23year old with £290,000

jimjames

All the options seem to be property based. Isn't that an "all eggs in one basket" option so not spreading risk across other asset classes like shares and bonds.

I can see the benefits of buying a property with a big chunk but there could be reasons to keep some as small mortgage and use remaining for ISAs or pension top ups. Age 23 this would be a very good position to be in so you have the maximum time for investments to grow before retirement.

atush

Well, although mine was property based, it was one that suggested holding back 40K or more for investments.

It was my understanding, the OP had a FS pension accruing (was she I nurse I think?) and everyone needs a home to live in at retirement. If there had ben no pension, I would have suggested starting one, and would with half the 40K.

Having a home w/o mtg would give more opportunities for saving and investing (over time thru drip feeding) as there is no mtg to pay off.

guesswho2000

marathonic wrote: »

Again, I re-iterate my previous point, why do so many people see being mortgage-free as a necessity?

Someone renting a room in a house in London has no security of tenure and can be kicked out at any time. I would consider this to be a worrying position to be in.

For someone having a mortgage of two times their salary on a house worth 11-12 times their salary and mortgage payments of about half of what people in the area are renting rooms for, where is the worry?

I appreciate this point, and while I have little doubt that as I continue to climb the property ladder my mortgage debt will increase, my primary aim is to be rid of it.

It's by far the biggest single expense each month for me and I'd feel a lot more secure without it! I'm sure a lot of, if not most, people feel the same!

gkerr4 wrote: »

seriously 23 with £290k sloshing around - it would probably be a porsche 911 - a great car, more economical and lower running costs than you'd imagine - better depreciation than most in its class (used BMW M6 anyone?).
Buy a lightly used 1-2yr old model and it won't even dent it that much.

i'm even being serious - your are in a unique cash position - you cannot take it with you.

Lol to this however, priorities - by all means buy a flash car, but I still think OP's first priority should be a house (mortgaged or otherwise). In their situation, I'd go for option 3, mortgage free £250k with a cash float.

Their choice ultimately, but one thing that is certain is that they'll always need somewhere to live .

As another poster pointed out though, re the potential to move abroad, I'd be off to Oz in a flash. That has to remain my 10 year plan for now unfortunately!

padington

If you want to live in London I would go all in and borrow more on one property, its a great long term capital investment, if up north 50% in a property to save you rent and 50 % investing in yourself.

If in London I would suggest you get a small mortgage of about 60k (£270) a month. Also keep yourself 15k to do it up and have some emergency funds. Then get yourself a freehold house that is structurally good which can be modified slightly but greatly improving its worth. Maybe one with a flat roof that you could add some walk on glass to make a bit of a wow factor underneath and can be used as an unofficial roof terrace with a bit of wow factor on top. Buy a middle terraced house not one at the end. They get robbed. Look our for something that has great garden potential if in a city. Consider a two bed house with room to convert into the loft.

Choose what's not important to you, I advise not caring about curb appeal, lots of properties are lovely inside but get written off because they have pebble dash front, whilst other properties look lovely outside but are proportioned meanly inside. Care less about how the tardis looks externally and you will be a comfortable time lord inside.

Saying that I would really concentrate on what the back is like. Try to get something backing on to a private wood or not overlooked at the front but with lots tree's if you can. Special properties are out there and often it's only the size of the plot that keenly affects the price so they often are a bargain, considering the extra pleasure more wildlife and greenery near you can give.

Think in terms of micro post codes, look for sweet spots that are nestled around other roads that are on the up.

Look for houses with period features or that could have their period features returned.

With a small mortgage you will be pretty damn safe from possible crazy interest rates but you will be also allowing your self to leverage nicely into the freehold house market, which is ideally where you want to be.

This will be a great tax effective safe investment but more importantly a lovely home that yields you a dependable rental income.

If you want to live up north and out of a city, consider that you may be going against the trend and maybe consider investing only half your income in property as it might not be such a wise capital investment and the other half consider setting up your own business. Why trust a suit in New York with your money more than yourself ?

Also don't forget, the trend during the digital age is to pull people into the mega cities, buying land in a mega city like London, over the long term, is a very wise idea. If you don't want to live in London or another 'mega city' consider getting a London buy to let and renting where you do want to live.

It seems without the factories causing a need to spread populations near primary natural resources, the economy of scale and culture supports ever growing huge populations exactly where the best parties are. This is true on a micro and macro scale. Let the trend, be your friend.

racing_blue

magnolias wrote: »

Hello,
I am a 23year old earning £30,000. I work for the NHS and have a pension with them. I have £10,000 in savings and no debt. I live with my parents in the outskirts of london, and save a lot of my money. Therefore getting my own place is important to me.

I have recently been given £280,000 due to an unexpected death in the family. So this combined with my savings are £290,000.

Magnolias: getting a place of your own need not mean owning the place that you get...

Unless you are fairly sure how and where you would like your life to pan out over the next 10 years, there is a lot to be said for remaining light and flexible by renting a place.

If you want, you can still get exposure to property via a Real Estate Investment Trust such as Vanguard's- the main difference being that you can sell it at a click of a button when you choose. The income could pay your rent.

My guess is that £290k invested sensibly has a good chance of bringing in around £10K of income per year, index linked, for life.