Is this a good idea....?

TylerRiot

Hi, anyone's comments would be much appreciated!!

So, i live with my fiance and we have a joint income of approx £40K and currently rent a 3 bed house for £600 pcm.

Recently we have been given £50k as a deposit for a house but are not really keen on moving just yet (many reasons including having just moved in the last 6 months and also we live in an area we are not intending to settle in, plus i am doing a part time degree course and intend on changing career in 3 years). So various ideas have been toyed with but this is the one i'd like to put to you experts out there...

we raise a mortgage for 100K and buy a place to let for approx £150K in oxford, with a view to getting around £500-600pcm. Some friends recently bought a property like this with a guaranteed rent for 3 years that more than covered the mortgage and agent fees (clearly will look out for something like this, but may not find one). The time scale we had in mind would be approx 3-4 years over which we would be paying an interest only mortgage (hopefully fixed). At which point i our joint income should be significantly more than it is now. we then sell (hopefully for more than we bought it for) and what was £50K is now £60k?

hopefully this is clear.... as mud??

your input would be much appreciated....

Many thanks


Tyler

sm9ai

Not really that good an idea to be honest.

You would get a much better return elsewhere. A bank will give you 5%, 4% after tax. Which would give you £58,500 after 4 years. A little bit more by making use of ISA's. Stocks and Gold would probably give you a better return. Or perhaps a mixture of both. And you wouldn't have the hassle of waiting months/years to get you money back and if you go the bank interest route, then you won't have the possibility of loosing money