How much money would change your life?

[Psycho Sonny]

What makes you think that property is a better idea? Where did this idea that buy-to-let is extremely profitable come from? There are way easier ways to get higher returns from your money than property, such as investment funds that give you 15-20% per year.

Property isn't just a case of get a management company to deal with it and make loads of money. Sure you can get them to do everything, but then you'd be lucky to make 7-8% back on your money and that's without considering the house market is in a bad place right now.

The exception to this is buying near the bottom of a growing house market, in which case you would sell the assets at the end before the next bust. In this case the profit comes from the sale and not the rent, which represents a wasted opportunity as more money can be made elsewhere.

If you had £3m or £5m to invest i'd be looking at a commercial properties as well as residential. FYI I am in the market so I know what returns are. A commercial property purchased way back for £200K nets £25K a year rent and £75K every 25 years at lease renewal. The rent is reviewed every so often too. Selling before a bust is impossible to predict otherwise everyone would be doing it. That would be a stupid way to do things. it's property not shares and stocks we are talking about here. nobody buys and sells property like that due to the fees and time involved.

Also when buying outright with next to no costs other than management company. The returns would be silly with no risk attached. The stock market could crash tomorrow so your 15-20% would be more like -25%. Past returns aren't a guarantee of future returns. Property is always going to be worth money.

 

[placeholder]

£50k would change my life immeasurably. Pay off existing debt and allow me to renovate current property without a mortgage. That would them free up a good chunk of salary for fun stuff. Asset rich but cash poor is my current situation trying to play the long game.

 

[itchy]

1 million would do me fine, car, house, and live off the rest. 20k on a car and 250k on a house.

So I would have about 700k in the bank and as am getting old now that would last me my life time.

 

[Kreeeee]

.

 

[ShotInTheAss86]

About a million should do it.

I'd want to move back to York, but a house in a nice area there would set me back around 400-500k on top of what i own already on my current mortgage. Add to that enough to boost my pension so I can work a part time job to cover bills and pay for holidays etc.

 

[subbytna]

3.2million

Have it all planned out. Nothing better to do than dream when shelving books

 

[Psycho Sonny]

If the stock market crashed tomorrow the property market would not fare well either. That 15-20% (averaged 18.5% over the last 5 years for me) is compounded, so if the stock market halved every 4 years I would still break even, what would a property portfolio look like in similar circumstances?

I hope your investments in property go well, but it just seems insane to me considering the profitability of the alternatives.

I don't think any previous crash in property has ever seen it go anywhere near halving in price unless you bought at the worst time and overpaid considerably.

Commercial property holds his rental and price well so long as the business renting it is thriving. this is why it would be important to consider what competition in the area and what could impact your leaseholder. if an aldi opened up 2 miles away for instance.

Also all repairs are done by the tenants with commercial property as is upkeep. If the roof falls in tomorrow they have to pay to repair it unlike residential I would have to foot the bill. There are risks in both markets. People need homes so residential is a safer bet with less risk but less returns unless you happen to buy at the right time in an area which grows very well during ownership.

I think the best market to be in now residential wise is the higher end market. West end, etc and students near posh universities. The slum market is terrible right now (witholding rent, constant repairs and refurbs, etc).

 

[the_r_sole]

I don't think any previous crash in property has ever seen it go anywhere near halving in price unless you bought at the worst time and overpaid considerably.

Commercial property holds his rental and price well so long as the business renting it is thriving. this is why it would be important to consider what competition in the area and what could impact your leaseholder. if an aldi opened up 2 miles away for instance.

Also all repairs are done by the tenants with commercial property as is upkeep. If the roof falls in tomorrow they have to pay to repair it unlike residential I would have to foot the bill. There are risks in both markets. People need homes so residential is a safer bet with less risk but less returns unless you happen to buy at the right time in an area which grows very well during ownership.

I think the best market to be in now residential wise is the higher end market. West end, etc and students near posh universities. The slum market is terrible right now (witholding rent, constant repairs and refurbs, etc).

The other thing that hasn't been mentioned as an advantage of property over stocks, is that you don't need to use all your own money, as an example if you had 100k you could invest 100k in stocks, but with property you could buy a 400k property with a 75% mortgage - then if there is capital growth on top of a monthly income you are at an advantage as the debt hasn't increased so it's a larger % return on investment... high end is definitely the market to be in

 

[dirtychinchilla]

500k-600k. Buy a property out right (in London). Not having to a pay a mortgage for the rest of my life would be nice.

Are you looking to live in a cupboard?

 

[McPhee]

£150k would be the minimum life-changing amount for us right now. It would allow us to buy a reasonable house mortgage-free. That, in turn, would free up about £8k/year in income. That would improve our living standards considerably.

But for a truly life changing amount, £2m would be the number. Assuming a relatively modest return on investment of 5% and an inflation rate of 3%, I could draw £40k/year as a supplementary income while maintaining the value of the £2m lump sum. So I could effectively work how and when I want now, and still retire in my 50s.

 

[Tombstone]

£235,000 would suffice for me.

 

[mattcrane]

Im not greedy, enough to pay off any debt, buy a nice house where we are now, that would do me.

 

[D.P.]

If you had £3m or £5m to invest i'd be looking at a commercial properties as well as residential. FYI I am in the market so I know what returns are. A commercial property purchased way back for £200K nets £25K a year rent and £75K every 25 years at lease renewal. The rent is reviewed every so often too. Selling before a bust is impossible to predict otherwise everyone would be doing it. That would be a stupid way to do things. it's property not shares and stocks we are talking about here. nobody buys and sells property like that due to the fees and time involved.

Also when buying outright with next to no costs other than management company. The returns would be silly with no risk attached. The stock market could crash tomorrow so your 15-20% would be more like -25%. Past returns aren't a guarantee of future returns. Property is always going to be worth money.

Rubbish, historically the stock market typically outperforms property of the long term within the UK. There are countries where property might do slightly better but it is actually a high risk investments compared to stocks. Sure, the stock market might crash but so might the housing market, and the latter tends to happen more frequently and take longer to recover. But with property you have a whole host of other risks form damage, maintenance, fire/flood that are not all insurable to the full extent. The biggest limitation is property does not have a diverged risk, you've locked up all your assets in a single house

 

[Psycho Sonny]

Rubbish, historically the stock market typically outperforms property of the long term within the UK. There are countries where property might do slightly better but it is actually a high risk investments compared to stocks. Sure, the stock market might crash but so might the housing market, and the latter tends to happen more frequently and take longer to recover. But with property you have a whole host of other risks form damage, maintenance, fire/flood that are not all insurable to the full extent. The biggest limitation is property does not have a diverged risk, you've locked up all your assets in a single house

so historically on the stock market if you were given £200K 30 years ago how much would have today? given an "average" return.

 

[D.P.]

If the stock market crashed tomorrow the property market would not fare well either. That 15-20% (averaged 18.5% over the last 5 years for me) is compounded, so if the stock market halved every 4 years I would still break even, what would a property portfolio look like in similar circumstances?

I hope your investments in property go well, but it just seems insane to me considering the profitability of the alternatives.

TBH, the differences are not huge. Property gives something live a 5% return on average, equity 7.5% return. You have to start looking at income taxes, property taxes, wealth taxes, tax reductions on interest, capital gains taxes etc. Property takes a lot of resources to maintain or you outsources, while equity is pretty hands off.

Equity is also far more liquid which has a lot of value in itself. If you suddenly need a lump of cash you sell of the stocks and will have the money within a day or so. If you have some rental property then you might have to wait 6-12months before getting the tenants out depending on the country, and then selling could take another 6-12 months.

 

[HaloUK]

Enough not to have to work again and live a half decent life.... never going to ******* happen!

 

[D.P.]

so historically on the stock market if you were given £200K 30 years ago how much would have today? given an "average" return.

The Average annual return has been about 11% for richest countries in the last 30 years, but about 6% for property.
Over 30 years 200K in equity would give you 4.58Million
200K in property would give 1.15M.

So you would be 4 times richer and have an extra 3.5Million kicking about just by investing in equity rather than property.

 

[Lakeland]

It baffles me the amount of people who think running a business is all gravy. It's nothing but stress and the majority of them fail.

Plough the money into flats near a well respected university in a posh area and just hand them to an agent to manage on your behalf.

You would otherwise odds on be throwing £3 million away.

Who said I thought it’d be easy? It’s something I find interesting and if I was in a position where I could risk starting a business, lose all of the money and still have a massive wedge left, why not? I currently teach so swapping one stressful job for another wouldn’t be that much of a jump.

And I already rent property..

 

[Yas786]

£999,999.99p would do me just fine .

 

[krooton]

Projected earnings for the rest of my working life should do it, so £900k