Investing in Property

Basically, my parents have been putting money away for my savings for most of my life, i want reveal how much, however I’m 17 right now and I dont want that money sitting in low interest bank accounts. Hence I’ve convinced my parents to let me use this money to invest in Property, obviously with a mortgage as well as i don’t have enough to buy an apartment outright. However, my question is should i buy an apartment in Liverpool city centre, using up my entire savings, with a huge mortgage for a 7-8% yield, or buy 2 apartments in warsaw for around 80-90% my savings with a yield of around 11% however with a less stable economy, and lower amount of renters, as around 75% of Poles are home owners? Btw i am Polish, hence would be there generally often and would employ a property manager regardless of where i buy

I looked into investing in buy-to-let property relatively recently and was put off by the high fees (stamp duty, conveyancing, mortgage fees and interest, maintenance, management fees, income tax +/- capital gains, etc). I couldn't justify the extra time, hassle and complexity when I could get a similar (or better) return investing in equities.

Over the long term you can expect a 7-10% return investing in global equities (with dividends reinvested), tax free if you use a S&S ISA, and with fees of 0.5% (or less) investing through a cheap platform like Vanguard.

The main 'benefit' of B2L is leverage, by taking out a mortgage you have the opportunity to amplify your returns in the long term (ie; 20+ years). However, bear in mind that this can also amplify your losses! Countless B2L landlords went bankrupt following the last economic crisis when the housing market collapsed and they struggled with occupancy.

Of the couple of successful B2L landlords I know, the majority focus on cheaper housing 'up North' where the yields are higher. They also have access to cheap or even free labour (ie; friends and family are tradesmen) to reduce the costs of maintenance and refurbishment, and have access to alternative income streams (ie; high paying unrelated job) for extra resistance to economic downturns.

Thanks for the advice, I have looked into equities, stock and share before but never fully considered them as my parents consider them too risky, to actively invest in. They would rather i invest in an index fund if I decided against property.

how would you recommend educating myself more about global equities, in order to make a uniformed decision that would hopefully be a good investment.

I hope to study physics at Uni, and then progress into a career in finance in the City

I'm a portfolio landlord. Here's some quick advice.
- B2L isn't as lucrative as it was before. Bear in mind:
- You will soon no longer be able to claim mortgage interest relief, which will hurt your profits greatly
- You will have to pay the higher rate surcharge of 3% when paying stamp duty
- Interest rates are on the rise
- You will have to pay income tax on your earnings
- Unless you want to be one of those uncaring and neglectful landlords, you will need to be quite hands-on with managing property:
- You should have some basic DIY skills or else have to rely on expensive tradespeople to do simple tasks which eat into profitability.
- You will need to be available in case you need to visit the property (unless you want to pay an agent who'll do that for you. Management fees are typically 7-10% of your gross rental income.)
- Estate agents won't fix your problems. They just act as a middleman and pass the problems back onto you or call an expensive tradesperson to deal with it
- You WILL deal with problem tenants. While on the whole I've had mostly reliable tenants. I've had my share of people seemingly trustworthy/creditworthy but they suddenly step out of or violate contractual agreements. They can run into financial difficulty, their job/family situation changes or they just want to disappear from the country without notice. Tentants will often be breaking things by mistake or neglect. Cause quarrels with other tenants, have poor cleaning habits, etc.

To summarise, being a landlord can be a headache a lot of the time. Profitability has been severely hampered as of late. To keep profitability:
- You may want to choose somewhere local where you can manage the property yourself instead of relying on an agent
- Improve your DIY skills. Much of the profitability depends on the price you pay for the property. It's far more profitable to buy a property that needs some minor work and do it up.
- Due to the high taxation, minimize your leverage. Being highly leveraged will result in more mortgage interest which you won't be able to claim as an expense. Personally I would aim for 60% LTV.

What do you mean by leveraged?