Sell small property to invest the money instead? Stupid? Dh says its ridiculous and to keep it and it won't get as much.

[Alpacinoshoohaa]

Small property gets about 7 grand a year after taxes etc.

Property worth around 100,00 maybe a little more maybe a little less.
I'm wondering about investing it instead in stocks and shares funds and removing the human aspect of this type of investment. I've spent a lot of money on it in recent years and something always seems to go wrong eg I paid for new doors and there were issues, paid for new windows and also issues.

It's commercial not housing.

I'm thinking about selling and putting some into a sipp and some into stocks and shares isa (drip it in)
Silly idea or sensible?

@jimmyhill

I struggle to imagine an investment where you could safely and reliably get a 7% return (though how much of that has to be put by for maintenance etc?)

What about investing the profits from the property and hanging onto the asset for now

I just checked the return on my main pension between 08/10/2011 and 08/10/2021 (with strong European and International bias since before the Brexit referendum).

Annualised growth is 11.6% (no income taken)

Doesn't sound spectactular but I am very satisfied with it.

YMMV

That is in nominal pounds, not adjusted for inflation, and includes the CV crash and partial recovery.

The FTSE 100 appears to have done worse but does not include reinvested income which would push up the return in a low-cost tracker.

Fair enough, but supposing you'd invested just five years earlier, in 2006...?

If it is a commercial property, I thought the tenant is responsible for any repairs and maintenance

It's commercial not housing.

Why do people never bother to read the OP properly!?

What kind of commercial is it? A lot of people here are assuming that if you hold on to the property you'll make money through capital gains but that might not be the case for some kinds of commercial property. If it's a shop for instance it's probably not going to increase in value much in the current retail climate.

Also, you need to consider what you want this investment for.

If it's for a pension then you wouldn't generally expect to take any income out until you're retired. If it's for an income now then it might be difficult to accumulate enough to become a worthwhile pension.

@PhillMcCann

Silly I think.

Extremely volatile times at the moment, I wouldn't be sinking my entire savings into any stock at present.

I'd keep the house.

Not sure why you think a well-balances, diversified portfolio (which covers equities, bonds, real estate, infrastructure etc) is more silly than having all eggs in a property basket.

What if Op can't get a tenant for six months? What if the property market corrects and the cost of the house falls substantially? What if the roof gets damaged and she needs to fix it.

@Alpacinoshoohaa - my Stocks and Shares ISA has made 16.66% on average (been open for four years). (NB I just one of the robo-wealth platforms for this, so I set the risk level and they do the best. I think stock-picking yourself is a mug's game akin to gambling).

My private pension (also invested) is on 14.89% (this one's been running for two years). So you definitely can beat the property returns with investments. (This is in a default fund so the pension manager does all the hard work, and a lot of it is passive trackers).

The thing that strikes me though is whether you need the income. The best thing with investments is to leave them for five years plus so you get cumulative interest as profits are reinvested.

Obviously with the house you're getting income in the form of rent payments. If you need that cash-flow then you want to look at income investing, for which I'd consider an IFA.

@jimmyhill

That was my intention to invest the rent but, as I mentioned previously unfortunately, I can't seem to get ahead because of works needing doing.

@OnceUponAThread

I don't really need the cash right now but I'm in minimum wage.
Dh is not a high earner, so ideally yes I'd love to use the rent but whatever I save gets eaten up by works.
Also I set aside money from my salary for tax.
I wouldn't have to do this if I was able to get the sale proceeds into an isa.

@jimmyhill

Fair enough, but supposing you'd invested just five years earlier, in 2006...?

8.55%

• I agree stock picking mugs game, I just buy index funds but have one or two smaller funds that I call my gamble funds

[quote Alpacinoshoohaa]@jimmyhill

That was my intention to invest the rent but, as I mentioned previously unfortunately, I can't seem to get ahead because of works needing doing.

@OnceUponAThread

I don't really need the cash right now but I'm in minimum wage.
Dh is not a high earner, so ideally yes I'd love to use the rent but whatever I save gets eaten up by works.
Also I set aside money from my salary for tax.
I wouldn't have to do this if I was able to get the sale proceeds into an isa.[/quote]
Sounds like a decent plan then (IMO). I guess the other consideration is whether you'll have to pay Capital Gains Tax on the property and how much.

To me it sounds like:

• the property isn't actually making anything like 7% once repairs, tax etc are in play. So you're not making great returns or benefitting from the income.
• there's a lot of unwanted faff with the human element that's annoying an unwanted.

I think a well diversified, cheap on fees, stock portfolio makes loads of sense. Depending on how old you are, I'd consider flowing it into a mix of an S&S ISA, possibly and S&S Lisa (nutmeg do one), and your Vanguard pension. Maybe with a buffer in the highest interest rate savings account you can find (say £5k) for emergencies.

I'd set your risk levels, and then I would try really hard not to look at your investments, especially in the early days. But I would divide the total amount you're putting in over a year and transfer it monthly (to spread out the risk of little bumps).

(I maxed my ISA right before Covid, and it halved overnight which was a scary moment. Made it all back and more within the year, of course, and it steadily grows now. But it was really bad timing. My other S&S ISA which has a monthly direct debit was much smoother).

Also I set aside money from my salary for tax

Surely tax would come out of your income from the rent rather than your salary?

I was in the same situation. I had two letting properties that were a total pain in the butt and giving me so much stress!

I sold them both. Used the money to pay off my mortgage (after just 7 years) which saved me a huge amount of money.

The remainder I put into a stocks and shares ISA and a SIPP and a Fund and Share Account.

All of these are with Hargreaves Lansdown. They are managed by fund managers.

Overall, in 7 years the money I invested has grown 40 percent.

I thought I would lose during the pandemic but I gained even more. Some of the funds I am invested in have made over 50%.

My worst fund made 11%.

Could you convert your shop to residential?

Hi there - it’s tricky as I bought an investment property that has already gone up in value by 30k in two years however unlikely to make more until another 5 years passed rental yields approx 5 % and stocks and shares average 12-15% a year so having money makes money if invest wisely with specialist advice go for it

You have income AND capital growth...hard to beat that!