How would you invest 1 million pounds

chewmylegoff

Personally if I suddenly got £1 million, I would buy a house for about £1.25 million, and live in it.

nathand_2

Buffett wrote: »

I'd still work to pay for my own home

Why?

Paying off some/all of your mortgage will save you more than you'll earn from low-risk investments.

doughnutmachine

dunstonh wrote: »

I would suggest my crystal ball is more accurate than yours which shows tenants that never fail to pay.

We are not on about me. We are on about an individual who has stated that they want something with very low risk, and for her money to be secure.

Sounds like your risk analysis is as flawed as all the other failed property tycoons who knew it all.

thankfully we do have a strong legal system in this country, since a lease is a legal contract there are some some strong legal remedies open to a landlord with a tenant not paying. of course some tenants will go bust, but some tenants are unlikely to go bust...

anyway i thought all investments had some risk? or are you going to tell me share based investments never go down?

sometimes at work i'm asked a question that i dont have the background knowldege to answer. i normally find it better to admit that i dont know the answer than try and bluff it. maybe think about that.

chewmylegoff

doughnutmachine wrote: »

thankfully we do have a strong legal system in this country, since a lease is a legal contract there are some some strong legal remedies open to a landlord with a tenant not paying. of course some tenants will go bust, but some tenants are unlikely to go bust...

anyway i thought all investments had some risk? or are you going to tell me share based investments never go down?

sometimes at work i'm asked a question that i dont have the background knowldege to answer. i normally find it better to admit that i dont know the answer than try and bluff it. maybe think about that.

Like Railtrack plc, for instance?

doughnutmachine

chewmylegoff wrote: »

Obviously some companies are a safer credit risk than others, which is why you will have to pay more to acquire a 60 year lease with network rail as the sitting tenant than you would if the tenant was comet...

yeah, the network rail lease still yielded something like 5.5% with rent reviews every 30 years.... then at the end of the lease you have a property that should have went up in value with inflation...

from an investment case i would say long lease property with a strong tenant is similar to gilts/ bonds.

if you look at the yields on long dated gilts and consider that the income is fixed and the sum returned will not be worth much due to inflation, well i know where i would rather put my money.

might be best to speak to a SURVEYOR if anyone is interested in property investment. it appears that the advice IFAs given on property is just wrong.

doughnutmachine

chewmylegoff wrote: »

Like Railtrack plc, for instance?

fair point, but some other company is likely to take over the lease.
you think if a company like national grid went bust the landlords would just be allowed to take their property back? like it or not, some companies more or less have a government guarantee on them...

chewmylegoff

doughnutmachine wrote: »

fair point, but some other company is likely to take over the lease.
you think if a company like national grid went bust the landlords would just be allowed to take their property back? like it or not, some companies more or less have a government guarantee on them...

When a company goes into administration and is bought out, the buyer can cherry pick, taking over only the leases they want. My understanding is that insolvency legislation allows the administrator/liquidator to simply hand back the keys for the rest. Granted this is very unlikely to affect a national infrastructure such as the national grid, but it's possible that unprofitable train stations could simply be closed in that sort of situation (although network rail is much safer than railtrack was as it is essentially a government agency).

ChiefGrasscutter

I've actually known a elec' distribution company move a small substation feeding a hamlet precisely because the local swinging !!!!!! entrepreneur/millionaire tried to price gouge the company on raising the rent they paid him for the hankerchief of land it was situated on.
So they said sod him and moved it - much to the amusement of everyone locally.

atush

doughnutmachine wrote: »

never a truer word said! but do you not think that a tennant spending millions on a leasehold property will be quite a reliable tennant.....

all i'm saying is that some commercial property does offer long term reliable returns, is that not what the OP was after?

why dont you find out what a FRI20 lease is, then if you have time why dont you consider what commercial tennants would never dare playing silly !!!!!!s with a landlord.

I invest in commercial property myself, thru funds. But the OP was advised to invest in residential property. and not all commercial property is in the millions.

sabretoothtigger

a strong tenant is similar to gilts/ bonds.

Gilts are fixed return. Land is way better over time but may not give the same liquidity or cashflow which can make it terrible for some

chewmylegoff wrote: »

Personally if I suddenly got £1 million, I would buy a house for about £1.25 million, and live in it.

The simplest ideas are often the best but do you need a house that big, if not its speculation

the network rail lease still yielded something like 5.5% with rent reviews every 30 years

People can just bid on these things?

ChiefGrasscutter wrote: »

I've actually known a elec' distribution company move a small substation feeding a hamlet precisely because the local swinging !!!!!! entrepreneur/millionaire tried to price gouge the company on raising the rent they paid him for the hankerchief of land it was situated on.
So they said sod him and moved it - much to the amusement of everyone locally.

Unless he also owned enough property near by which increased by a percentage from no more ghastly substation in sight, making it a bit of a smart cookie move