How to invest 60k sterling - property or ???

topperdoggle

A nice problem to have, I know. I have 60k earning very little interest in the bank and I want to do something "better" with it.

Ideally I'd buy a small property and let it out, but I don't think it's enough - even for a small property in a regeneration area. Would be happy to hear if anyone has any ideas of suitable areas.

Apart from that, I'm lost. Bank interest is barely there compared to inflation, I believe Gold is in a bubble, and I believe the FTSE will cool down over the upcoming years, but I don't know enough to be sure to back this feeling with actions.

Ideas?

kidmugsy

You could always buy your small property with the aid of a mortgage: you get to subtract the interest payments from the rent you receive before the taxman gets his claws in. Rather you than me, but if it suits you .....

topperdoggle

kidmugsy wrote: »

You could always buy your small property with the aid of a mortgage: you get to subtract the interest payments from the rent you receive before the taxman gets his claws in. Rather you than me, but if it suits you .....

Any chance of a concrete example? And why recommend something you don't seem to think is a great idea? (Meant in a nice way!)

innovate

Just commented on a "what to do with £50K" one. My comment to this one would be more or less identical.

https://forums.moneysavingexpert.com/discussion/4592895

kidmugsy

topperdoggle wrote: »

Any chance of a concrete example? And why recommend something you don't seem to think is a great idea? (Meant in a nice way!)

Some people have skills that might make BTL a reasonable punt e.g. legal skills, trade skills. I don't. And I don't share the widespread conviction that house prices always go up, having seen a family member ruined in the last-but-one property slump.

As for areas, if I had to have a BTL I'd pick an area near my own house where I felt that I knew the area well. The idea of plunging into a flat in a tower block in, say, Leeds, strikes me as a mad risk for anyone who doesn't know Leeds.

Why not just sit tight and buy shares when they seem better value to you?

saintalan

topperdoggle wrote: »

A nice problem to have, I know. I have 60k earning very little interest in the bank and I want to do something "better" with it...

Hi

What we don't know are your circumstances e.g. Age, Tax Rate, Other Savings, Pensions etc and, indeed, I am not saying you should tell all here, it's just that without it you will get a somewhat generic response.

There have been quite a lot of similar requests in the past few weeks with differing amounts you might find useful.

I have a BTL but it was my previous residence which offers significant CGT advantages. I certainly wouldn't do it without a mortgage and you need to take into account, tax on income, maintenance, insurance etc etc. There is more on the Property thread.

Basically you just need to ensure that you will earn more than you could putting it an alternative investment, if it's more is it worth the hassle, of course you may get Capital Appreciation if property prices rise but once again you also need to consider CGT.

Cheers

Alan

sangman

saintalan wrote: »

Hi

Basically you just need to ensure that you will earn more than you could putting it an alternative investment, if it's more is it worth the hassle, of course you may get Capital Appreciation if property prices rise but once again you also need to consider CGT.

Alan makes a good point.

I just posted this in reply to another BTL question and it may help you too:

When comparing BTL income with other investment choices, make sure you compare the net income you will get. So with a BTL:

Rental Income minus:

Agents letting fees (they differ but allow 10%)
Allow 5% for maintenance (can be less, can be more, depends if you let furnished or unfurnished and age and type of property)
Ground rent unless freehold.
Property insurance, usually mandatory with a mortgage
The mortgage repayments

All the above costs are tax allowable on the income, so calculate your income tax on what remains - this is your net income.

Now, To be conservative, subtract 5% of this for void periods. Compare that with the net income you will get on anywhere else you invest your money.

On the plus side, you may want to assume some increase in the value of the property, but that won't give you cash income until you sell.

I am not against BTL, I do it and think it is good when you also have other investments. But as a main investment, only if the figures make sense compared to other choices and getting opinions here is a good starting point.

atush

innovate wrote: »

Just commented on a "what to do with £50K" one. My comment to this one would be more or less identical.

https://forums.moneysavingexpert.com/discussion/4592895

I did the same, have you read it?

Also, you don't tell us enough about you like is this your only 60K or do you have other savings and investments, a mtg, a pension etc.

a BTL using all your available cash is pretty crazy:eek:

saintalan

atush wrote: »

...a BTL using all your available cash is pretty crazy:eek:

Agree with this totally. I wouldn't do it without a 50/50 split deposit/mortgage.

Perhaps we should now wait for the OPs response befiore we turn this into a BTL thread

Cheers

Alan

Ainsley1

Perhaps you will appreciate that there are some very good posts regarding what to do with a sum of money, such as those (not exclusively) by Atush.

You (and all others asking similar questions) must start with the basics, not just what to do with the dosh!
As mentioned: Primarily your other circumstances and security without relying on trust of another person! Better protection when having 'shared' assets when married, informal arrangements risky even when you think they might not be.

Consider not just how things are at present (personal situation, interest rates, health etc) but how they might change and what you expect of your future...

Possible steps: review your own situation, security and attitude then ;

Reducing your debt (nearly always not a great idea having debt unless it frees up money for for a better reason to gain!);
ensure a) you have a cash pot available in case you lose your income [ six months worth often advised as a rule of thumb]
b) your future is better protected such as pension (and I always think next owning your own [and good] property [i.e. not a liability] is a good move, starting on the ladder or helping to pay off your mortgage is next - opinions vary but rent always rises;

any remaining cash invest only in what you are comfortable with - cash in banks (virtually all all types of account) at present is just slowly losing value but safe (ish), other investments are potentially more lucrative (stocks and shares/bonds etc.) but also more risky and a longer term activity, only invest what you can afford to lose (or at least a good percentage of it if all goes unwell) and diversify.Unless you have a lot to invest use collective measures such as unit/investment trusts or bonds. All the latter require a good amount of decision making and advice so you will need to do your own research or pay for some advice or get some for free on web sites. If you have the spare cash, these investments can make you a very good return for very little long term effort.

Not my view but you may have an attitude of 'do not care' want an easy life and wish to just enjoy the present especially if you have no ties and a short life expectancy!