My Mum has 100K to invest, is it best to buy property?

emmie

My Mum has recently inherited 100k from the sale of her deceased Mothers property.

My Mum (60) currently lives in rental property, which has limited security. This property also has two lots of very steep stairs which with her and her partners increasing age could potentially make this difficult to manage.

Have checked the house prices in her area, and she could buy outright a retirement flat, broadly speaking is this a good investment?

Her partner does NOT want to move (he is very set in his ways and doesn't like change). When I pointed out the stairs issue his reply was "we will face that when it happens"

Surely there is no better time to buy property, the house prices may fall further, but I would have thought on a 100k retirement flat, it isn't going to go much lower??

HELP

chesky369

Well, if it were me, I'd buy the retirement flat and dump the partner - but that's just me. Problem is, in the end we all do what we think is right for us personally, no matter what our friends and family think.

poppysarah

If she wants to use the money as income then obviously putting it into a home doesn't directly give her income but it reduces her outgoings as she won't be paying rent.

I think prices have a lot further to fall - but your mum shouldn't rush into any purchase right now unless she's prepared to be living somewhere that's worth less than she paid for it.

She should split the money up into two 50k sections and put them in separate banks and perhaps start looking at buying property but with no immediate rush needed.

The interest rates at the moment don't favour savers (darn this government) which seems very unfair. But weigh up interest off the money and cost of rent too.

If you're worried she might be tempted to fritter it away suggest she looks at 6 month bonds for her to put the money in.

Davesnave

Poppysarah's advice is very good. I think owning your own place is a good move for security in later life, but there is no rush about buying at the moment.

When your Mum is ready to retire, she will not necessarily benefit from having a large amount in the bank; it will depend on what she wants to do with it. Of course, some people like to go on world tours, receive private medical care, or whatever, but other just like it as a security blanket, which can work against them. My Dad found that he had too much to receive any help from social services, but he was too used to having it, wouldn't let it go and therefore ended-up paying for things that could have been free.

hoggums

Investment wise your safest option is to put 50K in 2 savings accounts and withdraw the interest payments. Any other type of investment is fraught with danger at the moment in the once in a lifetime financial tsunami that is going on.

With respect to the stairs - if they move to somewhere without stairs then they will lose their ability to climb them far more quickly. I personally think having stairs is a good thing because it keeps the ederly fitter and more mobile.

Premier_2

Is your mum really looking to 'invest' the money at her age? What does she plan to do with the results of the 'investment'? She can't take it with her.

Or wouldn't the comfort and safety of owning her own home more suited to their needs be more beneficial?

However, such a major purchase would need to be considered very carefully. She really needs to ensure that any property bought would be the place she would like to remain for the rest of her life as it may not be possible to move again due to financial contraints. The fact that her partner does not even want to move suggests that such a purchase may not be a good idea at present.

PasturesNew

If it were me right now, I'd bank the money as suggested above and spend the next 2-3 years making a big map of where retirement places are and evaluating each one of them. Look at the designs/locations and work out which particular unit/s I wanted. The perfect ones. Then wait and see if one of those perfect ones came on.

A perfect one in one block might be a ground floor, in another it might be a 2nd floor one as it has a balcony and views from higher up. Each block will be different.

I'd use the next 2-3 years to really research them all. Then look to buy.

The benefits of this type of housing is you're living with people "just like you" and there'll be a real sense of community as you're all going to be living there some time (well, that's the plan!).

A lot of these blocks even have a guest flat that can be booked/rented, ideal if one of the requirements is to have people to stay.

All maintenance etc is taken care of in the service charge and the resident warden being there is handy and makes it all more secure.

lynnexxxo

If I was your mum i'd book myself a fantastic holiday, possibly a world cruise, I'd then give my children a 'gift' of some money every year (under the taxable bracket).

I'd rather spend the money and give some to my kids than watch their 'inheritance' being sold to pay for my care home bills.

Davesnave

lynnexxxo wrote: »

If I was your mum i'd book myself a fantastic holiday, possibly a world cruise, I'd then give my children a 'gift' of some money every year (under the taxable bracket).

I'd rather spend the money and give some to my kids than watch their 'inheritance' being sold to pay for my care home bills.

That just proves everyone is different. Personally, I'd rather take a chance on the care home and keep my own roof over my head as long as possible.

.....And this lady is only 60, same as me, so I'm not appreciating everyone talking as if she's a geriatric. My Dad only stopped riding his racing bike when he got wobbly....at 89. I plan to improve on that!

hethmar

Wow, only 60 - younger than Cher, Helen Mirren and Tina Turner then - If she is still in good health I think mum ought to spend, spend and spend and do all the things she wants to do before she really does get old If worse comes to worse (she is only a couple of years older than me, I still run up and down stairs, truth be known, jump down the last three much to my OH's annoyance) she can always have one of those stair lifts fitted or move to a sheltered flat later on.

hethmar

chesky369 wrote: »

Well, if it were me, I'd buy the retirement flat and dump the partner - but that's just me. Problem is, in the end we all do what we think is right for us personally, no matter what our friends and family think.

If it were me, Id dump the partner and go on a world cruise without him:T