What to do with 25k

ManicMum

Hello

just wondered if anyone had any ideas on how to make 25k grow! I've got several children and time is a scarce commodity for me so your help is very much appreciated. I

I thought about buying a caravan and renting it out, though that's a asset that will depreciate. I live in area of the country which is cheap for property so thought about getting a flat (1 bedders start from about 25k in less desirable area) and renting it out or doing it up to sell on (though may not be so easy in this financial climate). Wouldn't want to spend all the money on the flat though as need to keep some back so would be taking on a loan or mortgage. Would just be funding a deposit there.

Does anyone have any other money making schemes? Savings paying such crap rates so looking for other ideas.

cheers moneysavers.

nobby24

Have you thought about Premium Bonds, if time is a scarce commodity you don't want to be sorting out rented accommodation which can be a hassle.

00ec25

going to be negative here!
PROPERTY RENTING
do you know anything about being a landlord? It can be quite time consuming dealing with tenant problems, leaving aside all the legal responsibilities as well (and penalties you may have to pay if you get it wrong)

can you afford to pay a mortgage if no rent coming in for 2? 3? 6? months

PROPERTY DEVELOPMENT
how much money have you got for the "doing up"?do properties in your "less desirable area" require modern kitchen, bathroom, electrical wiring, central heating or just a lick of paint? (such work would cost thousands, and at a time of falling prices the costs of even a lick of paint may mean you make no profit when you sell.

how would you finance the costs?

do you have access to reliable tradesmen? who will manage them on site during the works?

INVESTMENTS
it might be boring but you may be safer(?) with a "traditional" investment in a managed fund eg. unit trust etc. (Have you maxed out your ISA?) Go to an IFA and get proper advice

rb10

nobby24 wrote: »

Have you thought about Premium Bonds, if time is a scarce commodity you don't want to be sorting out rented accommodation which can be a hassle.

The OP is looking for the money to grow in value, so Premium Bonds are not really a good option (unless they are a higher rate taxpayer and have used their full ISA allowance).

00ec25

nobby24 wrote: »

Have you thought about Premium Bonds, if time is a scarce commodity you don't want to be sorting out rented accommodation which can be a hassle.

seeing as the advice from Martin on the main MSE website is that you now have the lowest chance EVER of winning on prem bonds perhaps you should review this advice!

nobby24

00ec25 wrote: »

seeing as the advice from Martin on the main MSE website is that you now have the lowest chance EVER of winning on prem bonds perhaps you should review this advice!

Well obviously you will have the lowest chance ever because the amount of winners correlates to the interest rates, however it still might be worth a punt if she wishes to avoid savings accounts with crap interest rates.

Aegis

nobby24 wrote: »

Well obviously you will have the lowest chance ever because the amount of winners correlates to the interest rates, however it still might be worth a punt if she wishes to avoid savings accounts with crap interest rates.

Not very good for growth though... Unless she wins big, which is a really unlikely event.


See an IFA and ask for advice on putting together a growth portfolio with some of your cash.

Nosht

It really depends on your personal circumstances. If you want the money secure long term then would you put your trust into an IFA's hands? Remember it's your money they are advising you about, most are restricted to certain firms that pay them commission & most of the research you can do online.
If you buy property to let out do not sell it, ever. It will appreciate in value eventually.
You should have a Business Plan & some idea of the market.
Mortgages are easier to come by now but beware the cost of renovating. Even with the current lull in the market firms are pricey.
I buy on the concept that if I would like to live there then other people would too but treat it as a business, do research, find out rental values in the area & similar property prices & also whether you want to run it yourself (good software available at a price) or use an agent & lose about 10-15% of the rental.
It can entail a fair bit of work in setting up but can be very rewarding in the long term & with bricks & mortar. Only you know how you work, what time you have & your personal feelings so really only you can decide if this would be right for you.
Capital Gains Tax does not come into play until you sell (assuming that values have increased).
Have a look at different websites for more info.
In other words Do Your Own Research.


Regards,


N.

ricll

what does an IFA do that you can't do yourself with some study and research? I mean, is there something else they can do apart from giving advice?

Pee

An IFA, even the very best one, is unlikely to be able to help you more than a comprehensive study and thorough research of all aspects of this area. You have the advantage of really knowing what your future needs are - money for kids education, etc. Of course, that is a little time consuming... that's why you may prefer to have paid a professional to have done that bit.

By all means read up on the topic. Moneywise magazine is a good and very basic place to start. There is lots of info on the internet. And you want to make sure they are truly independent and discuss with you how to balance your investments, so that some can be accessed easily and some possibly exposed to the stock market.

dunstonh

what does an IFA do that you can't do yourself with some study and research? I mean, is there something else they can do apart from giving advice?

Knowledge, access to products you cant buy direct and access to software and research tools you arent going to pay for yourself. Along with time saving.

Whether you actually need to use one or not will depend on your own knowledge, experience and understanding.