20K to invest in property

jessegee

My sister is 50years old, has 20k life savings, lives with mum as a carer and works part time

Is it possible to begin to invest in property or land/plot with only 20K?

The hope is to create enough money for her to buy her own place outright by the time she retires!

Any thoughts much appreciated, she really deserves a bit of guidance and luck, and did think about doing a property success course, but afraid they may be money making scams?

jessegee

Mutton_Geoff

I wouldn't risk my entire life savings on property but more importantly £20k won't buy you anything. The entry/exit costs of any land/property deal will eat up a large portion of that. With respect she is better off with a high interest savings account, or if she fancies a flutter, the premium bonds.

jessegee

thanks Geoff, I'm sure thats good adice, but can I ask, do you think buying a piece of land might be a good long term investment?
I have seen adverts for small plots without building permission, woodlands and meadows etc, some as a portion with a group of other buyers
Do you think its a safe investment?

jessegee

Mutton_Geoff

Do you think its a safe investment?

Not at all. I think many are a scam. Owner slices £10-50k plot up into loads of little pieces and sells each slice multiplying his investment by 10 or 100x. They will be virtually unsaleable again. Any plot with half a chance of future development will not be going for £20k but there will be plenty of opportunists there making millions out of people who think they can turn £20k into £200k by attaching it to the word "property".

PS Edited to say, this is purely a personal opinion (as are all my posts here!)

Premier_2

She has £20k today, about 1/5th of the amount required to buy even the cheapest of houses.

At todays prices, she would need at least about 5x that to buy a property when she retires in 10-15 years time.

No matter what you think the property market will do, even if you are crazy enough to believe prices might rise by that amount, then the £100k property today would be valued at £500k then, so she'd still only have 1/5th of the required money.

theGrinch

investing in anything is a bit like crossing the road. it depends where you do it.

also remember land and property are very illiquid assets.

jessegee

Thanks for your help everyone, thats good advice, portion plots dont sound right for us!

Its already in premium bonds, maybe luck will favour :rolleyes:

regards

jessegee

scrummy_mummy_2

Just a thought...some of the Guaranteed equity bonds that you can buy with some organisations at the minute look rather tasty....the Stroud and Swindon has a really good one (not advertised on the best buy tables, but ring a branch, there is one in Swindon!) and I believe the Yorkshire bank. Check out the best buy table on the motley fool website for ideas/guidance on www.fool.co.uk one would have to put the cash in and not touch it for several years but the rates in a normal investment account on the high street are pants and National Savings aren't a good long term 'returner' as described by martin himself!....I've had these bonds before (National savings do them too!) and I got a good return and your capital is guaranteed......

neverdespairgirl

jessegee wrote: »

thanks Geoff, I'm sure thats good adice, but can I ask, do you think buying a piece of land might be a good long term investment?
I have seen adverts for small plots without building permission, woodlands and meadows etc, some as a portion with a group of other buyers
Do you think its a safe investment?

jessegee

No, it's an absolutely terrible investment - they are often scams, and the rest of the time, just not worth the money. Steer clear!

Jonbvn

scrummy_mummy wrote: »

Just a thought...some of the Guaranteed equity bonds that you can buy with some organisations at the minute look rather tasty....the Stroud and Swindon has a really good one

Sorry to say but in general GEB are truely awful products and should be avoided. Their major drawback is that you do not get any dividends reinvested. AVOID! BTW the S&S GEB is based on the FTSE 100 - who knows where it will be in 4-years!

NS&I index linked savings certs are a far better product (tax-free & 100% guaranteed). BTW, Martin was referring to premium bonds not savings certificates.