The biggest thing for me between properties and pensions is that you can get an income now rather than when you are 57 or later. It puts you in control to make decisions. I am 46 and my other half is 50 and we have three properties which we let out. We actually live in the cheapest property we own… 😂 We are currently discussing / calculating if she can stop work in 3 years and myself in 5. If all of our money was in pensions we could not do this. Thought I would raise this as it was a point not discussed. 👍
Yes, that is a fair point. There is the optimality of income there. I was using it through the lens of the either/or for retirement but you're right there is the other pre-retirement angle. Great input here and thanks for watching. 👍
Yes, absolutely. I think the thing with property which does really change the dynamic is competency with renovations and being able to do that personally. Some of the most successful property investors I know have been brilliant at being able to do a lot of that themselves which saves a fortune in professional/builder/decorator etc costs...... that said. the comment on the 'advantage of leverage' in a world of rising rates is going to need a re-assessment.
Real world property instead of pension. It worked for me however I maintain and manage. Plus I bought my properties when I was young and prices were not as inflated as now.
Good stuff 👏. In my view while property can definitely still work for those who are well informed and prepared. Just that the glory days of BTL portfolios has truly ended. Prices, yield, tax changes. It's not an easy market to get into! Thanks for watching. 👍
Simon, just came across this excellent video today. My wife an I do both (I am a portfolio landlord). Where available, the pension wrapper is so attractive for higher rate tax payers against buy to let where you have to pay tax on before interest profits. In a nutshell to invest in buy to let it is my view that you have to be either highly skilled, have a lower rate of marginal tax or possess some other compelling edge. I am even building a website that I believe will demonstrate this to all but the most die hard of landlords. Let me know if you would be willing to take a look...
Hi Andrew, thanks for watching. Sure, I'll have a look at the website, sounds interesting. My view is exactly the same. It's not the that BTL cannot work, it's just a different world to what it was. 👍
Absolutely, although you'd be a lot more leveraged on risk and have to factor into the income calcs interest payments as well as the capital if you took out a repayment mortgage. So many variables! 🤓 Thanks for watching and commenting Giles, appreciated! 👍
Property people will always say property wins due to leverage. Financial advisors will always put property down as they don't make money from selling to property investors. If you can afford it do both. But learn the law, join the NRLA and self manage.
They both can be good sources of wealth building but need to be assessed carefully on their own merits and relative to an individual's circumstances. Hopefully as the video showed there are many areas to consider! Cheers for watching.
Agree with all your downsides to buy-to-let. But one's own home? Free from capital gains etc. And you get somewhere to live. It is an old adage that you make your profit when you buy, not when you sell. So build it. Massive saving on - - stamp duty (only on the land value) - labour (workmen's income is taxable, and paid from your taxed income - double hit) - builder's profit etc. Your efforts are not taxed. Not then, or later. Make sure it has a lettable annex. Which is not separately council taxed. Rentable at a good rate with minimum costs. Pays all the running costs, so you live cost free. Did this, and downsized after 35 years. Profit was more than I earned in those 35 years. So, a year or two working every hour to do it, then cost free living for the rest of your life and a very decent pension pot- which yields tax free income (unlike a pension). I recommend it.
Absolutely! Definitely agree that CGT exemption as-well as the utility of your own property makes perfect sense. This video was more on the comparison between a separate BTL to fund retirement. I am absolutely terrible at DIY (my fiance will never let me forget 😊) so building something myself is going to be a stretch but definitely big savings to be had for those who are good at it!
@@PrinciplesPersonalFinance We all enter this world being unable to do a host of things. We cannot speak, never mind read or write. Everything is learned. Learning to make things with your hands is not hard compared to many other things. I always say that the difference between an expert and an beginner is speed- the expert can do it faster. With the proviso that some things cannot be done slowly- flying an aircraft, or plastering for example. And slow music sounds terrible. Being 'bad at DIY' is socially acceptable, it would appear. People are happy to declare being bad at maths, but never at reading. Such social norms are counter-productive. I cannot play a piano- but probably could if I spent the time on it. Little story- an electrician wants some plumbing done, for which the plumber wants £100, so has to charge £200 (the rest will go to tax, etc.) The plumber wants some electrical work, to the same value. If they pay, they each get £100, having started with £400 ( half of their money went in tax too.) So, £100 each, and the taxman gets £600. Or they can just shake hands... So, make it yourself and it costs one quarter the price. Building a house does not require esoteric skills- we basically still do it the way the Romans did. Brick on brick, with a tiled roof. Plumbing used to involve lead, heat, gaskets, and other arcane things. Today you push pieces of plastic together. It is all amazingly simple.
I have a few friends with property they rent. And they all tell me what it's worth. But non of them say much about maintenance cost, potential bad tenants and filling in tax returns. Where as I have a workplace pension and a private pension which I pay into every month. And it's stress free compared to rental properties. Just remember your pension is not going to call you on a cold wet Sunday night, to say the boiler has broken down 😮😮😮😂😂😂
Live off the rental income and contribute the equivalent amount of your salary (if working) into your workplace pension. Very powerful, especially via salary sacrifice 🙌
@@martinmiller6568 absolutely! Although there are some rules to watch out for on reducing a salary beyond a minimum amount. Beyond that though, as you say, potentially a very powerful strategy for the right circumstances! Cheers for watching 👍
You'd be hard pushed for those figures and congratulations. Circumstances and outcomes though will always vary. As the video mentions, the aim of the video isn't to say property can't perform well, or to say there is a binary one or the other. It's just to highlight the different considerations.
@@PrinciplesPersonalFinance thank you. I'd like to increase yields by utilising finance or moving to HMO properties but I'm not there yet. You're a financial advisor? I'd like your thoughts. I live near an area where some high yield properties appear from time to time. From your perspective would it be wise for me to one day consider setting up a property business where I help others to manage and build their own portfolio or would it be better to just borrow and build up a company portfolio? I heard that only commercial property can be put in a pension but is there some way to also put residential property into a pension? Perhaps using a trust or limited company? Can I put my own limited company into a pension?
With a pension the company decides how much you are paid you can’t get most of the money until you are 67 you would have to live to 87 until you get everything you have paid into it
![FNAF vs TF2 - Episode 2 [SFM]](http://i.ytimg.com/vi/z5b3V2-VLb0/mqdefault.jpg)
The biggest thing for me between properties and pensions is that you can get an income now rather than when you are 57 or later. It puts you in control to make decisions.
I am 46 and my other half is 50 and we have three properties which we let out. We actually live in the cheapest property we own… 😂 We are currently discussing / calculating if she can stop work in 3 years and myself in 5.
If all of our money was in pensions we could not do this. Thought I would raise this as it was a point not discussed. 👍
Yes, that is a fair point. There is the optimality of income there. I was using it through the lens of the either/or for retirement but you're right there is the other pre-retirement angle.
Great input here and thanks for watching. 👍
That intro hahaha - It's a TAX WRAPPER!!
🙃the standard response! Cheers for watching Toby 👊
Food for thought “ thank you for your time making this video
Thanks, appreciate you watching and your support! 🙏
If you can manage property yourself then it'd be a lot better... Thank you for information.
Yes, absolutely. I think the thing with property which does really change the dynamic is competency with renovations and being able to do that personally. Some of the most successful property investors I know have been brilliant at being able to do a lot of that themselves which saves a fortune in professional/builder/decorator etc costs...... that said. the comment on the 'advantage of leverage' in a world of rising rates is going to need a re-assessment.
Real world property instead of pension. It worked for me however I maintain and manage. Plus I bought my properties when I was young and prices were not as inflated as now.
Good stuff 👏. In my view while property can definitely still work for those who are well informed and prepared. Just that the glory days of BTL portfolios has truly ended. Prices, yield, tax changes. It's not an easy market to get into!
Thanks for watching. 👍
Simon, just came across this excellent video today. My wife an I do both (I am a portfolio landlord). Where available, the pension wrapper is so attractive for higher rate tax payers against buy to let where you have to pay tax on before interest profits. In a nutshell to invest in buy to let it is my view that you have to be either highly skilled, have a lower rate of marginal tax or possess some other compelling edge. I am even building a website that I believe will demonstrate this to all but the most die hard of landlords. Let me know if you would be willing to take a look...
Sorry, George!
Hi Andrew, thanks for watching. Sure, I'll have a look at the website, sounds interesting.
My view is exactly the same. It's not the that BTL cannot work, it's just a different world to what it was. 👍
What if you bought 2 properties using a mortgage? Very different capital appreciation figures then!
Absolutely, although you'd be a lot more leveraged on risk and have to factor into the income calcs interest payments as well as the capital if you took out a repayment mortgage. So many variables! 🤓 Thanks for watching and commenting Giles, appreciated! 👍
Property people will always say property wins due to leverage. Financial advisors will always put property down as they don't make money from selling to property investors.
If you can afford it do both. But learn the law, join the NRLA and self manage.
They both can be good sources of wealth building but need to be assessed carefully on their own merits and relative to an individual's circumstances. Hopefully as the video showed there are many areas to consider! Cheers for watching.
Agree with all your downsides to buy-to-let. But one's own home? Free from capital gains etc. And you get somewhere to live. It is an old adage that you make your profit when you buy, not when you sell. So build it. Massive saving on -
- stamp duty (only on the land value)
- labour (workmen's income is taxable, and paid from your taxed income - double hit)
- builder's profit etc.
Your efforts are not taxed. Not then, or later.
Make sure it has a lettable annex. Which is not separately council taxed. Rentable at a good rate with minimum costs. Pays all the running costs, so you live cost free.
Did this, and downsized after 35 years. Profit was more than I earned in those 35 years.
So, a year or two working every hour to do it, then cost free living for the rest of your life and a very decent pension pot- which yields tax free income (unlike a pension). I recommend it.
Absolutely! Definitely agree that CGT exemption as-well as the utility of your own property makes perfect sense. This video was more on the comparison between a separate BTL to fund retirement. I am absolutely terrible at DIY (my fiance will never let me forget 😊) so building something myself is going to be a stretch but definitely big savings to be had for those who are good at it!
@@PrinciplesPersonalFinance We all enter this world being unable to do a host of things. We cannot speak, never mind read or write. Everything is learned. Learning to make things with your hands is not hard compared to many other things. I always say that the difference between an expert and an beginner is speed- the expert can do it faster. With the proviso that some things cannot be done slowly- flying an aircraft, or plastering for example. And slow music sounds terrible.
Being 'bad at DIY' is socially acceptable, it would appear. People are happy to declare being bad at maths, but never at reading. Such social norms are counter-productive. I cannot play a piano- but probably could if I spent the time on it.
Little story- an electrician wants some plumbing done, for which the plumber wants £100, so has to charge £200 (the rest will go to tax, etc.) The plumber wants some electrical work, to the same value. If they pay, they each get £100, having started with £400 ( half of their money went in tax too.) So, £100 each, and the taxman gets £600. Or they can just shake hands...
So, make it yourself and it costs one quarter the price.
Building a house does not require esoteric skills- we basically still do it the way the Romans did. Brick on brick, with a tiled roof. Plumbing used to involve lead, heat, gaskets, and other arcane things. Today you push pieces of plastic together. It is all amazingly simple.
I have a few friends with property they rent. And they all tell me what it's worth. But non of them say much about maintenance cost, potential bad tenants and filling in tax returns. Where as I have a workplace pension and a private pension which I pay into every month. And it's stress free compared to rental properties. Just remember your pension is not going to call you on a cold wet Sunday night, to say the boiler has broken down 😮😮😮😂😂😂
100% 🙌
Yeah but you are at mercy of the pension age. Property can allow you to retire early
Do Both
A good option if you can fund it!
Live off the rental income and contribute the equivalent amount of your salary (if working) into your workplace pension. Very powerful, especially via salary sacrifice 🙌
@@martinmiller6568 absolutely! Although there are some rules to watch out for on reducing a salary beyond a minimum amount. Beyond that though, as you say, potentially a very powerful strategy for the right circumstances! Cheers for watching 👍
My property yields over 10% average. Can I find a pension that will outperform that reliably?
You'd be hard pushed for those figures and congratulations. Circumstances and outcomes though will always vary. As the video mentions, the aim of the video isn't to say property can't perform well, or to say there is a binary one or the other. It's just to highlight the different considerations.
@@PrinciplesPersonalFinance thank you. I'd like to increase yields by utilising finance or moving to HMO properties but I'm not there yet.
You're a financial advisor? I'd like your thoughts. I live near an area where some high yield properties appear from time to time. From your perspective would it be wise for me to one day consider setting up a property business where I help others to manage and build their own portfolio or would it be better to just borrow and build up a company portfolio? I heard that only commercial property can be put in a pension but is there some way to also put residential property into a pension? Perhaps using a trust or limited company? Can I put my own limited company into a pension?
it takes one bad tenets to ruin your whole pension plans and life saving .
It certainly is a risk to be wary of! Thanks for watching! 🙌
@@PrinciplesPersonalFinance thanks i subscribed to your channel , great content
@@ahmedalsharman Thank you, appreciate your support 🙌
With a pension the company decides how much you are paid you can’t get most of the money until you are 67 you would have to live to 87 until you get everything you have paid into it
You may never get to see the money if you die with a pension