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BillyShears

Which Investments Are Better Than Btl

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Here's a challenge to people. What investments are better than BTL at this point in time?

For each, give a few sentences describiong why you think this investment is "better" than BTL.

Billy Shears

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Here's a challenge to people. What investments are better than BTL at this point in time?

For each, give a few sentences describiong why you think this investment is "better" than BTL.

Billy Shears

All of them? :)

I certainly think there are some very good shares out there, especially in some smaller pharmaceutical companies which have some exciting drugs in development.

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When I STM our proceeds from the sale went mostly into cash. As we were in the US at the time I have left the money there in US$ believing that the pound will become unstable as the "Miracle" unwinds.

70% Cash US$ currently paying 4.48% effectively tax free

30% Mutual funds broken down roughly as follows:

50% in balanced funds (mostly US large caps and a mixture of s/t bonds both government and corporate)

10% in Japanese small company funds

20% in European funds--large and medium caps

5% in a US defense industry fund (the best fund)

10% in medium to large cap US growth funds

5% in individual stocks: Royal Bank of Scotland, UK Coal, and Transmeta (efficiency chip maker)

We also have some limited asstts in the UK mostly in cash ISAs.

If the pound crashes and the HPC is 30% or better we will probably buy a house in the UK :) If not we will carry on renting our 350k (present value) house for 750 a month and continue debt free for awhile.

Edited by Realistbear

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Er, gold as it's a safe haven and still below its historical peak. Although I need to do some research in to this as a reasonably knowledgable friend explained that even in depressions gold can and will fall.

The swiss Franc as to the question by the OP? :unsure:

Bloody hell RB, ur property is 'only valued' (I'd guess) at 180 - 190k and we get 600pm. Surely you could get for it couldn't you? :unsure:

We don't own the house we are renting--sorry for the confusion. We bailed out of the market in late 2003 in the US. The house we rent in the West Midlands is a large upscale bungalow with a large walled garden, conservatory, gravel drive etc etc. 750 p.m. rent is very good. Council Tax is hideous though--1914 p.a. The owner has owned it for over 20 years so he is doing okay.

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Er, gold as it's a safe haven and still below its historical peak. Although I need to do some research in to this as a reasonably knowledgable friend explained that even in depressions gold can and will fall.

But gold doesn't always go up. However rents generally do 'go up' with wages/inflation.

A successful BTL will ultimately own a property in 25 years' time and it will continue to generate cash income from rent, month after month.

How much gold can you buy in this time? if the price of gold goes up, then it costs you more to buy more of it each month.

A savvy BTL will have minimal outgoings each month. In a few years' time the rent will easily outstrip the mortgage payments. They will get the mortgage paid off by the tenant.

The BTL gets a house. How much gold will you have in 25 years' time?

You'd do better on the stock market in the long term IMO (compared to buying gold).

Not many things will outperform BTL as most of the 'investing' (in the form of repayments) is done by the unwitting tenant. The BTL LL only chips in a small amount towards the repayments (and maintenance)

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Oil and Gas shares !

eg i bought some EMPYREAN ENERGY shares last november for around 45p a share they are now 120p a share and i expect will rise a lot higher over the next year.

i bought 20,000 shares cost about £9k

Target price IF all goes well is £10 per share after 2yrs you only pay 10% tax so IF it works out a £9k investment would turn into £200,000 -10% tax takes it to £180,000 the price of an average house

Not without risk but better than putting the £9k as a deposit on a £180k house and paying a mortgage for the next 25yrs !

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Oil and Gas shares !

eg i bought some EMPYREAN ENERGY shares last november for around 45p a share they are now 120p a share and i expect will rise a lot higher over the next year.

i bought 20,000 shares cost about £9k

Target price IF all goes well is £10 per share after 2yrs you only pay 10% tax so IF it works out a £9k investment would turn into £200,000 -10% tax takes it to £180,000 the price of an average house

Not without risk but better than putting the £9k as a deposit on a £180k house and paying a mortgage for the next 25yrs !

I bought 1000 shares in UKCoal at 1.41 about 8 weeks ago. They are now up to 1.55 (10% in 2 months). The long term looks good as coal is a huge energy source and I have been studying the strides taken to clean the fuel so that it is no longer an enviromental hazard. Hopefully, the shares will keep on rising!

Well done on EMPYREAN.. Just about any decent share is going to beat BTL which has nowhere to go but down as the economic cycle is headed in the wrong direction for further air to fill the bubble.

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Errr... A cash savings account?

ICICI = 5.15% Gross

BTL Yield? <5% according to ARLA.

(And yes, you pay tax on both interest and rent)

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Errr... A cash savings account?

ICICI = 5.15% Gross

BTL Yield? <5% according to ARLA.

(And yes, you pay tax on both interest and rent)

I agree its time for cash in the bank at around 5% with well known names.

All assets look set for a correction as bond yields rise, inflation rises and credit liquidity tightens.

If you felt brave you could place some bearish speadbets on various assets.

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Errr... A cash savings account?

ICICI = 5.15% Gross

BTL Yield? <5% according to ARLA.

(And yes, you pay tax on both interest and rent)

That BTL yield will be a gross yield, will it not? Difficult to get more than 5% yield on newly purchased properties around my way. Take maintenance, fees, voids, and other costs out of that and the true return will be < 5%.

Billy Shears

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Short term savings rates in the US are currently around 4.5% but longer term time deposits can be had at around 5.5% if you are willing to tie the money up for 12 months. The UK may still be slightly ahead until the Fed finishes its series of hikes that will probably end at 5.25% (barring any hikes from Japan that is).

If BTLs are yielding less than 5% the risk is by no means offset by the potential reward as all of the potential capital appreciation has already occured in the long run up in prices. The risk now is all to the downside so with a small return of less than 5% the sell signal must be flashing.

I read in the US that the professional real estate investors got out by around mid 2004 leaving the amateurs to take the risks off their hands.

It is unbelievable that TTRTR has not attempted to sell his BTLs because of the risk/reward ratios.

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Guest muttley

A successful BTL will ultimately own a property in 25 years' time and it will continue to generate cash income from rent, month after month.

That's a bit unfair.The original question asked which investments are better than BTL at this point in time. You've taken a 25 year perspective.

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You've taken a 25 year perspective.

And assumed that the BTL will be on a repayment mortgage and won't be repossessed in the crash. Far more likely to be interest-only and get into deep shit when their three million pound property empire of two bed 'executive apartments' is only worth five hundred thousand.

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Guest muttley

And assumed that the BTL will be on a repayment mortgage and won't be repossessed in the crash. Far more likely to be interest-only and get into deep shit when their three million pound property empire of two bed 'executive apartments' is only worth five hundred thousand.

Quite.

Which actually points to a flaw in the original question.BTL is not an investment, it is a business.

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Share V BTL

Even on a bad day in the stockmarket you can sell your shares at the click of a mouse so you can liquidate very quickly.

Houses can take months or even years to sell.

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It's time to go ultra cash-heavy IMHO. Just about everything's been in "rally" mode: equities, oil, gold.. even property (lol). Personally I am out of nearly everything except a few longer-term holdings, and even they are hedged with some sept-dated puts.

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Guest muttley

It's time to go ultra cash-heavy IMHO. Just about everything's been in "rally" mode: equities, oil, gold.. even property (lol). Personally I am out of nearly everything except a few longer-term holdings, and even they are hedged with some sept-dated puts.

Would you include foreign stocks in that, Van?

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It's time to go ultra cash-heavy IMHO.

Van, are you saying as a uk citizen, and STR, would you put everything, i mean everything in cash, maybe in a notice savings account for the forseeable future, just to see if our rates will follow everybody elses's, which i do think they will. :lol:

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Quite.

Which actually points to a flaw in the original question.BTL is not an investment, it is a business.

Would you say that many people entering the BTL market now or in recent months believe that it is an investment, and haven't thought about the business side? That's different from it being an investment or a business.

Billy Shears

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Would you include foreign stocks in that, Van?

Sure. Looking at S&P, FTSE, Dax, Nikkei, Hang Seng... they have all tended to follow one another over the last few years (since the bottom of the Nikkei market, at least).

One of the most heavily bullish indicators over the last few weeks has been the % bullish/bearish advisors (usually a very good technical indicator), and that has begun to look far more peeky afer the last few sessions:

Bull/Bear ratio

This probably ISN'T major top. The market has too much upward momentum and too many people have been predicting a shot-term pullback for there not to be at least one more leg up imho.

Van, are you saying as a uk citizen, and STR, would you put everything, i mean everything in cash, maybe in a notice savings account for the forseeable future, just to see if our rates will follow everybody elses's, which i do think they will. :lol:

Everyone's own ideal investment strategy will be different from others' because we all have different approaches and tolerance to risk and reward, and different goals from our investments. I would personally never go 100% in anything (including cash) because I believe that putting all your eggs in a single basket you are not taking on enough risk, and therefore limiting your returns. I'm NOT saying definitely that stocks (or gold, oil or anything else) will crash - but I AM saying that the risk/reward is not worth being heavily long on these markets right now, because having gone up as much as they have, the risk to your capital of a short-term correction is great enough to outweighs the potential returns from whatever upside the market has left.

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Guest muttley

Would you say that many people entering the BTL market now or in recent months believe that it is an investment, and haven't thought about the business side? That's different from it being an investment or a business.

Billy Shears

Without a doubt. It is not a great business to be in going into a recession, unless you have deep pockets. I wonder if they have factored in the extra voids and defaults? Rents may fall too.They did last time.

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That's a bit unfair.The original question asked which investments are better than BTL at this point in time. You've taken a 25 year perspective.

But so do a lot of recent BTLers. (take a 25yr perspective)

In the short term BTL often makes a loss. Especially if you consider all the set up costs etc.

But then most business ventures make a loss at the start.

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My investment spread, having sold UK resi B2L;

+1 commercial property with my business

+European general fund

+Malaysia general fund

+Health fund

+Technology fund

+Fund of funds - for smallish Pension contribution

+FTSE tracker fund

+Berlin land with planning permission for resi and or offices

+Moroccan property on 'Mediterranea Saidia' world class development

+5% cash

+a few risky individual share holdings

Tip (bleedin obvious one): I think demand for precious and natural materials will be unprecidented as all the world enters the industrialised arena for the first time.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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