Buy to let or stocks & shares, WWYD?

[tricerotopsrule]

I’m weighing up the pros and cons of each option. Is buy to let a thing of the past now? There’s a flat that’s come up that looks good as an investment as my DCs could live in it while they are at uni but I’m wondering if investing the money in stocks and shares would be better and I could help them a bit from the returns from that?

What is buy to let like now?? I’ve not done it before but hear it’s more of a headache now?

As you should be. Providing housing to people shouldn't be a quick easy money making scheme!

Are you a higher rate taxpayer @tricerotopsrule ?

This is terrible advice. Investing long term in a FTSE tracker has always outperformed cash.

BUT my cash ISA is giving me a better return than my BTL, so take from that what you will…

Absolute no brainer

It's not terrible advice. It exists in the context of risk. For someone risk averse, it's very good advice. For someone who has more tolerance to risk and possibly cushioning, it's not a route that would work for them.

@ItsFineReally yes I am

@tricerotopsrule , if you are looking for an easyish passive income don’t go near buy to let with a super extended barge pole!
My husband and I have 7 B2Ls and invested money, both have been hit with an additional 2% tax in the latest budget. If I had my time again I would never go down the B2L route, never. I hope that helps.

I do BTL and it works well for me
Buy a freehold though
If it’s up north north, north is having a massive boom at the moment Liverpool, Manchester, Leeds are all doing very well

That definitely makes BTL less attractive and I see that the majority of posters are understandably advising you against it.

I would say that if you were considering a student let that your own children would live in then it's a slightly more nuanced situation. But it seems that you're pretty well decided to go down the equity route anyway. It's certainly less hassle!

It’s interesting, because big corporates now have advantages over small landlords and they are buying thousands of flats to let. If you look online there are endless complaints about how they treat tenants and shameless price hikes.

Do you have insurance and qualifications for giving financial advice?

Why? Nothing anybody has written on this thread is financial advice.

Do you?

lol, what??!!!

Yep, people like me were shouted down when we pointed out this wont be good for tenants for small landlords, the local landlord, the accidental landlord to be taken out of the rental market. Well this is the outcome.

If you do go down the BTL route I gather the way to do it now is to out it in a limited company rather than your own name, the tax situation is more advantageous in the long run and there is less inheritance tax too if you eventually leave it to DC. I am a landlord, it’s a steep learning curve and hard grind at first and a real pain when things go wrong but I’m hanging in there as the supplement to my salary/ future pension top up will be worth it. The property podcast is useful for self education podcasts.apple.com/gb/podcast/the-property-podcast/id624127071

Stocks and shares 100%.

This.

What people fail to realise is that the risk of losing the purchasing power of money placed in a savings account is 100% over the medium and long term because interest rates are always lower than inflation. I'd say that's pretty risky.

Martin Lewis has just started doing some content on investing which will I'm sure be well thought out. Also look at Meaningful Money on YouTube, website and podcasts.

Martin Lewis showed on his recent Investment Special that even if you had put your money in the highest rate possible cash savings accounts available you would still have lost out due to inflation.

S&S offer a far better rate of return and if you invest sensibly (ie hold a diverse portfolio and accept that investing should be for a bare minimum of 5 years to level out market volatility) then the “risk” is pretty low.

I second the suggestion of looking at Rebel Finance School - it’s a totally free course run by a couple who were able to retire in their early 40s due to their investments - all low risk, passive global trackers.

https://rebeldonegans.com/finance/rfs/

https://x.com/martinslewis/status/1998774811577741806?s=46&t=vZsKCHJJ4lL6NrAoNyJFww

I'm sure you already know this but make sure you have a good cushion of between 3-6months income to rely on before you start investing in S&S. It's important you don't see your investment as a rainy day fund. If the stock market falls you want to have enough cash to see you through without selling.

I would actually have more than this. You don't want to have to touch your stocks and shares in a down cycle and they can last in some cases quite a while, a few years even.

Thanks for the advice re cash being available too. Thankfully I have some cash in a high interest bank account and some Premuim Bonds too so I’m looking for where else to invest if it’s not a BTL.