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Does anyone have experience of property investment?
Can't help but think the ship has sailed on that one.
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I still like the idea of putting money into residential property as a zero risk way of helping your offspring with a deposit on their first property.
Get a buy to let mortgage, putting down 25% on a property, and you get the value increase on the 100%, plus possibly a bit of a profit from the rent above the mortgage interest. So a modest 4% house price rise is actually a 16% return on the cash you put down.
When said child is ready to buy a house you’ve got them the perfect deposit gift. If house prices have gone up madly they’ll have a bigger deposit, if they haven’t it doesn’t matter as they can buy more easily.
The issue is the cost of stamp duty at the point of purchase, so you need a significant rise before you reach break even, but unlike fund management costs it’s a one-off so if you’re investing over a long period it can still work out well.
Depending which survey you believe house prices have gone up about 70% over the last 10 years. If you’d put a 25% /£40k deposit on an average £160k house you’d get back £112k now, a 280% return before you include any rental income. £40k on the FTSE 100 over that time would have given maybe 25% / £10k increase.
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Howard
Hefty
@GoatandTricycle
Following my youngest’s (4yo) diagnosis of autism (we have two daughters) and the somewhat shocking discovery that only 1 in 6 hold a FT job I’ve been trying to think how best we can provide for her future.
Does anyone have experience of property investment? Or a good source where I might find some reliable advice to balance against other investment options.