Unfortunately, very true - that's why we invested savings in mortgage overpayments when the banks went t*ts-up and will now be looking at other alternatives. Renting is too stressful - too many horror stories and i would be far too impatient for the judicial system to kick out deliberate squatters. Plus, I would feel bad for those that fell on hard times and couldn't afford to pay...
@Psycho Sonny - can i ask your experience with Zopa? It's something I've read articles on but never heard details from an actual investor(sic).
The returns initially aren't great tbh. But they get better with time.
As most people default their loan within the first 4 months.
So you have a high rate of defaults which getess over time.
If you invest £1k it will be spread over say 140 people. Say you have 30 defaulters. The first 20 will be within the first year. So your returns are slow. But over time it all evens out then gains traction.
It's a long term investment and you need to reinvest repayments too. So getting money out quickly you have to pay 1% to sell. Or turn re investments off then wait up to 5 years for it to be drop fed to you. You need to manually repay it back into your account too.
I'm doing it to see it for myself. I can afford to live without the money in there.
My plan is to cash out in say 15 years time. Out of everything apart from property. So I'll see how it grows over that 15 year period.
Zopa is the only one I trust not to go bust too from all the research I've done. They actually stopped taking investors for a while which shows you that rather than take new money and loan it to anyone at better rates they would rather slow their growth and do it right. I'm sure other peer to peers didn’t care and just kept giving out cheap loans to dodgy people as they had an abundance of investors.
Zopa seem to know how to run themselves properly and for everyone's benefit.