Money to invest

Diamond1

:question:Hi all,

I'd like some input as I'm in a bit of a quandry. I will be selling a flat shortly and will have roughly £75,000 from the sale. I don't have a pension so need to use/invest this money wisely but I'm not sure which way to go on this. PS I am 56.

Option 1 - I have thought of buying a property that needs a refurb and hope to make a profit on it, then do another on up and so on. I have contacts in the construction industry ect so would have people I know I can trust and who are professionals.

Option 2 - Buy to let. Not sure about this one as I think could be quite involved but would go through a Letting Agent if I decide to go down this avenue.

Option 3 - I live in a Housing Association property, 2 bed detached, but very small and am entitled to a 26% discount on the valuation price. This is a good buy but of course would mean my money from the sale of the flat would go towards the deposit on this and I would have to get a small mortgage as well.

So, a bit of a dilema. What to do? I would appreciate any advice.

Thanks

gozomark

how much of your capital can you afford to lose, and when are you likely to require it to live on ?

Diamond1

Hi there. Well to be honest that amount is it and all I will have to use so of course can't afford to lose anything ideally. As I have no pension, only the state pension will be available to me. I will be 57 in April so getting close to retirement age :-( but think I will have to continue to work if I can until I'm 70. Another :-(.

G_M

Options 1 & 2 start out the same: buy a property to do up, then look at its market value and the rental market and decide at that point whether to sell or to rent it.

With each of those options you potentially gain an income to supplement your pension in the years ahead.

Option 3 - how would the mortgage repayments compare with your current rent? You'd be saddling yourself with 25 years of mortgage. But of course if its a small mortgage and less than you pay in rent now, plus the house is yours, you could be better off. But no income.

So, time stress effort & risk(options 1&2) give you income.
One-off investment (option 3) gives you security, your own place, and perhaps lower monthly payments...

Reaper

There is a downside to option 3 though - the only way to gain from the property value (unless it also reduces your rent) is to sell it. So it depends on what your future plans are.

To be accurate there is one other way which involves leaving the property to an insurance company when you die in exchange for an income, but I heard they are often not very good value.

gozomark

Diamond1 wrote: »

Hi there. Well to be honest that amount is it and all I will have to use so of course can't afford to lose anything ideally. As I have no pension, only the state pension will be available to me. I will be 57 in April so getting close to retirement age :-( but think I will have to continue to work if I can until I'm 70. Another :-(.

If you can't afford to lose any of your capital, why are you even considering buying something that could go down in value ?

Diamond1

Well Gozomark, who can afford to lose capital? I'm merely trying to find the best option for me to use with my capital. As there is no pension in place and I am 56 I need to find something that is going to give me an additional income to the state pension.

gozomark

Anybody who invests should be able to afford to lose capital. Thats part and parcel of investing. If you can't afford to lose any of your capital stick to saving - that is your best option.