How would you invest 60K?

havingaball74

Hi all,
How would you invest 60K?
Would you buy to let or invest in income portfolios/ISAs etc?
I have just bought a new property with my partner but have hung onto my mortgage free terrace until I can decide what to do.
I need to release equity from the property to match my partner's deposit on the new house (to make it 50/50 and to lower the monthly mortgage repayments).
So, do I
a) sell up, after matching his deposit that should leave me with around 65K to invest somewhere/somehow?
b) remortgage on a BTL, match his deposit, rent it out (45K mortgage on a house worth £110K. The house is in a prime rental area in a large city.
I am a teacher, aged 45, unmarried with a pension.
I have been to see IFAs. Some say that investing in diversified portfolios are a better and more tax efficient way to save and make money. Some have said that I would be crazy to sell even with the new BTL changes.
I am happy to be a landlady and the houses are close to each other. I release that there are two income streams with BTL: monthly rent and possible capital gains and increase in equity.
However, is investing in shares/ISAs/property a viable (less volatile/hassle) alternative? It feels like I am comparing chalk and cheese but I just hear people telling me that I would be mad not to BTL/LTB especially with the relatively low mortgage. It seems like I am getting contradictory advice from the advisors I have spoken to (5). What do people think?
Thanks.

jimjames

If you have it before 5 April you can get £30k into a S&S ISA for this year and next. Then another £20k in April 2017. If you have a partner then you can split it across to get it in sooner. If you don't have pension sorted then that's another option to make the most of.

Mixed portfolio or something as simple as Vanguard VLS60 fund would do the job for long term growth. % of bonds would depend on how risk averse you are.

You can read up more here https://www.monevator.com

OldBeanz

Long term growth is fine but to what ends?

Do you have 6 months expenses to cover any employment hiccups? If not you could be putting £20k into a Santander 3% 123 account.

You have a pension but will it pay enough for you to live on; does the retiral date match when you want to retire; at what age will the government give you a pension? Assuming you invest the amount over a number of years the government will make it up to £75k. You could then draw £15k pa free of tax for 5 years. (this is assuming no growth) Would make good sense if in your fifties but not so good in your twenties.
Are you likely to need more bedrooms and have to move up the housing market - again more likely to happen in your twenties than fifties.
A bit more info would help.

mark1959

If I could I would stick it into a pension and receive at least £15000 from the tax person. If not, then Santander's 3% current accounts.

havingaball74

Thanks. I am hearing from IFAs that I would be 'mad' to sell. It seems like
some are biased? My fear is, if I sell the property, once it is gone, it is gone.

kidmugsy

havingaball74 wrote: »

How would you invest 60K?

Slowly.

havingaball74 wrote: »

Would you buy to let or invest in income portfolios/ISAs etc?

The most tax-efficient form of owning property is owner-occupied. If I already had a lot of money invested in that one house I think I might prefer to diversify the rest of my portfolio. BUT, do you have any business advantage as a landlord? You obviously have one: you know the house well. And a second: you presumably have local tradesmen available with whose work you are familiar. And thirdly, you presumably know the local housing and rental market. And fourthly, you are happy to manage it yourself. If you also had a reliable source of good tenants (new teachers at your school?) maybe it would be worth the risk of having such a concentrated investment.

It wouldn't appeal to me but it might to you. Just remember that then your housing portfolio would be highly geared (i.e. based on a lot of borrowed money), illiquid (no guarantee that you could sell either in a slump), and the more tradeable part (the let property) is effectively indivisible. For example, suppose you suddenly needed £20k for some purpose. How would you get it?


If I understand correctly there are advantages in terms of Capital Gains Tax if you sell the house fairly rapidly after it stops being your Principal Private Residence. You could always experiment with one tenant for a while and see how you like being a landlord.

By the way, are you familiar with the changed tax laws on let property that are coming in over the next few years? Anyway, before you decide why not talk it over with someone old enough to remember the last housing slump? It's no use talking it over with people whose only experience is of rising house prices.