Sabi Star

But shipping is doing badly - especially containers.

sicklyman

Most of Johnnyboy's list is tax deductible... and some of it pure speculation or contradictory e.g. You won't pay CGT and also lose on your capital investment if you sell with negative equity.

BTL is certainly not as attractive as it once was even though many assume it still is a guaranteed way to make a profit. As with all investments, you can win or lose and careful research usually increases your chances of the former.

If I were you, I wouldn't get go BTL. I'd save up and pay cash. This gives you time to research, time to watch the market and time to back out of this decision if either of those makes you think twice.

I highly recommend you get onto and read as much of the landlordzone forums as you can.

kostik3000

BTL still could be a good option if done right and deal is done on purchase.

1 of my BTL in London is still making over 20% return and even with new tax would be making 14% or so. No reason to sell it, however sometimes it takes a bit more time when I want it to take.

Victor Meldrew

Thanks everybody for all of your input and apologies for delayed reply!

Lots of food for thought. Need to balance out the positives and negatives buying with mortgage now, or buying lower value house for cash in 12 months time

Meow I have replied to your PM, thanks.

Millhouse

When did you buy it?

Either you are a slum landlord, or basing your return on the original entry price and not the current market value (or factoring in capital gains not yet realised)

I get 5% yields max in London. This excludes the occasional refresh.

While they have done exactly as per my original financial models on a cash flow perspective (and have given nice capital gains that I did not anticipate) I would still stay out of it right now (in fact I pulled out of a purchase a month ago on a deal that was agreed almost 8 months ago - tax policy, regulations and a soft market). We have even noticed a reduced tenant demand and it's not been easy to push up rents this year.

It's still a great long-term business, but one right now where you have time to sit and watch from the sidelines to see how policy and the market changes.

Johnnyboy11

Factor in GBP devaluation against the USD and EUR since the day of Brexit and you have made a signifiant loss on your investment in real terms.

Conversely, the American S&P500 share index is up 23% over the same period, UK FTSE100 index is up over 31% and a typical low to mid-risk investment fund like the Vanguard Life Strategy 60% Equities (VLS60) is up 20%.

I still don't think investing in the UK BTL market makes sense. Far too risky and a bag of hassle, for little or no return. But each to their own. You could open a VLS60 in 15 minutes online, then sit back and relax for the long term.

Millhouse

Kind of depends on your long term fuctional currency if you have made a real loss really.

scrubbedexpat141

In the last year and only 4% the year before that.

Johnnyboy11

And up 65% over the past 5 years, which is nice.

scrubbedexpat141

We're reading different charts then.
Annual return 14.05% 6.96% 8.89% 4.13% 19.69%
I'm not saying it's not impressive but too selective to use one successful fund to write off BTL as a whole.

Sabi Star

There was n article I think in Telegraph recently listing top 10 places for BTL - all were in the north - Sheffield was listed number one.

Millhouse

Not sure he did.

My only issue with the funds is often the lack of leverage. But you can find banks to leverage it for you.

BTL was a great business until about a year ago. If the tax policy changes (which I think it will) it will be great again. It also requires a lot of work.

I have two and they do require a fair bit of attention. Whereas my leveraged funds yield more and don't require anywork at all and are sufficiently liquid if I need to sell quickly.

A bit of everything is what you want.

scrubbedexpat141

Ah, the pinnacle....Moderation.

Meow

We call it diversification.

scrubbedexpat141

I like it. I've just started skimming my profits so fancy a fund or similar to pump the profits into.

There's a local UAE based option too that I've been told about.

Problem I have is finding a sharedealing account. My Lloyds one has been restricted because they finally worked out I'm overseas. Either have to tell porkies and set one up with another firm or find an offshore / non-resident account.