Property (1 Viewer)

[lynsey2]

Good Idea; Bad Idea

Do you think its better to invest all the money you have in property (if you can) or keep it in a savings account?

 

[Mile-O]

Property in the UK or property abroad?

Perhaps not all of it in property. As for a savings account, you can get taxed. An ISA is tax free although you are limited to a maximum (for the smaller ISA) of £3,000 per year of savings.

 

[selenau837]

I would say it depends on where you live. If have the ability to purchas some property in an area that is about to boom in the next few years, I would. If not, then a high interest savings account would be better or CD's or stock.

However, I tend not to be able to save. I have a 401K etc, but that is handled for me, not by me.

 

[lynsey2]

Property anywhere!

I simply mean should we save up money or invest it in property. Doesnt really matter where you save it ISA or savings ac, do you save it up or invest in property?

I own my flat, and i own my house (with warren) i have equity in my flat and would like to take out the extra (the equity) and invest it in another property.

This would mean i had no money (no equity) but i would have another property.

then maybe in 5 yrs time or so my flat would be worth more giving me some equity on that and the other property may have gone up in value too giving equity on that.

does that make sence or is it all a bit fairy tail ish?

 

[lynsey2]

thanks selenau

just for info whats a 401K?

 

[selenau837]

thanks selenau

just for info whats a 401K?

A 401K is something I get while working. I put in a % of my pay check each week, and the employer will match up to 5% of what I put in. It is like a savings account. It is great because it allows me to save. The company that holds my 401K can invest it for you etc. I didn't choose that option. I am not up on the stock market, so I don't feel like losing my earnings.

The down side is you can't touch the money. Only way you can touch it is to retire or quit. If you quit, and get all the money out, instead of rolling it over into another account, it is considered a taxable income.

You can take a loan out on it, but you pay it back with interest. Not so bad. You pay it back to yourself and then some.

That is my understanding of it, perhaps someone else more 'seasoned' can explain it better.

 

[KenHigg]

Good Idea; Bad Idea

Do you think its better to invest all the money you have in property (if you can) or keep it in a savings account?

Humm... If you were in the states and if you have the time to do moderate research, I'd say land. The major upside is that it will most always increase in value. But if you do not do a little research, it may take a long time to increase in substantial value. However, keep in mind that taxes will be due and that money will have to come from somewhere and this offsets your gain. Also, the asset is not very liquid. Meaning it would take considerable effort to see any real money if you faced an emergency. This is why it's a good idea to keep some money in a traditional savings account.

In the end, it's really just another investment vehicle out of the many that are available and you should consider more than just these two...

 

[Vassago]

Humm... If you were in the states and if you have the time to do moderate research, I'd say land. The major upside is that it will most always increase in value. But if you do not do a little research, it may take a long time to increase in substantial value. However, keep in mind that taxes will be due and that money will have to come from somewhere and this offsets your gain. Also, the asset is not very liquid. Meaning it would take considerable effort to see any real money if you faced an emergency. This is why it's a good idea to keep some money in a traditional savings account.

In the end, it's really just another investment vehicle out of the many that are available and you should consider more than just these two...

I don't know how it is in Georgia or in the UK, but I can tell you the amount you gain in equity alone in most parts of Florida is much more than enough to offset the amount you pay in taxes, espeically if you buy from a new location where construction is just starting. By doing this, you're bound to gain a lot before the property is even complete.

 

[Mile-O]

401k is an American thing; don't worry about it, Lyns.

You would probably be best to buy property abroad since there are certain places there which are still to boom: Bulgaria, Romania, Serbia & Montenegro, are some interesting options where, with a bit of luck, you could see your investment skyrocket to about 300% to 400% over a number of years. Poland is another good option as it's young are migrating out of Poland to other countries (especially the UK) to find higher paying jobs since thhey joined the EU. Estonia, Latvia, and Lithuania are worth a look too.

 

[KenHigg]

... if you buy from a new location where construction is just starting.

Looks like you did a little research

 

[TessB]

I don't know how it is in Georgia or in the UK, but I can tell you the amount you gain in equity alone in most parts of Florida is much more than enough to offset the amount you pay in taxes, espeically if you buy from a new location where construction is just starting. By doing this, you're bound to gain a lot before the property is even complete.

the property we bought in Georgia, for $50k, was appraised for $101k before we even signed the paperwork! I don't know how long it was on the market, but we got a sweet deal.

 

[KenHigg]

... No doubt money can be made in property speculation but this is begining to sound like a get rich quick thread...

 

[Ron_dK]

this is begining to sound like a get rich quick thread.

Which one, the English or the wealthy one ? Just throw in GWB

couldn't resist

 

[Newman]

From a paper I read recently (free translating):
«The population getting older and older, in a few decades there will be more citizens of over 60 then between 20 and 60. That means that a lot of houses and flat are going to become empty as these persons will go to retirement houses or even die. Therefore, young couples will have more choices and you'll have to lower the prices to get them to come to your place. So, you'll make less money. Also, if having a property doesn't bring enough money, you can be sure that selling it back will not give you much more cash that you actualy put in it.»

Though that may not apply to Europe, I think it is wise to put you money somewhere else. One property is already enough.

 

[dt01pqt]

I would buy to rent. This would offset some of the risk involved in buying property. The property bubble may bust but at least you will have an income which you can set aside for a grey period.

If you really want to play the property game you have to move faster. Get a large mortgage, buy, add value, sell, get a bigger mortgage. This is not really for everybody.

 

[Rich]

I would buy to rent. This would offset some of the risk involved in buying property.

Would you like a list of all the landlords that I know who's tenants did a runner owing thousands? The return on rental property is not much higher than the interest rate, the only upside is the increase in market value, however that will be subject to capital gains tax.
You need to thoroughly research the pros and cons of that avenue before you go down it, don't be taken in by salesmen, in the long term property is always a good investment, but remember it can be a very risky venture where you could loose everything, putting all your eggs into one basket is never a good idea.

 

[KenHigg]

..You need to thoroughly research the pros and cons of that avenue before you go down it, don't be taken in by salesmen, in the long term property is always a good investment, but remember it can be a very risky venture where you could loose everything, putting all your eggs into one basket is never a good idea.

I knew if you posted enough you were bound to say something I agree with

 

[dt01pqt]

Would you like a list of all the landlords that I know who's tenants did a runner owing thousands? The return on rental property is not much higher than the interest rate, the only upside is the increase in market value, however that will be subject to capital gains tax.
You need to thoroughly research the pros and cons of that avenue before you go down it, don't be taken in by salesmen, in the long term property is always a good investment, but remember it can be a very risky venture where you could loose everything, putting all your eggs into one basket is never a good idea.

As a joint landlord I've never allowed my tenants to owe. I would be impossible for them to owe more than the deposit the way we set up the contract and they pay by direct debit anyway.

Where people get screwed is in informal room lets without proper contracts. Most of these people aren't declaring their income so it isn't surprising they get screwed.

What exactly are you saying? That you shouldn't let because that's what it sounds like.

 

[Rich]

As a joint landlord I've never allowed my tenants to owe. I would be impossible for them to owe more than the deposit the way we set up the contract and they pay by direct debit anyway.
.

You've been lucky, as far as your tenants not owing money at the minute, make the most of it, they can end up owing you 9mnths rent before you can get the baliffs in to evict.

I'm not saying don't let, I'm saying that you need to be aware of the pitfalls.

 

[Rich]

I knew if you posted enough you were bound to say something I agree with

The property rental market here is very different from the States, tenants here cannot be evicted just for being one month in arrears