Ann, you’re kind of proving my point that people do BTL not because it’s a good idea but because property is all they know. Which gives the reason why they do it if unadvised, but doesn’t mean they should be advised to do it.
The amount of financial literacy you need to buy a worldwide index tracker is about 1% of the financial literacy you need to buy a BTL property. The very fact that your post talks about people buying flats without really having analysed the transaction doesn’t show you don’t need financial literacy to do BTL, it just shows that people are doing it naively. Again, I would not advise people to make a large financial commitment unadvisedly.
You also exhibit a lot of the classic confused statements about other elements of equity investment (like referring to “bricks and mortar” and the Maxwell fraud — companies are also real world entities, and the Maxwell fraud was absolutely nothing to do with equity investment). But I think arguing about individual fallacies is a distraction from this thread and what Cloo should do. The key point is really that naive investment doesn’t become a good idea just because you haven’t analysed it or understood the alternatives.
Well, yes, quite. Because I was actually agreeing with you.
You seem to have misunderstood my post. You seem to think that I was disagreeing with you. I wasn't.
You seem to have misunderstood my comment about people's naivety re getting into BTLs as somehow that means I'm advocating anyone can do it because they don't need to know what they're doing. That's not what I was getting at, at all. It's actually horrifying, the number of amateur landlords who have an almost total lack of knowledge as to what their legal and financial responsibilities are and what their tenant's rights are.
You seem to be stating that you wouldn't advise people to do that, ie get a BTL, as if you're contradicting my advice to do so.
You seem to have misunderstood and thought I'm advising Cloo to buy a BTL or something? Because I haven't done anything of the sort.
I didn't advise anyone to do so. I was simply making observations, about people's motivations, ie distrust of corporations and financial institutions, and also some people's failures to properly research what they're getting into.
Your post seemed to be along the lines of BTLs are bad, why on earth would someone do that when there are other better options like xyz available?
So I was explaining the mentality and thought processes of how and why people got into BTL, and how historically, for many people, buying a BTL was perceived to be 'as safe as houses' whereas many people have felt increasingly reluctant to rely on their company pension in retirement (fraud, as mentioned, erosion of final salary schemes), plus the other factors such as financial institutions going bust, companies going bust and share certificates becoming worthless, etc.
I wasn't confusing Maxwell with equities, I clearly referenced it as a problem regarding pensions, because it and other pensions fraud/collapse cases caused many people to feel like they can't necessarily trust/rely 100 per cent on company pensions, so they wanted to invest in something tangible and which they thought they understood - and, yes, of course, understanding the superficial aspects of buying a property and getting rental income and benefiting in the long run from increased house prices isn't the same as people doing their research and, as mentioned, understanding all their legal obligations and tenants rights.
But for the avoidance of doubt, again, no I wasn't suggesting or advising Cloo or anyone else to buy a BTL.
