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£15,000 to Invest
badgerman_2
Posts: 17 Forumite
Hi,
Newbie to this particular topic, I have recently sold my house and moved area, luckily I have money left over due after the purchase of my new house. All in all about £15,000, I want to invest this in a buy to let. Now I know this isn't much but in the Shropshire area you can by a reasonable property with this as the deposit.
I want the maximum return for my investment, I am torn between a buy to let in Shropshire or whether I look elsewhere e.g in the UK or abroad. I would appreciate any advice people have to offer whether it be from personal experience or from knowledge you have gained.
I have no credit cards or loans to pay off, and although it is tempting to pay it off my existing mortgage I would rather invest it in property which can add to my pension fund (not for another 34 years I hasten to add). The big picture would be to get a portfolio of property but I need to start somewhere don't I.
Help please.
badgerman
Newbie to this particular topic, I have recently sold my house and moved area, luckily I have money left over due after the purchase of my new house. All in all about £15,000, I want to invest this in a buy to let. Now I know this isn't much but in the Shropshire area you can by a reasonable property with this as the deposit.
I want the maximum return for my investment, I am torn between a buy to let in Shropshire or whether I look elsewhere e.g in the UK or abroad. I would appreciate any advice people have to offer whether it be from personal experience or from knowledge you have gained.
I have no credit cards or loans to pay off, and although it is tempting to pay it off my existing mortgage I would rather invest it in property which can add to my pension fund (not for another 34 years I hasten to add). The big picture would be to get a portfolio of property but I need to start somewhere don't I.
Help please.
badgerman
0
Comments
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badgerman wrote:I want the maximum return for my investment
Well, if you're going purely by the historical numbers, a FTSE all share with dividends reinvested returns almost three times as much as residential property, over the long term.
Obviously there are various caveats, but speaking broadly, at the moment rental yields do not cover mortgage interest and you will be taking a punt purely on capital gains (when you sell up) outweighing your cumulative monthly losses.0 -
Pay it off your existing mortgage.
Boring i know!Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery0 -
What are the likely figures for your BTL in your own (easy to manage!) area?
Purchase price, likely rent, property type etc?Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery0 -
You can buy a 3 bed house near town and ammenities for around £100,000 or a flat for £60,000 (both would cover the mortgage amount).0
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badgerman wrote:You can buy a 3 bed house near town and ammenities for around £100,000 or a flat for £60,000 (both would cover the mortgage amount).
If you're talking about getting a BTL mortgage you usually need to prove you can cover 125%/130% of the mortgage payment with the rental income pcm. However, many people achieve this by taking the mortgage as interest only, rather than the interest + capital repayment scheme you would normally have on your own mortgage.
Next question (after confirming rent coverage) is what the market is doing locally. Are prices rising? And what is the rental market like? Thriving, or would you have to be an optimist to think you'd rent either place quickly?
Do you have a rail/road link to anywhere to commute to? Or are you buying in a town full of jobs and employed tenants seeking rental property?Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery0 -
Little different, have a look into lock up garages if you want a good return. Many are sold at auction, prices vary depending on area, but it is possible to buy them for £2-3k. They can be rented for £30-50 per month, again depending on area.0
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Jorgan wrote:Little different, have a look into lock up garages if you want a good return. Many are sold at auction, prices vary depending on area, but it is possible to buy them for £2-3k. They can be rented for £30-50 per month, again depending on area.
Any ongoing charges involved, or once you bought it that's it?Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery0 -
PoorDave wrote:Any ongoing charges involved, or once you bought it that's it?
Again depends, each block is different. There may be a bit more leg work involved in setting things up but you don't have to worry about gas safety checks and wear & tear isn't normally an issue.0 -
Had a quick look.
Can only find 1 in 20 mile radius of me on rightmove to buy. Costs £10k. I know you weren't talking about buying like this, but hard to get auction data!
Found one in a slightly different area (same radius) which rents out at £117, but they made the ad really unclear whether this is per quarter or pcm.
I guess if you get one for £2-3k, and rent for 30pcm, you're looking at min 12% return before tax (30 x 12 / 3000), which isn't bad, but the investment is quite small.
If you spent all 15k on 5 garages, you'd get 150 to 250 a month, or 1800 to 3000 a year, off the top of my headAnnual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery0
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