What would you do.

surfinsfree

Thanks for all the advice it's very helpful.
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DSmiffy

Personally, I would pay off your own mortgage first.

Buy to let is great, as long as the property is always LET.

If it's empty, you'll be getting no return on it.

martinsurrey

B2L sounds great today, but around the corner could be a redundancy and a tenant not paying.

I am personally in the - get mortgage free and then think about investing in btl - camp, but I would also be looking at increasing my pension provision, it is after all free money, with the tax relief.

Southend1

Pay off the mortgage on your own property and use some or all of the income you would have paid in mortgage payments to start building up a pension.

ViolaLass

How much equity do you have? Could paying off some of the mortgage allow you to get a better deal? How much deposit do you need to get a B2L where you are? What does the market look like?

diamondsonly

edinburgher wrote: »

I said 'your own mortgage' because it gives you an unassailable platform to build on. If you own your own home, the government is unlikely to let you starve, so no matter how bad things could get, you will always have a roof over your head.

This would leave you free to invest a large proportion of future earnings, it's a wonderful situation to be in :beer:

I would avoid B2L if it is going to be your only investment, or a high proportion of your net worth. You are already plenty exposed to the housing market through your primary residence. You would be far better diversifying through ISAs, pensions, P2P lending, reducing your dependency through insulating your house/renewable energy generation etc. etc.



Investing in wine is highly specialised and not one for the faint hearted (some of the more popular bottles can run to ££££, not something that you can afford to mess up). I really think it's better left to high net worth individuals who are either suitably well versed to make decisions on what's 'hot', or who are willing to pay for advice.

I'd leave it unless you have exhausted all other less exotic options.

Thanks Edinburgher. It definitely is specialised and I don't have a clue but my best friends family invest in wines so I am hoping to gleam some knowledge from them and if it is feasible to start with a £2-4k investment then I may give it ago once we are MF. I think minimum investment is about £5-7k with a long term (10 years), so will probably never be right for us.

Diversifying is definitely the key though.

Needhelpsaving

Personally, I would pay off my main home & then research options while building savings back up.

I have a LO and the security of having a paid for house is the main motivator for my MF aspirations.

HTH x

edinburgher

Don't get me wrong, I get the appeal of investing in booze, but if you make poor choices, you can end up with some very expensive bottles that only you are likely to drink. I have a few pricy bottles of whisky that fall into this category, so am speaking from experience

tlc678910

If you get a buy to let property the mortgage interest is tax a deductible expense (for the moment) so it would be more profitable to keep a larger mortgage on the rental property rather than your own mortgage. It will reduce the tax you have to pay.

Depending on your area, if you could buy a relatively modern/ well maintained 2 or 3 bed house with garden that would suit families and that would let easily for around 120 to 140k the 25% deposit you would need would be between 30 and 35K. You would obviously need money for purchase expenses, maintenance, Gas checks, repairs, insurance, vacant months, non payers and tax kept aside (say 15K in the worse case) and then reduce your mortgage with the rest of your money. Make sure there is good rental demand for the area and property type or else you will have an uphill battle. Don't buy even a glitzy and shiny flat with en suite bathrooms in an area that is saturated with flats to let.

As you save more you could overpay your own mortgage further. If you pay off the rental you will then lose more of the rental income to tax and so likely be worse off overall versus paying your own mortgage (the maths might be more complicated if your rental has a much higher interest rate than your own mortgage?).

Remember when you are looking at buy to let property the bank will want to see that the rent you will receive is more than the interest only payment. They want to see it being around 125% of the payment I think e.g. Interest only mortgage is £400 a month the property must be worth £500 a month.

Good luck

Luckyinlife

If it was me i and i had 95k sitting around and it only took me 5 years to save it i would invest it into a buy to let or maby even 2 40k deposit on each

your obviously doing really well to save that kinda money in 5 years so get buy to let or 2 least try it then the next 5 years save agine and pay your mortgage off best of both worlds and youd still be under 40

or do it the other way around pay mortgage off now then save agine and do the buy to let in a few years