Investing proceeds of sale on a London property (Expat)

Toby76

I moved to Israel 5 years ago and do not have any intention of returning to the UK.

I have recently put my London apartment on the market (due to a low rental yield and high mortgage) and will walk away with around 170k. I have also bought an apartment in Israel and it will be completed in 2 years time. During the two years that it's being built I will have to pay an interest only mortgage of circa. 4.5%. This is on monies borrowed to purchase the land and fund the building of the apartment.

I am keen to keep investments in the UK and am wondering how to deal with the proceeds of sale. I thought of the following options:

1) Invest 50% in an ETF portfolio and bring the remaining 50% to Israel in order to lower my current mortgage to a sizeable sum of circa. £100,000.
2) Buy a BTL property in the UK (Manchester, Brighton, etc) outright. Not sure if it's best to go with companies that assist in buying investment property for you?
3) Pay off my Israeli mortgage in full
4) Any other options I haven't thought about?

I would really love to hear your thoughts on how best to deal with the current scenario.

AnotherJoe

If you pay off the Israel mortgage in full then upside is you have a guaranteed return of 4.5% which is probably comparable to what you'd get on a BTL once you factor in all the costs, plus it's risk free, which a BTL never is. Downside is, it doesn't match your wish to remain invested in the UK.

For the latter, instead of a physical property, you could do what I've done and invest in UK companies with an interest in the property market. Many different possibilities. Direct shares, funds, etc.

I think you need to determine if and why you really want to stay invested in the UK first and why you think BTL is the best way of doing that.

I found it enough hassle with a smal BTL and that was prior all the new regulations and taxes, and a property really near where I lived. Doing it from thousands of miles away would be a complete no-no for me. Consider it very carefully, even with an agent managing everything there is still hassle and of course their costs for full service will detract considerably from the return.

Toby76

Thanks AnotherJoe

AnotherJoe

I've literally just been watching a TV programme "dont pay we'll take it away" seeing a house been trashed by scumbag tenants who hadn't paid about 8 months rent, needing to be evicted, owing the landlord about £10k and no doubts needing several thousand pounds of fixup as well as the place was an utter mess.
Now imagine you aren't in the UK and trying to deal with tenants like that. Court, bailiffs legalities etc.
One thing if you had say twenty properties and employed someone to look over all of them, with one flat its all your eggs in one basket being looked after by a rental agent for whom you are pretty small beer. Nightmare.

Just Dont Do It ! :eek:

Toby76

Yes, you're right. I have to say though, a local property agent has been looking after my property the last five years and have done an amazing job. The time feels right to sell though as although I'm aware of the potential growth in the London property market, i'm not comfortable with holding on to so much debt when I'm only able to pay the interest part of the mortgage right now.

AnotherJoe

Going for 4.5% guaranteed return by paying off the mortgage with no risk sounds the best plan then. Not many (any?) investments out there like that for that size of sum.

Toby76

Thanks again - lots to think about