Buy to Let/Investment

Jojothorpe

Hi, I'm hoping we can get some advice here...
My mum has just sold her property, as she wants to be mortgage free. The only way she can do that is to buy something outright with the £85,000 equity she's got from the sale. This won't buy her what she'd like around here (Leicestershire) so she was contemplating moving to Wales. She works from home & makes good money, but she wants the freedom to enjoy her wages without mortgage repayments.
Before she packs up & moves away she wants to look at all options, including buying somewhere round here with me & my husband (her deposit, us paying the mortgage as an investment) or her maybe buying 2 cheaper properties & getting an income from them...
Our heads a spinning - is there something we can do with this money to make it work for all of us? We would like to invest in something and could pay into something monthly but we don't have the lump sum at the moment, whereas Mum has this but wouldn't want the monthly payments!
Any advice would be massively appreciated!!

OnTheRun

Jojothorpe wrote: »

Hi, I'm hoping we can get some advice here...
My mum has just sold her property, as she wants to be mortgage free. The only way she can do that is to buy something outright with the £85,000 equity she's got from the sale. This won't buy her what she'd like around here (Leicestershire) so she was contemplating moving to Wales. She works from home & makes good money, but she wants the freedom to enjoy her wages without mortgage repayments.
Before she packs up & moves away she wants to look at all options, including buying somewhere round here with me & my husband (her deposit, us paying the mortgage as an investment) or her maybe buying 2 cheaper properties & getting an income from them...
Our heads a spinning - is there something we can do with this money to make it work for all of us? We would like to invest in something and could pay into something monthly but we don't have the lump sum at the moment, whereas Mum has this but wouldn't want the monthly payments!
Any advice would be massively appreciated!!

It sounds like your mum needs some proper financial advice, rather than the thoughts of anonymous individuals on the internet.

You've said she only has £85k, and needs somewhere to live now she has sold up, and £85k won't buy anything in Leicestershire.

So I'm confused as to why she would give you the money to bay a place for you to live ... unless you and your husband want your mum living with you for the rest of her days. Even if yous do, is that what your mum wants after having her own property?

Now if £85k won't buy her a place to live, how can it buy 2 places for others to live in (and pay rent)? :huh:

Even if it can, she would presumably be relying on that rental income to pay her own rent. So what happens if the tenant fails to pay?

[Deleted User]

1+1 = 3 perhaps

AnotherJoe

I think the idea was, Mum uses £85k as deposit, OP pays mortgage. OP continues to live in own house. OP gains from rise in price of this second house that they own in some proportion, let's say (arbitrarily) 50/50.

Many potential problems though. What happens if OP falls out with partner and they split and partner wants money ? Or OP/partner fall on hard times and can't pay ? Or they fall out with mum? Do they evict mum ? Can they force a sale ? Probably, a bad idea.

OnTheRun

AnotherJoe wrote: »

I think the idea was, Mum uses £85k as deposit, OP pays mortgage. OP continues to live in own house. OP gains from rise in price of this second house that they own in some proportion, let's say (arbitrarily) 50/50.

Many potential problems though. What happens if OP falls out with partner and they split and partner wants money ? Or OP/partner fall on hard times and can't pay ? Or they fall out with mum? Do they evict mum ? Can they force a sale ? Probably, a bad idea.

Ah, yes, that would make more sense.

But I also agree with you, probably a bad strategy, not only for all the reasons you mention, but also that any change in the property value (not forgetting values can go down as well as up) will not be realised until the sale of the property ... which would mean either waiting for the mother to die or intending to make her homeless if she doesn't do so when the OP wishes to cash in her chips.
Neither is very nice...