cheap, easyish mortgages give you capital leverage as long as prices keep going up
housing will be in short supply for years which might mean capital loss is unlikely
might be an ok diversifier if everything else of yours is in stocks
consider furnished holiday let instead of BTL if property is in a nice location: better income and tax treatment, otoh more work
But:
hassle and ongoing cost: rental voids and maintenance can be more impactful than you expect (dealing with tenants or giving a mgmt company 10% plus vat)
management companies don’t always do that much for their 10% - you might end up feeling like you still have the hassle
transaction costs (stamp duty etc) are big
tax situation in UK not particularly BTL-friendly any more
hard to be diversified when investing in bricks and mortar (but maybe things like bricklane.com etc help with that)
liquidity is very low, if you ever need to sell in a hurry
diversified, liquid alternatives with low transaction costs exist on stock markets: REITs etc
My own experience is that income yield from BTL drops a lot as you factor in maintenance costs, hassle, voids etc. So would probably lean toward the simplicity of stocks, or possibly the higher income of holiday lets.
I’ve been working my way through the Property Hub podcasts with Rob and Rob and they are great
I’ve got my strategy outlined now and will first off be utilising the “consent to let” I have on my current mortgage to get me onto the property investing market.
With VWRL or another world tracker, when it breaks down the allocation and says ‘Real Estate 6%’, does this mean it is unnecessary to also purchase a property etf or commercial property reit, seeing as you already have a percentage allocated to real estate in your main etf?
I have a second property that is rented out. But I only have it because I could get a mortgage at 1.5%. I owned my own property outright so borrowed of that to buy in full. That made things easy. But if I had cash to buy a second house outright I would never do it, investing is a far easier way to make a comparable % off. If you can turn our hand to all sorts of construction tasks and have the contacts etc it can work, but I don’t.
I would say it is up to your own strategy. I personally target a 10% allocation in my portfolio for real estate. If your target is 6% and hold only WVRL(which I doubt), than you are good.
I find my buy to let’s more profitable than my stocks and shares. But then, I have no idea what I am doing with my shares ha. Also the last few years have been good with equity growth, mortgage rates etc. I’m sure that won’t always be the case.
Property has been a good investment but the government have signalled that they have no intest in supporting this sector and are actively changing policy to make this less and less appealing - this is the opposite of crowdfunding (EIS/SEIS) & ISA / SIPP.
I think as I have only been buying property for the last two years. My margin was already smaller than previous exciting landlords. All three of my properties are energy rated C ready for the expecting changes. I still find them profitable. And my tax is mitgagted using a 99-1% split with my partner which does make a big difference currently.
I have my propertys on a 99-1% split. With land registry and from an income/tax return point of view. Meaning that the lower salary earner has the bigger shares of the buy to let’s. Reducing the higher earners tax costs too.
All mortgaged interest only, 25% deposit etc.
I’ve been in the ‘game’ longer but only ever been able to claim the income as mine. Next year I’ll be able to sort out a spousal arrangement so very keen to know more about a 99%\1%
This article suggested the best I could get was 50/50. What am I missing? Any help would be greatly appreciated
