Updating post from Reddit.
I have £40K in savings and have been wanting to get a BTL property.
With current rates including mortgage, buyers fees etc is it worth it?
It is inheritance from my parents and I have always wanted to get into property but lacking the guidance to know whether to do so.
I see lots of ‘instagrammers’ selling the dream but I am a bit sceptical.
Many thanks
Rule of thumb: Don’t Listen to anyone on social media who is selling a course.
Thank you, think the course is about £795, so v sceptical but they seem to have a lot of properties - HMO’s etc
Mate please don’t take the course, anyone can make it look like they have lots of properties
Won’t do - thanks for the tip
Personally if i was in your shoes id stick it in a stocks and shares ISA split into 2 years so its tax free.
Thank you for your advice
I second this, you can expect your money to double every 7 - 10 years.
Thank you
I've just sold up one and planning to sell up the other as soon as the tenants give notice. Was getting about 4 to 5% yield each year, but a fair bit of hassle for that even with fully managed let. Also just loads of risk, not had it with tenants stop paying yet but it can happen and then long process to evict with the failing court system, or the boiler going and needing to replace a fairly expensive item.
And not expecting much capital gain in the next 10 years or so given the number of things being built around.
Where are you roughly located? 40k could be a good entry in certain parts of the country when house prices are lower
North west - Liverpool / Wirral way
My parents are currently selling up their portfolio not worth it anymore even without paying taxes.
Also you're not going to get much good property on the Wirral for £160k or less, going to be looking at Birkenhead etc (shivers)
Honestly it's completely about what you can get for what and then do the math. I've got one, just over a year now, couldn't see what all the negatives were about then I've debated getting another and realised I got very very lucky. You have to run the math on any scenario and see if it checks out. Fwiw mines a terraced house in Warrington so not a million miles away from where you're looking
*do the maths
*run the maths
BTL is not great for a range of reasons. High risk and low return and high hassle.
Buying to live in the place is still good in the uk because the capital gains are tax free. So upgrading where you live could make senses.
B2l around there could be a 2 bed terrace, circa 750ish a month income. but with rates it's not as attractive as several years ago.but don't do a course, sure it may tell you things but nothing the nrla can't offer if you join.
I looked at doing this. It didn't take long to figure out it was a pretty bad idea., and that was with buying somewhere outright, with no mortgage.
Plus as I understand matters, the renters reform bill will be passed in the next few months. After that, if you need to get your renter's to leave it will be almost impossible.
I had 140k. We parked 50K each into premium bonds to get what is currently seeming to be about a 3.8% annual return tax free, 20k in a cash ISA at about 4.8% then after the new tax year, 20k into a stocks and shares ISA, which is currently performing at about 7 to 8%. I'll transfer the cash ISA into a stocks and shares ISA too when it matures, and start decanting the premium bonds 20k at a time with each new tax year.
I needed to avoid paying too much tax as I earn enough to hit the 40% tax bracket. I already pay more into my pension via salary sacrifice to keep just below the 40% threshold: it makes sense for me, as I've only got about 12 years left to retirement.
Premium bonds only really work if you can max out the 50K allowance. Even then, it's all probability based, as you don't earn interest, only 'prizes' each month, of which the smallest is £25.
I've done it for 20 years, self-managed. Agents are useless and make tenants unhappy.
It's not easy money, it takes a lot of hard work. The absolute bottom line is, you are responsible for the health and safety of your tenants and you have to ensure they never come to any harm because you inadvertently forget to do one of the hundreds of checks you have to, to be compliant. The rules are there for a good reason.
Then there's tax. If you have another job as well, chances are you're going to be taxed at 40%. HMRC take the tax for the following year based on your profit so you always have to be ahead of the game and have to save in advance. Tax puts a serious dent on your income.
On the plus side, I enjoy creating a safe, comfortable place for people to live and I have great relations with my tenants because they tend not to move out.
I’m the same, been in BTL for nearly 30 years. And of course the returns are very good because I bought my properties at a fraction of their value today. But I wouldn’t buy now, gross returns little more than you can get on a risk free savings account, no prospect of significant capital growth, rents are at or near the maximum affordable levels. The good years for property are over and they are not coming back in the forseeable future.
And there's the whole EPC debacle.