Tim Bennett Explains: Why buy to let is only for the brave

This week I explain why Buy-to-Let’s best years may be over for retail investors.

[@ForTheLandlords]

Great video Tim. The less people chasing Buy To Let, the more Buy to Let for me!

[@greigsanderson9673]

The brave become tomorrow's rich.

[@jd00313]

I'm glad this video exists because there are so many amateur buy to let 'investors' out there who are looking to get rich quick and don't really know what they're doing, or don't/can't find deals that could weather changes in interest rates etc. Those people don't do enough research which is the difference between a good and bad investment

[@hendrikjanssen9075]

I am Dutch and have been enjoying your videos for a long time. Overhere I can tell of about at least 10 different UK house shows that were aired on Dutch TV. Looking from abroad it the UK got obsessed with housing during the last 20 years. I agree with your conclusion. I also agree with the measures taken by the previous government. The best thing would be to kick start house building.

[@stancollins4407]

Really enjoyed listening to that Tim. Its really nice to see out of all these get rich quick schemes (which helped to create the bubble we found ourselves in the first place) there are fortunately some people like yourself out there willing to talk a bit of common sense. Thanks, Stan

[@darkbyte2005]

Brilliant explanation..thanks

[@mstitou3149]

First of all this video is clearly biased as it comes from someone employed by a portfolio management company to make these educational videos, so their aim is to convince you that you're better off investing in the stock market - and ideally getting the advice of Killik. Second, the argument that now is no longer a good time to invest in real estate (or, as he writes in the comments here, that the real estate bull market is over), totally contradicts the argument made by Mr Bennett in his videos on the stock market, where he always says that it's impossible to time the market, and what counts is to stay invested for a long time. One can claim that the same s true for BTL. Third, having invested in BTL and in the stock market, I certainly don't believe that BTL is for 'the brave' and the stock market is easier. The hard thing in BTL is to select good tenants, and have a number of reliable workers for repairs. Then you have a steady income and the property appreciating (over long stretches of time - there will be draw downs in property prices as there are in the stock market) with hardly anything to do. Fourth, the fact that real estate investments are less liquid than investments in stocks is a very good thing for many people, as it helps them avoid the behavioural biases of selling at the wrong time and trading too often, which is what studies show that many people tend to do in the stock market ending up loosing money (though I guess Mr Bennett's argument would be that you will avoid these behavioural biases if you hire Killik to manage your money for you).

[@mstitou3149]

Thanks for your answer. Concerning the calculations you did with your wife, since markets are non ergodic in order to meaningfully compare their returns to BTL one would need back-tests of many decades (Kenneth French once said that 78 years might not be enough to separate noise from meaningful results). But my main point is that BTL is really not a hassle at all and is probaby the easier option for many (most?) folks out there. The one thing you have to be careful about is selecting good tenants. It helps if you have good workers for repairs; otherwise there are websites that help you find them and since you rate them online they will be usually motivated to do a good job.

[@mstitou3149]

Choosing the shares is very difficult, as e.g. this paper demonstrates papers.ssrn.com/sol3/papers.cfm?abstract_id=2900447 Choosing an actively managed fund is not easy, there are many pitfalls to avoid - people often invest in funds that have recently outperformed their peers and studies show that these funds are more likely than not to underperform in the future. If you buy ETFs what geographical allocation do you choose? Do you go e.g. for value, momentum, min variance, or simply a market cap weighted ETF? Most people who do stock picking or even buy Etfs tend to underperform the market by a lot due to excessive trading, and a number of behavioural biases that are exploited by more sophisticated investors. In comparison buy to let is easier in my opinion.

[@bennimonsta]

Great video. If only the mainstream media were promoting this message. I am still seeing Homes under the Hammer as the gospel for amateur BTLers and am worried many may be in for a rude awakening soon.

[@lmstuber6044]

I was just about to buy my first buy to let and these rules come out,I think the government try every witch way thay can to bleed people in this country of there money, every other week thay come up with a new rule to extract money out of people thay won't you to stay in that bracket of work work work pay taxes ,gutted this rule has just come in,glad I new about it before I did buy a buy to let, good video

[@xxxx5010]

bennimonsta no offence but if anyone believes that Homes Under the Hammer is 100% legit and that it's so easy to buy properties and sell them on or rent them out then good luck trying to survive in such a cutthroat and unforgiving business

[@fatherofsnipers]

Informative!

[@herrowbirry]

Been watching your videos since I was in school

[@davidbarker7580]

Great video. But it would be good to put comparison for when stock markets are manipulated with people's retirement savings and all is lost. I remember maxwell and others ran off with your pensions. Stocks & shares are manipulated by a handful of people.

[@rokonto]

thanks

[@leonhenry4861]

don't forget buy-to-let is a long term investment. This concentrates on the market now not in 15-25 years time.

[@westbrit4714]

The analysis seems to ignore London ,I have made more profit since 2007 then between 2000 and 2007 . This clip is being put out by a stock broker, I would treat with caution some points are valid like the Government hostility and the lack of further uplift potential , but other ways of holding money are showing little return and you can gear up with a fairly long term mortgage at very cheap rates now

[@MrKristian1974]

A nice bit of scare mongering! “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” Warren Buffett.

[@MrKristian1974]

Agreed about the no place for amateurs any more, thats the bit I like. The amateurs are selling off their portfolio's, there is still a large demand and Interest rates are not guaranteed to rise, in fact many predict no rises for a few years. The savy investor within a LTD company framework with the right strategies (including long term growth and inflation eroding debt) will be happy!!! I'm happy! But I do worry about the masses of people who can't, and never will be able to get their own property, the demand for rental accommodation, in all forms is increasingly in demand, I wonder if that will drive rental prices up?!

[@ForTheLandlords]

A rising tide floats all boats. I think the time of the amateur might be over, but that's why we didn't stop at 600 properties ;)

[@Michael-4]

This popped up today on my feed and was agreeing with him until a picture of George Osborne came up and then I looked at the date the video was made. He's probably right but unless you have a crystal ball the question as always is.... When? and usually the answer is always... soon.

[@thisisbob1001]

Good. That why houses are so expensive and young people can't afford them.

[@greigsanderson9673]

Interest rates will stay the same, or become lower for the next 5 yrs in the uk.

[@crunch9876]

Greiguci Wootchie is that because of brexit?

[@greigsanderson9673]

crunch9876 Yes sir. Although I have changed my mind. A rate increase will be 2018/19.

[@coogee126]

hahaha.. thanks for the fearful talk. all i can say is " be greedy when others are fearful."

[@I-am-not-a-number]

Well, 2 years on and you were wrong about interest rates and house prices.

[@KillikFinanceVideos]

In real post-inflation terms (the only way to correctly measure prices IMO), prices have been falling gently for some time and quite hard in both nominal and real terms in certain parts of the market (e.g. 1-2 bed flats in SW11, where I live). So not sure about your comment on prices. As for interest rates, they have come off historic lows (a little) but the timing and size of future moves remains uncertain for sure. Fixed rates on mortgages have drifted up slightly on where they were when I released the video so not sure that makes me all that "wrong" on that score?

[@user-tr9jo1ku6t]

This video has just ruined my dream

[@adjustedfx2502]

Is it not still possible to obtain the property below market value then flip it after renovate for say as an example 20-30k profit over a shorter space of time and rinse and repeat with buy to let? And maybe have less as rented properties? @Killik & Co

[@ivandrago8299]

Adjusted FX if you have the cash to buy them yes. Not many lenders will give you a mortgage on a ruin.

[@fix-and-drive-diy-repairs]

its a gamble which can turn so painful, I would rather save money for my kids to go to University.

[@londonshaf]

Trust me dont let it, whilst he is correct with the facts, property is for the LONG term and this video focuses on the NOW too much. It may be difficult now but theres no way I would let it stop me investing in property unless it was costing me every month.

[@scarboroughrider]

This is rubbish. I've been in property since age 22. I'm 42 now, I'm very well off and when I retire age 60 I'm going to be even wealthier. Property is no quick money making scheme. Buying now, forget all this bull scaring tactics your using. Be smart not stupid and do nothing. This video serves no purpose to investors.

[@scarboroughrider]

Killik & Co thanks for the reply tim. Ok ok, here's my advice. Buy a property today, Tommor or next week. Regardless of any of the above you suggest with regards forecasts etc only points one way IMO. Statistically which I'm sure are words you will like doubles every ten years since records began. Seriously buy a property now and come back in twenty years and regardless of economic forecasts etc I'm sure you'll be a happy man. Honest.

[@hendrikjanssen9075]

Rob Tomlinson I think the current valuation of property in Western Europe is very high. So it might not be as good as an investment as 25 years ago when interest rates were higher and valuations lower. We might also go from a period of low interest rates (and inflation) to (even if it is slightly) higher interest rates. The benefit of property is that you can leverage. The negative is that you can focus on only one market (real estate in your case in the UK). With shares you can invest anywhere where valuations are low (I choose to invest in Russia and Brazil early 2016). Also an house is an investment in pounds (for which you could buy a lot of euro real estate a year ago). On the other hand since the UK government is effectively not building houses (issuing permits), even with low population growth you might not get a bad deal.

[@frusciantesplectrum7980]

I love it when everyone is scared to invest... it’s usually the most profitable times... let’s be frank... on a internet only.. you will always be fine. When landlords start selling along with the shortage of houses, the next government will rely on the private landlords again, prices go up and tax will be generous to encourage landlords.

[@adismell]

Why not just invest in shares? Much more profitable, and no more risky.

[@adgepeterb]

This guy is talking alot of 'IFs' and 'MAYs'.. Don't let this guy talk you out of this

[@ForTheLandlords]

Correct. There's always risk with any investment and it pays to understand it

[@ivandrago8299]

Meh. Who Dares Wins.