Best investment idea?

Gabbatek

Hey everyone hope you've had a good holiday.

I need some advice, I have luckily inherited a nice sum of money £200,000 and want to invest in property.

I already have £200,000 that me and my wife have saved up but that is in a trust and would like to keep that there unless it's desperately needed.

What is the best way to invest the other inherited money in property?

Gabbatek

Also I would like to make a career/profession out of this if possible

Would be the norwich-norfolk area

G_M

Buy into a property investment fund?

Buy a BTL property or 3 and become a landlord?

Pay off the mortgage on your home?

Buy some land, get planning permission, and build some property units?

Buy a Holiday Bond or 3?

dimbo61

Stocks and shares in big companies like Apple, Google or Bentley !
We have know idea what you want us to say ?
Are you young fit and skilled at property development or 75 and looking for retirement income !

princeofpounds

What is the best way to invest the other inherited money in property?

If you have a mortgage, it is probably to pay it off. Tax-free, guaranteed return, with zero hassle.

If not, then it is probably to buy a property, likely in conjunction with a modest interest-only mortgage (the interest being tax-deductable, accessing the best mortgage rates with ~60% LTV).

Preferably one with:
- good rental yield potential
- good capital appreciation potential (including possible extension/development)
- low maintenance requirements

A real estate fund may not be as tax-efficient for you, and the yields are so low these days that the fees will cut out a significant portion of your return.

Developing land requires a bit of expertise and luck. So probably not for you at this stage.

Mickygg

Blimey how could anyone possibly advise when you give next to no info?

See an IFA.

ognum

Gabbatek wrote: »

Hey everyone hope you've had a good holiday.

I need some advice, I have luckily inherited a nice sum of money £200,000 and want to invest in property.

I already have £200,000 that me and my wife have saved up but that is in a trust and would like to keep that there unless it's desperately needed.

What is the best way to invest the other inherited money in property?

I read from your previous posts ( of course things may have changed) that you are living in a council property on benefits.

Your inheritance will of course alter the status. Of these so you need to invest wisely, I would take professional advice.

Sadly your inheritance is IMO not big enough to set you up with a job in property without other income.

You could buy a wreck and do it up and sell for more if you bought the right property in the right place and were willing to use sweat equity.

You could buy some inexpensive BTLs and live from the income minus mortgage payments etc but this depends on you areas of knowledge. This would provide an income which would need to be declared and taxed.

IMO £200k is not enough to set you up with a job for life.

Gabbatek

Hey sorry about the lack of info.

Yes I am in a council flat which would be a gem to rent and I have 6 years discount with it but I feel like a leasehold is a waste of money.

Not on benefits anymore, but working in a dead end administrator job so would like to use this £200,000 to leave my job and make a career out of it.

Also I'm fit and in my 30's.

I'm not sure what to do, maybe with this £200k I could buy my flat for around £50k get a house on auction and do it up and rent it out to students?

I'm just so confused!

Also my other £200k in trust provides £500-600 per month income plus my part time work which doesn't bring in my more.

So I have a monthly income of £500-£700 a month plus this £200k for investment

princeofpounds

but I feel like a leasehold is a waste of money.

well that's just plain flawed reasoning.

In fact, it might be economically better for you to stay in your council flat on a tenancy and enjoy cheap rent and zero maintenance along with total security of tenure. Until it no longer suits your lifestyle. Of course this depends on the specifics, but it is often the case.

Alas 200k does not a job make. Not by a long shot.

What you have to realise is that being a landlord is almost all about finances. The actual letting is often rather incidental to the profit made or losses incurred. Many people forget this, particularly ofter a 20+ year bull market in residential property of unprecedented size.

Owning investment property is basically one big bet on house prices and - unless you have a long-term fixed mortgage - interest rates.

The really important concept to understand is that of gearing. Buy a property 70% LTV, and you have 30% equity. Let's say the property as a whole cost £200k, with 60k equity and 140k mortgage financing.

House prices then rise 10%. The property is now worth 220k. Sell, pay off the 140k mortgage, and you have 80k left over. Your equity wealth has not increase by 10%, but by 33%. That effect of amplifying returns is largely how so many people made so much money during the property boom.

Not fixing-upping. Not rental income (which largely serviced mortgage payments, tax and maintenance costs, though there would probably be some left over).

The problem is, the amplification works the other way too. If house prices go down 10%, you lose a third of your wealth.

Now with 70% LTV, you will probably survive a downturn (as long as interest rates are not out of control, forcing you to sell at the worst moment) and over the very long term it should work out.

But there are plenty of nutters running around doing this on 85-90% LTV. Who likely don't understand the real business model of BTL.

richy999

How about buying a property to operate as a holiday let?

That way you have no permanent tennants to worry about and if it's in a place you like, you could make use of it as well.

pcgtron

You've got a 200k inheritance, 200k in savings and yet live in a council house with a big discount on the price if you buy it. No wonder the countries in trouble. I would move out of the council house so they can give it to somebody who actually needs it then buy a 300 K home with cash, leaving you 100k to have fun with.