Help me spend £180000 !

ads2312

I'm quite new to this site although have been reading lots of the post trying to find ways to make/save money etc. All very interesting stuff with some great tips.
Ok so here's our situation.
I live in Surrey with missus (not married). We both work bringing in about £60000 a year (me 33k, her 27k). We own our house probably worth about £230000 with just over £40000 mortgage left with The One Account. We were lucky and got in when prices were cheaper. Think we paid about £115000 in 91 and borrowed about £90000. We over pay every month by about £600 (does vary but never much less, more some months) but we also save 2 or 3 hundred each separately most months.
I have about £20000 in savings and the missus as about £100000, she did quite well with a couple of property sales and won some money on the lottery a few years back, lucky cow )
I know we could afford to pay the mortgage off and be MF which would be great but we both work for the government and my job is probably going in July, I will get voluntary redundancy of about £60000. The missus job could go but we think she will be ok for another few years at least, but who knows with this government !!

So the question I want to ask is -

If you had £180000 what would you do with it ?
I'm quite handy and have pretty much re built our house and also renovated a couple of flats for friends. I want to go into property development but she is un-sure. Just keeping the money in the bank seems a waist of an opportunity especially with the rates so low. She has no clue what to do with it, I guess a nice position to be in during these hard times but I wont have a job and don’t want to sit on my !!!! spending my redundancy on living. I want to start off small, buying flats from auctions, do them up and sell on (to start), then once we have a bit of money behind, keep the flats and rent out. I know it can be risky but really I have no other transferable skills from my present job and to be honest don’t want to work for anyone anymore.
So help me out spending £180000, obviously I'm not offering money to your but ideas would be great.
thanks

atush

First of all, be aware your lovely 'missus' might read this so calling her a cow might not be in your best interest;-) But if you do decide to 'pop' the question I would rec getting married. Why? Because os you do go this route and renovate property for re sale, then two CGT exemptions are better than one. And look at lower priced property to start.

Be prepared to go the rental route if you can't get enough of a profit. Research each area you are looking to buy in, and know what recent sales have been like and the likely rentals you can get. View each property and get expert opinions on the building (so you have less in the way of nasty surprises) read the legal pack thoroughly if buying at auction.

I might also look at getting another job- at least at first in case it takes you a while to find a suitable place. It will also help you with finance for your first try at PD as lenders might be scared of someone with no experience.

Keep back enough of the funds to live on for 6 months. Dont use it all- you need a safety net.

bobbyj_2

I'd stick it all in CADOGAN PETROLEUM - CAD and make a million but that would be gambling though highly probable. Buy a book on the stockmarket.

ads2312

atush wrote: »

First of all, be aware your lovely 'missus' might read this so calling her a cow might not be in your best interest;-) But if you do decide to 'pop' the question I would rec getting married. Why? Because os you do go this route and renovate property for re sale, then two CGT exemptions are better than one. And look at lower priced property to start.
Who said anything about her being lovely , deffo not popping the question, 16 years together and both think its a waist of time so that wont be happening (ps she is lovely though!)

Be prepared to go the rental route if you can't get enough of a profit. Research each area you are looking to buy in, and know what recent sales have been like and the likely rentals you can get. View each property and get expert opinions on the building (so you have less in the way of nasty surprises) read the legal pack thoroughly if buying at auction.
Will rent if I can't sell for a decent profit, looking at Brighton as i know the area well and rental there is big with the Uni. Want to get some money together first which is the reason for trying to sell first.

I might also look at getting another job- at least at first in case it takes you a while to find a suitable place. It will also help you with finance for your first try at PD as lenders might be scared of someone with no experience.
I'm looking now so hoping to have at least 1 flat ready to be done before I get made redundant. The 'Lovely' missus will finance anything until I get my dosh.

Keep back enough of the funds to live on for 6 months. Dont use it all- you need a safety net.

We wont invest eveything, that's for sure, looking for flats around 90k, just missed one on Monday that went for 90 (probably worth 130k comleted! bummer !!)

thanks for your help, appreciated

ads2312

bobbyj wrote: »

I'd stick it all in CADOGAN PETROLEUM - CAD and make a million but that would be gambling though highly probable. Buy a book on the stockmarket.

Thanks but stocks are well out of my comfort zone. Could make a million or lose the lot. Want to do something I'm responsible for. Might make a small punt on something but don’tknow anything about them so need to look into it.
Cheers

atush

Marriage means you can transfer assets at will, and pay no inheritance tax if one of you snuffs it.

But not married, make sure both of you are owners to get 2 CGTEs. And write wills, as neither of you will inherit the others half, and make sure you lost each other for death in service benefit/insurance. Not being married will complicate such a finacial system as you are thinking of.

Also, if going for the student market (excellent renatl returns BTW) then look up the regs on home of multiple occupancy in your area. Expensive to do initially, but more than makes up for it in rental yields.

ads2312

I'm not planning on dying anytime soon but we have wills already so no problem there.

Badger_Lady

Personally I'd pay off the mortgage, sell most of my stuff (putting the really good bits in storage) and rent out the house. Then I'd travel round the world making violins and learning to catch my own food. But that's just me

atush

ads2312 wrote: »

I'm not planning on dying anytime soon but we have wills already so no problem there.

No one usually 'plans' to die early lol. But best to cover all your bases.

ads2312

Badger_Lady wrote: »

Personally I'd pay off the mortgage, sell most of my stuff (putting the really good bits in storage) and rent out the house. Then I'd travel round the world making violins and learning to catch my own food. But that's just me

Very good, :rotfl:, Funny as we did say we should go travelling, missed out on the 'before uni travel' as I worked straight from school . Will probably do 3 months at some time across S America and the US.

jamesd

I'd invest it. Funds mostly (unit trusts etc.). Unbiased.co.uk and find yourself an IFA that you get on with. Tell them the amount of decrease in capital value that you're willing to accept in a bad year, knowing that it's almost certain to recover in later years, and any capable IFA should be able to put together a combination that can generate 7%+inflation+ a year as a long term average.

Any use for more pension income? And tax relief on repaying the mortgage? Making pension contributions, getting the tax relief, then using the 25% tax free lump sum from the pension can be lucrative.

Pay in say £20,000. 25% tax relief is added bringing it up to £25,000 in the pension. Take 25% tax free lump sum, now you have £6,250 in cash and £18,750 in the pension pot. An IFA or some general guidance here should let you get on average 5-7% income plus inflation growth from the pension part. So your net pension payment of £13,750 gets you £18,750 generating you income, a nice boost. And that's before you even do any investing with the pension money...

You need to be 55 or over to take a pension lump sum like this, and to take income from the rest of the pot via income drawdown.

If you just invested it outside a pension you should be able to get around £9,000 a year in extra income from it and after some years it'd all be in an ISA and paid out tax free. If it isn't already. That's assuming 5% of the capital being available as income , a medium sort of level. If you don't mind draining the capital you can plan for how long you want the extra income and take it at a higher rate, accepting that you'd eventually run out. The skill there is planning for it to run out on the day you die. Or a bit later to give a safety margin...