Singing Pig

BUZZME:

LOL, perhaps with age comes wisdom, wisdom comes from years of experience, is that not how you became the wise of Landplanningassociates??, :-)

This is getting rather esoteric but NO, wisdom does not necessarily come with age. The only thing that necessarily comes with age (for most people) is getting older(!) and gradually more decrepit ! (I speak from experience !)

Nor does wisdom come from years of experience. (Many people gain years of experience, yet still have no wisdom.)And I also know plenty of people who are very intelligent but have no wisdom at all.

Wisdom is to some extent an acquired gift. It is very difficult to set out to gain it.It either comes naturally or it doesn't. One can gain knowledge and experience; how that knowledge and experience is APPLIED to situations is what determines the presence or absence of wisdom. We cannot really LEARN to be wise.

As for being "the wise of Land Planning Associates", that is something I have never claimed. I am, in all modesty, very knowledgeable about planning law, and also ignorant of many other subjects.

 Whether I always apply my planning law knowledge wisely is another matter on which "I could not possibly comment" !

BUZZME wrote   ""and on average AS says the property syndrome goes in circles maybe every 6 years..... then you go again and REMORTGAGE them all."

so if andy recommends remortgaging on a regular basis - where will the funds come from to pay the CGT when the property is sold ?  

clottie:

 

so if andy recommends remortgaging on a regular basis - where will the funds come from to pay the CGT when the property is sold ?  

Hi Clottie,

Couldn't resist answering this,

CGT does not enter the equation for the simple reason that the strategy is never to sell,never,ever,ever sell!

This is the core element in AS strategy and is also the part, most investors,find hard to get their heads around because it goes against the conventional way of investing. Why would you want to sell an asset?, and why would you want to pay tax when you can quite legally avoid it?

Never sell!!!....pure and simple!

Ok, now ask me the next obvious question

Cheers!

Bruce. 

there will come a point  when lenders will simply not allow a further remortgage as the rent/mortgage ratio will no longer stack up as lenders need higher LTVs as we are seeing right now

then what ?  

if you never ever sell and your kids inherit an estate they cannot manage financially   - how do they  deal with the Inheritance/CGT issue ?  

Clottie's clear inference - that this "never-ever-sell-and-keep-on-remortgaging" strategy is absolute Mickey Mouse philosophising and resides in cloud cuckooland - is absolutely correct.

It bears no relationship whatever to circumstances in the real world, and makes as much sense as telling Ethiopians to ignore the reality that they are starving, and just keep on eating and everything will turn out ok !

The fact is that house values are currently dropping fairly fast and pretty much everywhere now, whereas until quite recently it was patchy. (I wish I could say otherwise because my wife inherited a detached cottage in a quarter acre of countryside a couple of weeks ago and we are looking at having to sell it just as fast as we can get it cleared out. Instead of taking our time and dragging the process out in the knowledge that its value will go up £10,000 or more over the next 6 months, we are pretty sure we are going to be watching its value dropping by a similar amount, and nobody knows for how long. We might have to rent it out for a few years.)

The latest figures do not inspire any confidence in any remortgaging strategy. And, unless you bought the property some time back, you will probably not have SCOPE to remortgage anyway. Your borrowing is increasing against a dropping value ! The ability to incur further debt like that to convince yourself you are a property tycoon runs out sooner or later. And 6 years is a long time to scrape by if we have seen the start of the downturn of the so-called 6-year cycle.

Even assuming that you have elbow room to remortgage, you then need to find a lender who actually has the money available and is willing to send it your way.

And in any case, once your income from the property is not meeting your mortgage interest and other outgoings, you may have no decision to take because you will more than likely be forced to sell it, whether or not an ex-double glazing salesman tells you it is not a good strategy.

The strategy is nothing whatever to do with property profits, it is simply about trying to live off ever-increasing debt. And as always with such a policy, reality will catch up with you sooner or later, and in the current climate almost certainly sooner.

Landplanningassociates:

BUZZME:

LOL, perhaps with age comes wisdom, wisdom comes from years of experience, is that not how you became the wise of Landplanningassociates??, :-)

This is getting rather esoteric but NO, wisdom does not necessarily come with age. The only thing that necessarily comes with age (for most people) is getting older(!) and gradually more decrepit ! (I speak from experience !)

Nor does wisdom come from years of experience. (Many people gain years of experience, yet still have no wisdom.)And I also know plenty of people who are very intelligent but have no wisdom at all.

Wisdom is to some extent an acquired gift. It is very difficult to set out to gain it.It either comes naturally or it doesn't. One can gain knowledge and experience; how that knowledge and experience is APPLIED to situations is what determines the presence or absence of wisdom. We cannot really LEARN to be wise.

As for being "the wise of Land Planning Associates", that is something I have never claimed. I am, in all modesty, very knowledgeable about planning law, and also ignorant of many other subjects.

 Whether I always apply my planning law knowledge wisely is another matter on which "I could not possibly comment" !

indeed Trevor

knowlegde is knowing a tomato is a fruit, wisdom is knowing not to put it in a fruit salad

Rik

i know i posted this elsewhere this week   -   why do folks always ignore the difficult questions ???

"" there will come a point  when lenders will simply not allow a further remortgage as the rent/mortgage ratio will no longer stack up as lenders need higher LTVs as we are seeing right now

 
then what ?  

 if you never ever sell and your kids inherit an estate they cannot manage financially   - how do they  deal with the Inheritance/CGT issue ?

clottie:

i know i posted this elsewhere this week   -   why do folks always ignore the difficult questions ???

 

"" there will come a point  when lenders will simply not allow a further remortgage as the rent/mortgage ratio will no longer stack up as lenders need higher LTVs as we are seeing right now

 
then what ?  

 if you never ever sell and your kids inherit an estate they cannot manage financially   - how do they  deal with the Inheritance/CGT issue ?

 

LOL,LOL,LOL

This is not a difficult question,

As I said, CGT does not enter the equation,it is only payable IF you sell. When you die, CGT dies with you, check this out with your accountant.

As for inheritance tax, there are a number of strategies for mitigating this, but generally, your children will only pay tax on the equity left in the props when you transfer them over, so the trick is not to leave any equity in the prop.

As for LTV's, Yes you will still be able to remortgage, this is a long term strategy and property doubles in value roughly every 7 years, rents go up, money itself devalues due to inflation.

This whole strategy takes a while to get your head around, most people will never "get it".

I'm not going to go into any more detail on this, if you think it's rubbish then fine!, carry on as you are.

I'm not being nasty or anything, just trying to present an alternative way of investing,Which works!!! despite what you think. Ask the Duke of Westminster! His family have used this strategy for generations.

You have to think outside the box 

Less than 1% of investors fully understand the buy and hold strategy.

Wish you every success whatever you do,

Kind Regards,

Bruce.