding a renter, handle the deport etc. then hand off to you when a client is found.

1 Like
#21

Alternatively go for the fully managed - should be about 10% ( which you can write off as a business expense anyway ).