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There Is No Alternative To B2l For The Bulk Of Lls

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I wish to prompt a debate on the notion 'there is no alternative investment as far as LLs are concerned'.

I myself have pensions, unit trusts, ISA's and alike for many years yet all fail to meet my expectations.

Pensions for property types are a waste of time because when you die the pension ends :o

I want my future generations to benefit from my estate, not some insurance company (anuity provider) that takes the lot when I die.

WANT WE LIKE IS A SENSE OF CONTROL.

You simply do not have this when relying on third party investment managers to do your bidding. Such firms attract huge costs as do the many others in the foodchain of packaged investing.

Someone like Dr Bubb have the competence to make money from markets but this is simply irrelevant as far as the average Jo Blow is concerned.

RENTAL INCOME:

I've come to realise that rental income is the goal, not capital growth and I suspect more and more property people are comming to this realisation. Afterall if you sell you attract 40% CGT - really not what most of us could accept, so better to just enjoy the income.

Attractive yields are always available, they take a little hunting and creativity but they are there.

House prices rise and fall, but I think we should recognise that for many LLs (not all) prices are just noise. As long as they have an income stream, all is well.

Thats not to say there are'nt casualties, of course there are, but still the majority of LLs will not be caught out. Those that are will simply feed better prepared LLs with cheap repos.

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I agree. I'd very likely BTL if prices ever reached 50% below today's in real terms.

Yield is everything - the difference between a millstone and a kite.

I live in hope that a credit crunch will one day put people like me - IE with cash savings - in a relatively strong position (unlike the last 5 years)

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>Pensions for property types are a waste of time because when you die the pension ends :o

>I want my future generations to benefit from my estate, not some insurance company (anuity provider) that takes the lot when I die.

Yeah; I couldn't believe how that worked when it was explained to me.

Been forced to hand your life savings over to an insurance company.

It was one of those "people of Britian you're been robbed blind" moments.

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I wish to prompt a debate on the notion 'there is no alternative investment as far as LLs are concerned'.

I myself have pensions, unit trusts, ISA's and alike for many years yet all fail to meet my expectations.

Pensions for property types are a waste of time because when you die the pension ends :o

I want my future generations to benefit from my estate, not some insurance company (anuity provider) that takes the lot when I die.

WANT WE LIKE IS A SENSE OF CONTROL.

You simply do not have this when relying on third party investment managers to do your bidding. Such firms attract huge costs as do the many others in the foodchain of packaged investing.

Someone like Dr Bubb have the competence to make money from markets but this is simply irrelevant as far as the average Jo Blow is concerned.

RENTAL INCOME:

I've come to realise that rental income is the goal, not capital growth and I suspect more and more property people are comming to this realisation. Afterall if you sell you attract 40% CGT - really not what most of us could accept, so better to just enjoy the income.

Attractive yields are always available, they take a little hunting and creativity but they are there.

House prices rise and fall, but I think we should recognise that for many LLs (not all) prices are just noise. As long as they have an income stream, all is well.

Thats not to say there are'nt casualties, of course there are, but still the majority of LLs will not be caught out. Those that are will simply feed better prepared LLs with cheap repos.

Too many have been bought too recently.... there is no real yield anymore, except for multiple occupancy.

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House prices rise and fall, but I think we should recognise that for many LLs (not all) prices are just noise. As long as they have an income stream, all is well.

Herein lies the problem.

For all the bearishness (much of it fully warranted) about the economy in general, there's very little discussion regarding the additional effects of recession on the economy. More to the point, there's very little discussion on the very real possibility, and decidedly dangerous consequences of a significant rise in unemployment.

Will the kids move out from their parents place into rented if they can't get a job? What will happen to city centre rentals when fresh graduates emerge into a job market where "no previous experience" is a major barrier to employment? How will the more highly leveraged BTL landlords cope if their own income evaporates? What will the situation be regarding housing benefit levels? Will we continue to be deluged with immigrants when there are much rosier prospects on offer? (Hint : guess which large, relatively debt-free, hungry for labour, handy-for-Poland nation opens it's doors to citizens of the new member states in 2009)

Something tells me a lot of BTL landlords will have serious trouble keeping their portfolios together, regardless of how long a game they want to play.

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You could make exactly the same argument for holding a portfolio of high-yielding shares.

There is the possibility of higher short-term volatility and even capital losses, but no maintenance expenses, no void periods, no re-fits, possible tax allowances etc etc, and the likelihood of long-term cap gains too (putting aside questions of inflation). There are lower entry/exit costs and instant liquidity. Admittedly gearing is more tricky but not impossible.

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I agree with the basic premise that for you average 'Joe Bloggs' the only long term investment they feel comfrotable with is property. However, the ability of the common man to invest in property is highly dependent on the cost and availability of borrowing, and the value of the investment depends on rental yields and house price inflation. So whether or not people are only comfortable investing in property is not as relevant as whether or not people can borrow to invest and whether or not that investment returns more than a standard savings account.

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You could make exactly the same argument for holding a portfolio of high-yielding shares.

You forget the 'control' argument. People rightly or wrongly feel more in control of thier own property rather than the whims and inherent opaquness of owning shares in companies.

1 Accacia Avenue is a god deal more understandable than a Directors reports and annual accounts.

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You forget the 'control' argument. People rightly or wrongly feel more in control of thier own property rather than the whims and inherent opaquness of owning shares in companies.

1 Accacia Avenue is a god deal more understandable than a Directors reports and annual accounts.

I think the idea of property being more 'understandable' than other investments is certainly true.

But perhaps an even more important point is that property is one of the few investments which enable ordinary investors to get the advantages of high levels of leverage.

(If the bank would lend me 200k to invest in an index tracker, I'd be happy to do that, but they won't...)

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I think the idea of property being more 'understandable' than other investments is certainly true.

But perhaps an even more important point is that property is one of the few investments which enable ordinary investors to get the advantages of high levels of leverage.

(If the bank would lend me 200k to invest in an index tracker, I'd be happy to do that, but they won't...)

But finally this is changing, I think the banks will be less sympathetic to "investors" borrowing large amounts of money for speculation like this.

If we are in a so called "credit crunch" then there is going to be no one to lend all these ar*eholes the money to get hold of more properties.

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I posted a thread on this recently Have people looked at annuity rates? At the moment, £10k buys a retiring 60 year old £300 a year of index linked taxable income. In 20 years time? Even 250 would be optimistic I think.

I'll have a big pension fund because of company pension schemes, but given the choice I'd be investing elsewhere, even with conservative long term HPI / Rent assumptions the numbers are in favour of BTL, especially if you want to leave anything to your children.

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It is almost impossible to get a positive return on BTL now. So your theory falls down on that point. Moreover every investor should be spreading thwir investment - anybody who puts all their eggs in one basket is a fool. I have got handsome returns form stocks, shares and commercial property. I have also gained from residential proeprty investments. Needless to say, at present a large proportion of my investment rests in cash.

In the long term property and stocks and shares have performed similarly. THe benefits of gearing are great if you buy low and sell high, but how many BTLers do you know who have done that. Most will hang on and sell when it is too late.

I doubt there will be any positive returns on property in the forseeable future and anyone buying now will wait 15 years to break even.

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It is almost impossible to get a positive return on BTL now. So your theory falls down on that point.

Why should you base a 50 year strategy only on current returns?

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It all boils down to Gearing, which boils down to is the market currently rising, which boils down to Credit availability.

Basically people haven't got earned money to invest in shares, so they rely on credit from the banks to gear into property. If property falls in value and rents fail to cover the mortgage then we will see what the market will really be like. I..e will people be prepared to invest in a falling asset, will the banks be willing to lend and what then will the market look like without BTL'rs and FTB'rs (that have already left the market).

The Housing market relies on rising prices, pure and simple.

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I wish to prompt a debate on the notion 'there is no alternative investment as far as LLs are concerned'.

just goes to show what a bunch of small-minded,tunnel-visioned little numpties they are.

The art of playing the markets...whatever markets...is to make THE BEST return on capital you can.

with property returning 6%pa...with serious risk to the downside

bank accounts returning 6%pa...with no risk at all

a well selected ISA/Fund returning 20-30%pa

a well selected commodity returning 50%pa

a well selected spreadbet returning ENORMOUS amounts of money

wouldn't you say they are not making the best use of their money??

...these guys aren't prepared to do homework..they want an easy ride with no perceived risk.

...the correct perception and management of risk is what distinguishes a successful investor from a failure.

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You forget the 'control' argument. People rightly or wrongly feel more in control of thier own property rather than the whims and inherent opaquness of owning shares in companies.

1 Accacia Avenue is a god deal more understandable than a Directors reports and annual accounts.

That means that the yields should be lower. If people of below average intelligence can understand renting a place out but can't understand the importance of dividend yields then there is a lot more competition for renting out houses than there is for buying shares.

A job is going to pay less if the seriously stupid can do it, same goes for investments.

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That means that the yields should be lower. If people of below average intelligence can understand renting a place out but can't understand the importance of dividend yields then there is a lot more competition for renting out houses than there is for buying shares.

A job is going to pay less if the seriously stupid can do it, same goes for investments.

dividend yields don't always happen.

some of the most profitable investments are in loss-making companies that are about to either get taken over,or start to return a profit.

too risky for my liking,but there are HUGE returns to be had if picked well....many of these won't pay a divi or even show up well on a p/e basis.

I only invest in companies returning a profit,it gives a bit of clarity.Capital growth+dividend is the aim.

if either go negative then it's time to employ a stop-loss.

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