One house or more, what would you do?

want2bmortgage3

If you had 100k what is the best option for using your money:

1. buy one property with 50% equity to live in

2. Put 50k down on two properties (25% on each) live in one and rent the other out?

fairy_lights

What's 'best' depends on what you want.
Do you want to be a landlord?

Alice2708

Don't forget if you own more than one property you will be subject to the higher stamp duty cost

Guest101

want2bmortgage3 wrote: »

If you had 100k what is the best option for using your money:

1. buy one property with 50% equity to live in

2. Put 50k down on two properties (25% on each) live in one and rent the other out?

Given you're user name, both options seem to be counter productive

System

You'd need a buy to let mortgage. You can invest in property via funds instead, then you won't have the responsibility or second mortgage, or better still, a shares fund, then you'll perform better and not be overexposed to property

theartfullodger

Spend it on mistress/toy-boy (both?) , alcohol, fine dining

want2bmortgage3

How do I invest in property via shares and what is a shares fund? Do I get a regular income from this as I would with monthly rent and is the capital safe?

marksoton

want2bmortgage3 wrote: »

How do I invest in property via shares and what is a shares fund? Do I get a regular income from this as I would with monthly rent and is the capital safe?

Employ a financial adviser.

System

Want2bemortgagefree -

.How do I invest in property via shares and what is a shares fund? Do I get a regular income from this as I would with monthly rent and is the capital safe?

Mutual funds pool lots of people's money together and invest in shares, property, bonds, etc - and you own shares in the find itself rather than in individual companies. They allow you to achieve more diversity at less commission than you could achieve holding shares yourself but charge an annual management fee in exchange, of anything from 0.09%-2%+ of the entire balance, which you pay whether you make profit or loss. They are safer and more balanced than just piling it all into a handful of stocks yourself.

If you look in the morningstar or ii websites for example you'll see there are property funds among them, usually commercial property (shops, warehouses, etc) - residential ones do exist but they're harder

Personally I think property is far harder work than shares and far less liquid, a property fund will probably have higher management fees.

For shares I recommend just tracking an index like the FTSE all share, rather than going for active managers - index trackers are cheaper and beat most managers

Yes, funds can provide income, though this under performs compared to accumulation funds, which reinvest your dividends/rent

I don't know if property funds are leveraged, if they're not then they might not outperform buy to let, still though they would be isa-able so better tax wise and less risky if you had a bad Tennant or vacant period

System

And no, capital not safe, that's the nature of investing. They're not going to rip you off fraudulently but you will be exposed to downs as well as ups, just like with house prices, though as long as you don't sell in a crash and just wait it out, you'll usually do far better than cash.

Remember the jobs market isn't safe either and is less diversifiable than shares

And if you hold in cash you're guaranteed to lose against house prices

Some people rent & invest rather than buy, but I disagree with that, as a mortgage let's you invest with borrowed money

slowpoke_rodriguez

The share price of Grainger, one of the larger residential Landlords.
As you can see, There's money to be made if you invest at the right time, but also plenty to lose too. A 500% increase in share price since 2009, following a 700% fall. How does this compare to BTL?
I can't be arsed to work it out. Property in the SE has risen by about 50% in this time, so with a 90% mortgage they're probably about the same, assuming rent goes to pay the mortgage, agents fees etc.
One big advantage of the shares is that they can be sold gradually over time, reducing CGT liability, or even held in an ISA. You can buy them a bit at a time too...