Selling London Property and Investing the Proceeds

Nachmani47

Hi guys - would really appreciate some advice on the below situation.

I am 36 years old and own a London property which I moved on to a 3.99% BLT mortgage when I moved countries. The property is worth circa, 380,000 gbp with a mortgage of 227,000 gbp. As the rental yield is pretty low (month rental income = 1,200) I'm considering selling it so that I can generate some kind of passive income. In addition, it's pretty tough finding expat mortgages at competitive rates and the cost of remortgaging every two years is excessive.

As far as I'm concerned I have the following options:
1) buy a property outright in a cheaper area such as Brighton/East Sussex and invest the monthly rental income
2) Invest the money in ETF or offshore mutual funds
3) Take the money to the country I'm currently living in (I like the idea of diversifying and keeping some money in the UK.
4) Invest the money in property/investments in my current location
I don't plan on returning to the UK anytime soon. I'm working and earn a relatively OK income - I have a full pension and an emergency fund.

Apodemus

Tricky one!

I retained a property while overseas for ten years. Renting from a distance was a hassle. Over the long-term, I didn't really cover costs and the property didn't rise in value (bought at the top of the boom in 1990). Financially I would have been better off investing the money, but that assumes I would have had the discipline to put as much aside as I was forced to with the mortgage.

However, when it came time to come home with a family, it was much easier having an established base, knowing that the kids would go into the village school. Also during difficult times when the job might have disappeared at short notice, or the security situation become untenable, it was a comfort to know that we had a home to escape to. For me, these comforts outweighed the financial considerations.

Nachmani47

Thanks for your feedback Apodemus!

Yes, I see what you're saying. It's definitely nice having that security. Having said that, I'm really not sure if I will come back to the UK and I want to invest in something now that gives me passive income. I'm on an interest only mortgage now and can't see how i'll be able to pay off the capital anytime soon. Seems more of a liability right now!

atush

Where do you live now? Could you BTL there?

How is your rental income taxed both in t he UK and your COR now?

Nachmani47

Yes, I have considered a BTL in the country I'm currently residing in. Just like the idea of diversifying between Israel and the UK.