Pay off Mortgage v Invest in Buy to rent

Slimpickings_2

Hi,
I am due to get around 50k inheritance, should I pay off part of my mortgage which is 150k on a house worth around 400k. Or should I buy a house to let out

jamesd

Buying and letting out may be quite a good idea at the time that you think the market is near the bottom. You must check the rental market the property is in to ensure that tenants are readily available because in some areas there is a huge excess supply of rental properties.

Now is also likely to be a good time for gradual investing in the stock markets over the next year or two if you have a five year plus view.

Slimpickings_2

Thanks for the advice, I'll start researching now

Jonbvn

Have a look at some recent news regarding BTL and decide for yourself.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/3479472/Lenders-can-seize-buy-to-let-properties-without-court-orders-CML-warns.html

http://www.telegraph.co.uk/finance/personalfinance/borrowing/3472278/Up-to-40pc-of-buy-to-let-borrowers-face-negative-equity.html

http://www.telegraph.co.uk/finance/personalfinance/investing/3476362/Buy-to-let-rents-begin-to-fall.html

The key is getting the numbers to work, to ensure you get an income from BTL (i.e. +ve yield). You cannot rely on house prices to increase for the foreseeable future as a means of making money.