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Bruce Banner

Burger Van Man

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I've just got in and only caught the end of it, but BBC News are doing a piece on pensions....... They interviewed a burger van man who has decided to get into......... buy-to-let for his pension.

That's one for the propaganda thread.

No wonder the Scottish started protesting against the BBc

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I reckon BTL is going to be massive, already over 60s are piling in, the new rules on releasing pension lump sums were brought in by Osborne to stoke BTL and there are no signs he is wrong. Another wave will be kicked off by these new pensioners.

Even gen x will get in on it, as they have either no pension or a state pension being pushed back further and further, they will have no option but BTL if they want to retire at 65. BTL is the new pension for all.

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I reckon BTL is going to be massive, already over 60s are piling in, the new rules on releasing pension lump sums were brought in by Osborne to stoke BTL and there are no signs he is wrong. Another wave will be kicked off by these new pensioners.

Even gen x will get in on it, as they have either no pension or a state pension being pushed back further and further, they will have no option but BTL if they want to retire at 65. BTL is the new pension for all.

Guaranteed return each month and it's inflation proof......

Obviously you have to ignore running costs, that roof won't need fixing etc.... Plus it's like buying an annuity that goes up in value get £600 a month in rent tax free for 10 years sell up and get back your investment plus a tidy little profit.....

What can possible go wrong....

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Guaranteed return each month and it's inflation proof......

Obviously you have to ignore running costs, that roof won't need fixing etc.... Plus it's like buying an annuity that goes up in value get £600 a month in rent tax free for 10 years sell up and get back your investment plus a tidy little profit.....

What can possible go wrong....

INflation proof you say, rents in NOrthampton have gone nowhere in 16 years.

Pensioners are playing a dangerous game taken on debt to buy houses.

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I'm looking forward to cheaper rents!

Cheaper rents will kill BTL.....then you, if you can save the deposit required and wanted to buy the home the BTLer decided not to buy because there was no profit in it for them......something else became more appealing. ;)

Edited by winkie

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LOL, who exactly are they going to rent too?

I bring this up because I am a long term renter. I was renting form a very large estate agency in the north ( buying never suited my lifestyle) Not only did the agent tell us we were the longest and most stable renters we were the only ones who didn't cause problems. We were there for 3.5 years and a really unique specimen from what I gather.

I have rented about 10 different houses in my working life, all apart form two I was continually harassed by debt collection agencies and unpaid utilities just after I moved in after the previous tenant done a runner. It was from this I learned just how limited the powers are of debt collectors and other agencies are but also just how many tenants dont give a shit. My second to last house the previous tenant racked up 50k in gambling debts then done a runner. At first I used to worry about the situation the previous tenant left but then I learned you can put angry letters in the bin and nothing happens.

BTL is a huge amount of hassle, I would rather just work into retirement because as far as I am concerned BTL is work. You never just sit and get free money. One time I cut a landlords holiday short as he had to come and deal with a major issue which couldn't be done over the phone, it is his asset after all. More houses more issues too. F**k that

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INflation proof you say, rents in NOrthampton have gone nowhere in 16 years.

Pensioners are playing a dangerous game taken on debt to buy houses.

I beg to differ every year imputed rents are going up. Ergo it's inflation proof. Clearly you will be a pauper in old age! :ph34r:

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BTL is a huge amount of hassle, I would rather just work into retirement because as far as I am concerned BTL is work. You never just sit and get free money. One time I cut a landlords holiday short as he had to come and deal with a major issue which couldn't be done over the phone, it is his asset after all. More houses more issues too. F**k that

Yep, these BTLers will find out the hard way. And probably all at once.

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At least with a BTL there is something left, just think if you had taken out an annuity .... a few years paid out, you die and BANG the money is gone.

But you'd be dead, why (and how) would you care?

Edited by Eddie_George

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Yep, these BTLers will find out the hard way. And probably all at once.

And just to add, its ok to manage properties when your 60s maybe early 70s if your fit and able but in your 80s? 90s? who will end up dealing with the hassle because your too senile or weak? yup it'll be a big burden you drop on your own kids as well as them having to look after you. The legacy he leaves his kids could be one of repairs tax issues and bad tenants.

I have zero sympathy on them when this blows up.

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I've just got in and only caught the end of it, but BBC News are doing a piece on pensions....... They interviewed a burger van man who has decided to get into buy-to-let for his pension.

The average pension pot at retirement is just £36,800, according to figures from the Association of British Insurers. That's a pretty feeble return, for a lifetime of saving.

It is enough to buy a single man aged 65 an annuity income of just over £2,250 a year, or roughly £190 a month, for the rest of his life.

Thats a 20% deposit on a small BTL...not enough for a BTL mortgage I gather.

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Wait until next April and imagine the boost the pension money will give to house prices. Also on the news prog it said that 20% did not trust pension firms. Of those that had money stolen by Brown that number will be closer to 100%. At least with a BTL there is something left, just think if you had taken out an annuity .... a few years paid out, you die and BANG the money is gone.

I did, six years ago, in my mid fifties, if I make it to seventy I'll have got the principal back. In the meantime, the 7.5% I get on that money is well above the interest I get elsewhere and compares very favourably with the average net yield on a buy to let. Also, as a higher rate taxpayer, I got 40% tax relief on the money I paid in.

Edited by Bruce Banner

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LOL, who exactly are they going to rent too?

I bring this up because I am a long term renter. I was renting form a very large estate agency in the north ( buying never suited my lifestyle) Not only did the agent tell us we were the longest and most stable renters we were the only ones who didn't cause problems. We were there for 3.5 years and a really unique specimen from what I gather.

I have rented about 10 different houses in my working life, all apart form two I was continually harassed by debt collection agencies and unpaid utilities just after I moved in after the previous tenant done a runner. It was from this I learned just how limited the powers are of debt collectors and other agencies are but also just how many tenants dont give a shit. My second to last house the previous tenant racked up 50k in gambling debts then done a runner. At first I used to worry about the situation the previous tenant left but then I learned you can put angry letters in the bin and nothing happens.

BTL is a huge amount of hassle, I would rather just work into retirement because as far as I am concerned BTL is work. You never just sit and get free money. One time I cut a landlords holiday short as he had to come and deal with a major issue which couldn't be done over the phone, it is his asset after all. More houses more issues too. F**k that

Here lies the problem......the people that lend that allow that sum of money to be racked up, because someone must have gained from it, the companies they spent it with or the fees and interest added to it not forgetting all the jobs created to chase it.....someone's debt = someone's wealth. ;)

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http://rationalwiki.org/wiki/Great_Depression

The atmosphere of the late '20s (financially speaking at least) can be summed up in the following (likely apocryphal) anecdote. In the winter of 1928, Joe Kennedy decided to stop to have his shoes shined before he started his day's work at the office. When the boy finished, he offered Kennedy a stock tip: "Buy Hindenburg." Kennedy soon sold off his stocks, thinking:

You know it's time to sell when shoeshine boys give you stock tips. This bull market is over.[1]

A timely move considering that the stock market would soon resemble the fate of the airship Hindenburg itself.

We have our shoe shine boy moment today.

The BTLers are going to loose their shirts.

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A few years ago I got 7.5% on an instant access account ... today it would be 2% if I was lucky. Timing. In 1980 I bought a house for 3 x salary ... today it would be 8 x equivalent salary. Timing. Since 2007 house prices in NW London up by 75% or more. Timing. In other places prices down or static. Timing. What annuity % would you get today? No where near 7.5% I guess.

I got hit by a bus once....timing. What's your point ?

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Here lies the problem......the people that lend that allow that sum of money to be racked up, because someone must have gained from it, the companies they spent it with or the fees and interest added to it not forgetting all the jobs created to chase it.....someone's debt = someone's wealth. ;)

What makes me laugh, is how all these problem tenants find anywhere to move to...their references must be shite, yet they seem to move on regardless.

I guess the actual credit checks are never properly made.

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A few years ago I got 7.5% on an instant access account ... today it would be 2% if I was lucky. Timing. In 1980 I bought a house for 3 x salary ... today it would be 8 x equivalent salary. Timing. Since 2007 house prices in NW London up by 75% or more. Timing. In other places prices down or static. Timing. What annuity % would you get today? No where near 7.5% I guess.

Buying a house in a house price bubble........ Timing.

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What makes me laugh, is how all these problem tenants find anywhere to move to...their references must be shite, yet they seem to move on regardless.

I guess the actual credit checks are never properly made.

Yup especially with how much they cost "tenants" in terms of fees. I went to view a house once, it all looked good. The agent started adding all these random fees on including £90 because we had a cat. In the end we decided to just take another house where the fees were £80in total and the landlord was so desperate they waived the need for a deposit. We had our "pick" of houses too so its not exactly this housing shortage they keep telling us of. A week later the same agent phoned us and demanded to know why we didnt want the house, we explained he was trying to diddle us with fees, we got a similar house closer to work and in a decent area. He lost the plot ( must have been short of cologne money) and had a right rant at us.In true profession estate agent fashion of course. All I was thinking was "herein lies a lesson in the free market you f**ker".

Its a big lie, they never check, they just want the fees and the landlords are often desperate for paying tenants as they have a BTL mortgage to service.

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So you assert there is a 7.5% ave net yield on a BTL, annuities (OK there are other options) are no where near that now so not surprisingly people are going for BTL to try and get the same yield as your annuity.

7.5% yield when houses are over valued, maintenance and voids, everyone is skint, housing benefit in desperate need of being cut, rents dropping in real terms for years.

BTL is a mugs game, would you want to get into all the hassle at 65....no thanks.

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So you assert there is a 7.5% ave net yield on a BTL, annuities (OK there are other options) are no where near that now so not surprisingly people are going for BTL to try and get the same yield as your annuity.

No! I said "compares very favourably with". I'm getting 7.5% on my annuity, I would think the net yield on BTL would be more like 3%.

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Frankly, nothing would give me the fear more than dealing with problem tenants (and being dependent on their payment) into my 60s/70s/80s/90s. I can see a lot of BTLs ending up in huge management firms just out of sheer economies of scale and reduced hassle. That's likely to be where the real money is over the coming decades if boomers and Gen Xers pile in.

My shoeshine moment came about a decade ago when I heard two ladies in an east London branch of Farm Foods talking about their BTLs (they were working rather than shopping there btw). Still, I guess they are still having the last laugh so far...

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