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Post by martin44 on Jul 12, 2019 20:48:47 GMT
Thought it might form a counter discussion to p2p investment... personally i have made far better returns over the years, simply investing in property, ie: buy to let....or.... buy, do up and sell. Why i was drawn into this toxic investment area is finally dawning on me.. i really thought i could eclipse my property profits without actually doing much work... how wrong i was.
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hazellend
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Post by hazellend on Jul 12, 2019 20:56:44 GMT
Thought it might form a counter discussion to p2p investment... personally i have made far better returns over the years, simply investing in property, ie: buy to let....or.... buy, do up and sell. Why i was drawn into this toxic investment area is finally dawning on me.. i really thought i could eclipse my property profits without actually doing much work... how wrong i was. Property has been my best investment. By chance I bought a flat in London in 2005 and only lived in it for 1 year. Then rented it out till 2 years ago with no voids or issues. It was my only property. Buy price 298k, sold 484k, no tax to pay. Rental profit over the years about 50k. All profits put into stock market (yay) and P2P (meh!) I just got lucky though. I can’t see myself directly investing in property again unless there was a crash in prices in desirable properties with good yields.
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IFISAcava
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Post by IFISAcava on Jul 13, 2019 8:50:23 GMT
Thought it might form a counter discussion to p2p investment... personally i have made far better returns over the years, simply investing in property, ie: buy to let....or.... buy, do up and sell. Why i was drawn into this toxic investment area is finally dawning on me.. i really thought i could eclipse my property profits without actually doing much work... how wrong i was. Property has been my best investment. By chance I bought a flat in London in 2005 and only lived in it for 1 year. Then rented it out till 2 years ago with no voids or issues. It was my only property. Buy price 298k, sold 484k, no tax to pay. Rental profit over the years about 50k. All profits put into stock market (yay) and P2P (meh!) I just got lucky though. I can’t see myself directly investing in property again unless there was a crash in prices in desirable properties with good yields. Why no tax to pay if you only lived in it for a year? PRR would have run out well before you sold, no?
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hazellend
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Post by hazellend on Jul 13, 2019 9:11:58 GMT
Property has been my best investment. By chance I bought a flat in London in 2005 and only lived in it for 1 year. Then rented it out till 2 years ago with no voids or issues. It was my only property. Buy price 298k, sold 484k, no tax to pay. Rental profit over the years about 50k. All profits put into stock market (yay) and P2P (meh!) I just got lucky though. I can’t see myself directly investing in property again unless there was a crash in prices in desirable properties with good yields. Why no tax to pay if you only lived in it for a year? PRR would have run out well before you sold, no? I can’t remember the details, I paid my accountant and he sent it in my self assessment. There were other reliefs available which meant zero tax. May have been something called lettings relief?
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liso
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Post by liso on Jul 13, 2019 10:52:05 GMT
Thought it might form a counter discussion to p2p investment... personally i have made far better returns over the years, simply investing in property, ie: buy to let....or.... buy, do up and sell. Why i was drawn into this toxic investment area is finally dawning on me.. i really thought i could eclipse my property profits without actually doing much work... how wrong i was. Agreed. I have invested in both property and p2p over several years (property much longer) and my returns from property investment far exceed those from p2p. But it does require work. Trouble-free property investment is not as easy as is sometimes thought, and often requires more work than expected to run smoothly. Many investors have come to me when things have gone wrong, and almost always the problems have arisen due to insufficient care and attention to the property/the tenant. That said though, unlike p2p, the problems for property investors are usually visible, so easier to rectify!
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adrianc
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Post by adrianc on Jul 15, 2019 8:07:03 GMT
Two rental properties here. Both have been relatively trouble-free - short void on one, none on the other. Services charges rising on one. Annualised return - 4.3%. Not much capital growth, if any.
P2P annualised return - 5.7%
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IFISAcava
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Post by IFISAcava on Jul 15, 2019 10:10:18 GMT
Two rental properties here. Both have been relatively trouble-free - short void on one, none on the other. Services charges rising on one. Annualised return - 4.3%. Not much capital growth, if any. P2P annualised return - 5.7% but presumably the property is leveraged with a mortgage? That has always been how property gives such a high return to investors - 25% of the capital invested for 100% of the capital gain.
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adrianc
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Post by adrianc on Jul 15, 2019 10:11:59 GMT
Two rental properties here. Both have been relatively trouble-free - short void on one, none on the other. Services charges rising on one. Annualised return - 4.3%. Not much capital growth, if any. P2P annualised return - 5.7% but presumably the property is leveraged with a mortgage? That has always been how property gives such a high return to investors - 25% of the capital invested for 100% of the capital gain. No - not least because I'm nowhere near the SE... But leveraging applies to all investments, of course. B'sides the tax situation has changed for mortgage interest, so leveraged investment properties are now far less attractive.
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hazellend
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Post by hazellend on Jul 15, 2019 11:18:23 GMT
but presumably the property is leveraged with a mortgage? That has always been how property gives such a high return to investors - 25% of the capital invested for 100% of the capital gain. No - not least because I'm nowhere near the SE... But leveraging applies to all investments, of course. B'sides the tax situation has changed for mortgage interest, so leveraged investment properties are now far less attractive. And now with property partner introducing high fees retrospectively property is a no go for me. I’m looking to paring back my portfolio to equities and bonds/cash only. I’m getting really fed up with pretty much everything else. ABLrate is the only investment that has had a great run for me outside of equities. MT , I’ll tell you in a few months!
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IFISAcava
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Post by IFISAcava on Jul 15, 2019 11:20:35 GMT
but presumably the property is leveraged with a mortgage? That has always been how property gives such a high return to investors - 25% of the capital invested for 100% of the capital gain. No - not least because I'm nowhere near the SE... But leveraging applies to all investments, of course. B'sides the tax situation has changed for mortgage interest, so leveraged investment properties are now far less attractive. In theory - but it would be a brave person to borrow at 75% LTV against a stock market investment compared to a property - notwithstanding that no bank would loan the money, and even if they did the rates would be astronomical cf property lending. Taxation has changed (or more accurately is changing - full effects not yet implemented) for sure, but for several decades BTL investors have made hay while the sun shone (at the expense of non-property or capital owners - but such is rentier capitalism).
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IFISAcava
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Post by IFISAcava on Jul 15, 2019 11:26:04 GMT
No - not least because I'm nowhere near the SE... But leveraging applies to all investments, of course. B'sides the tax situation has changed for mortgage interest, so leveraged investment properties are now far less attractive. And now with property partner introducing high fees retrospectively property is a no go for me. I’m looking to paring back my portfolio to equities and bonds/cash only. I’m getting really fed up with pretty much everything else. ABLrate is the only investment that has had a great run for me outside of equities. MT , I’ll tell you in a few months! Yeah, the PP situation not good - quite a hike in fees. I've gradually sold almost 25% of my holdings at a modest capital gain, but the rest are a bit stuck now I suspect. Hopefully the eventual sale after 5 years will yield some useful returns, and the new fees can be offset against capital gains. World property index trackers probably a better way to go longer term.
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hazellend
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Post by hazellend on Jul 15, 2019 11:55:17 GMT
And now with property partner introducing high fees retrospectively property is a no go for me. I’m looking to paring back my portfolio to equities and bonds/cash only. I’m getting really fed up with pretty much everything else. ABLrate is the only investment that has had a great run for me outside of equities. MT , I’ll tell you in a few months! Yeah, the PP situation not good - quite a hike in fees. I've gradually sold almost 25% of my holdings at a modest capital gain, but the rest are a bit stuck now I suspect. Hopefully the eventual sale after 5 years will yield some useful returns, and the new fees can be offset against capital gains. World property index trackers probably a better way to go longer term. Agree. I don’t mind the volatility of equities at all. There is a lot less messing around.
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bigfoot12
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Post by bigfoot12 on Jul 15, 2019 11:55:58 GMT
No - not least because I'm nowhere near the SE... But leveraging applies to all investments, of course. B'sides the tax situation has changed for mortgage interest, so leveraged investment properties are now far less attractive. In theory - but it would be a brave person to borrow at 75% LTV against a stock market investment compared to a property - notwithstanding that no bank would loan the money, and even if they did the rates would be astronomical cf property lending. Taxation has changed (or more accurately is changing - full effects not yet implemented) for sure, but for several decades BTL investors have made hay while the sun shone (at the expense of non-property or capital owners - but such is rentier capitalism). Why do you assume that leverage is good for property investment and bad for other investments? Sure, you will probably have to mark to market most non property investments, but conversely most non-property investments are much more liquid, and whilst they might not force you to sell with negative equity good luck refinancing once the 5 year fix reverts to something unpleasant. Without putting any effort in rates are 3%+libor for me for S&S, with no fees, nor significant fee increases to the purchase price (double the size of the house you buy with 50% leverage and quite a few of your costs increase).
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IFISAcava
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Post by IFISAcava on Jul 15, 2019 12:39:09 GMT
In theory - but it would be a brave person to borrow at 75% LTV against a stock market investment compared to a property - notwithstanding that no bank would loan the money, and even if they did the rates would be astronomical cf property lending. Taxation has changed (or more accurately is changing - full effects not yet implemented) for sure, but for several decades BTL investors have made hay while the sun shone (at the expense of non-property or capital owners - but such is rentier capitalism). Why do you assume that leverage is good for property investment and bad for other investments? Sure, you will probably have to mark to market most non property investments, but conversely most non-property investments are much more liquid, and whilst they might not force you to sell with negative equity good luck refinancing once the 5 year fix reverts to something unpleasant. Without putting any effort in rates are 3%+libor for me for S&S, with no fees, nor significant fee increases to the purchase price (double the size of the house you buy with 50% leverage and quite a few of your costs increase). I am happy to be persuaded that borrowing money to invest on the stock market is a good thing to do. Perhaps you can do the maths for me? Let's start with what rate of interest can you borrow at to be secured against the share portfolio you intend to purchase with the lent money?
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bigfoot12
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Post by bigfoot12 on Jul 15, 2019 13:06:48 GMT
Why do you assume that leverage is good for property investment and bad for other investments? Sure, you will probably have to mark to market most non property investments, but conversely most non-property investments are much more liquid, and whilst they might not force you to sell with negative equity good luck refinancing once the 5 year fix reverts to something unpleasant. Without putting any effort in rates are 3%+libor for me for S&S, with no fees, nor significant fee increases to the purchase price (double the size of the house you buy with 50% leverage and quite a few of your costs increase). I am happy to be persuaded that borrowing money to invest on the stock market is a good thing to do. Perhaps you can do the maths for me? Let's start with what rate of interest can you borrow at to be secured against the share portfolio you intend to purchase with the lent money? I don't want to persuade you to do anything , and you certainly shouldn't follow some random bod on the internet. However as above I borrow at Libor +3%. If I do it as a spread bet (rather than a CFD) I pay neither stamp duty nor capital gains tax, thought I generally pay a wider bid offer (on both the way in and out) than LSE direct.
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