Becoming a landlord was a loony idea – I should have invested in shares
I’m sure I wasn’t alone in my surprise to hear that loads of prisoners are being released early. My first thought was, “where will they live?” Budget hotels seem to have become the de facto choice for governments when trying to house lots of people they didn’t expect to house.
In fact, it was only last month that councils in England said they had spent over £1bn on temporary accommodation for homeless families in the last year – a figure 50pc higher than the year before.
And so I found myself on the Fidelity Investment website looking up hotel share prices.
IHG (Intercontinental Hotels Group) was the one that caught my eye. You may not be familiar with the holding group name, but you’ll likely know some of their brands like Holiday Inn or Crowne Plaza.
Well, blow me down, if ever I wished I could turn back time and make a different investment then IHG was it.
In the past 10 years its share price has soared 215pc. We talk about house price inflation, but even the buoyant post-Covid, get-me-to-the-country-now price increase was nowhere near that amount. In the past five years IHG has delivered a 49pc increase, and in the past year alone it is up 25pc.
Compare that against house prices, and investing in real estate looks like a real loony decision. The latest ONS figures show average UK house prices decreased by 1.4pc in the 12 months to December 2023. Of course, time is a great healer, and I can report average property prices in England increased by 76pc in the last decade.
But that’s not 215pc, is it?
There’s more to this than just stellar performance, because the other real biggie with investing in IHG shares is that I could have done it in an Isa or pension tax-free wrapper. That means I could have invested £20,000 every year for the past 10 years, made copious gains and not paid a penny of capital gains tax.
That is not the case with any of the properties I own.
In fact, right now, I have no clue of the sales I’ve currently agreed to, whether I will be paying the top rate capital gains tax of 24pc or some other fictitious number Labour happen to spring out of their magical hat.
The other thing about my not investing in IHG is the barriers to selling. If I’d owned those shares, I could have – in a millisecond – sold them and got the dosh.
Click here to view this content.
There would have been no messing about with Section 21 (soon to be abolished), waiting around for months or years for a court to hear my case to sell an illiquid property. Nor would I have had to pay tax on income I didn’t even earn (thank you Section 24). I also wouldn’t have had to keep up with the multitudinous ever-changing regulations in order to rent my property.
I wouldn’t have had to pay for EPC testing, gas safety testing, electrical testing, fire alarm testing and compliance checks for my letting agents. I wouldn’t have had to answer questions about why there is a damp patch half-way up the internal wall (still on-going), I wouldn’t have had to wonder why the new tap (having been replaced for the umpteenth time) is still leaking. And I wouldn’t have had to worry about what new things Labour is going to bring in, and if I can even survive.
In a nutshell, dear reader, I wish I’d invested in IHG.
Email your thoughts and questions to secretlandlord@telegraph.co.uk