I didn’t know much about investing, and looking back I had a mistrust of stocks and shares because I didn’t really understand them. I see this with Wren Sterling’s clients now and I understand why it might put you off. It was only when I became a financial adviser that I understood them, and that they were not something to be afraid of.
If I’d been a financial adviser, and known then what I know now, I would have focused on my pension sooner, and my investments too. But back then I had my plan. I wanted to buy three properties to generate income to help me pay for my mortgage, one for my car, and one for just a bit of spending money. Now I have a more balanced portfolio that aligns to my long term objectives, I invest in equities, and maximise my pension, as well as looking after the properties I have.
I don’t regret my choices, but I found that property can be volatile. There were a few times when I thought I would lose everything because I had invested so heavily in property. After the crash in 2008/9, the market was flooded with new builds, and it was very difficult to let properties. I had four empty properties at the same time. I managed to get through it, but it was a very scary time – because as an adviser I can’t go into arrears. If that happened I could lose my job. You must be on top of your own finances if you want to work in this industry.
I’ve had to react to changes (outlined in our article from John Charcol) over the past few years. These changes have encouraged me to consolidate my portfolio and grow more organically, rather than aggressively buying new properties. The tax changes have forced me to go into a limited company structure, which I wouldn’t have done otherwise.
This has taken time to plan with my accountant, and it’s been expensive. As a higher rate tax payer, the tax changes would have meant that I’d be £12,000 worse off a year and that’s without even making a profit. By being incorporated I won’t be penalised for additional tax on the interest, and my profit will be considered rather than my income. But as a limited company the cost of borrowing is higher so it wasn’t an easy decision to make.
If you’re investing in property, a financial adviser wouldn’t be able to help you with your property portfolio. For those queries, you’d need to talk to a mortgage adviser, like those at John Charcol. But if you don’t want the responsibilities that come with being a landlord and are thinking about alternative methods to grow your wealth, or want to discuss your inheritance tax liability, we can help.
How can a financial adviser help landlords?
1. Find routes to your financial goals
If you don’t want to sell your properties but have financial goals that you want to achieve and can’t see how to reach them, a financial adviser may be able to help. We can review your whole financial situation and create a plan that will help you reach your goals. We’ll discuss any debts and assets, consider your attitude to risk, and any life events coming up where you might need your funds. We’ll recommend a plan and highlight the choices that could leave you better or worse off in the long run. We can help you put your plan into place and offer regular reviews to make sure that everything is working as it should.
2. Do more with your cash
Let’s say you’ve received an inheritance or have just downsized and want to do the best you can with that money. Or perhaps you’ve paid off your mortgage, and now have an extra £500, £600 a month. You could invest these funds, rather than leaving them in a bank account. At these times you could benefit from speaking to a financial adviser as different investments can achieve different things, not only growing your money, providing you income, saving for retirement or for education.
3. Discover alternative investment methods
If you’d like to move away from managing a property portfolio, there are other ways to invest. Talking to a Wren Sterling adviser can help you discover which options might be suitable for you, to maintain the value of that money, or draw an income – and you don’t have to say goodbye to property entirely. If you like investing in bricks and mortar but no longer wish to be a landlord, it is still possible to have an exposure to property through investments because depending on the fund you choose, some of the money may be invested in property.
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The Financial Conduct Authority does not regulate taxation and trust advice.
Your home or property may be repossessed if you do no keep up repayments on you mortgage. The Financial Conduct Authority does not regulate some aspects of buy-to-let mortgages.
As property is a specialist sector it can be volatile in adverse market conditions, there could be delays in realising the investment. Property valuation is a matter of judgement by an independent Valuer therefore it is generally a matter of opinion rather than fact.