Upsize or invest?

economic

Hi there

i want some advice and finding it really difficult to decide what to do. I am in the fortunate position having about £300k or so to do somethign with (half my savings, other half gift from parents).

I see two options (please dont mention any others):

- Upsize my current 2 bed flat to a bigger 2/3 bed flat in same area (i love my area)
- Invest instead in shares/investment property

my current situation is that i am unemployed and lookng to find a job soon but probably part time and/or contracting so doubt i will fall into the 40% income tax bracket.

what would you do? my current flat is fine and am happy with it (i dont want children). i am thinking upsizing would be nice with the extra space and in later life i can downsize to release capital (tax free if rules dont change) to fund medical/care expenses etc. at the same time investing instead would give me more income currently and so have a better quality of life with less work and more freedom.

All comments/opinons welcome.

thanks

Bazofts_Revenge

Invest in a small business Off-licence, Newspaper shop. Employ a few people on minimum wage and watch the cash come in....

Income producing shares - @4% = £12k per annum.

economic

thanks. makes sense to invest instead.

anyone else?

Thrugelmir

What is it going to cost you to upsize and then downsize again. Also Bigger property = greater expense.

economic

Thrugelmir wrote: »

What is it going to cost you to upsize and then downsize again. Also Bigger property = greater expense.

upsize has to be worthwhile so to a property valued around 800k (to go from 650 sqft to around 1000 sqft). i was thinking the whole downsize in retirement argument isnt really worth it as investments would provide income anyway.

yes bigger property means bigger expense. plus i have to find the right one and sell current one - takes a lot of time and energy.

Bravepants

Keep your current flat, invest the cash for income, work part time and do something with your spare time to improve yourself (courses or hobbies), and enjoy life more.

All the best, and I look forward to hearing about what you do.

Cheers,
P

Pincher

https://www.gov.uk/government/publications/rent-a-room-relief-increase/increasing-rent-a-room-relief

General description of the measure

This measure will increase the level of Rent a Room relief, which provides for tax-free income that can be received from renting out a room or rooms in an individual’s only or main residential property, from £4,250 to £7,500 per year. It also increases the level if an individual rents out rooms in a guest house, bed and breakfast or similar, providing that it is their main residence. The increase to the Rent a Room limit will apply from 6 April 2016.







No extra 3% stamp duty for buying your main residence.
£100 rent a week = £5,200 a year. Pays for council tax, water, gas and electricity, broadband and cable TV.

economic

Pincher wrote: »

https://www.gov.uk/government/publications/rent-a-room-relief-increase/increasing-rent-a-room-relief

General description of the measure

This measure will increase the level of Rent a Room relief, which provides for tax-free income that can be received from renting out a room or rooms in an individual’s only or main residential property, from £4,250 to £7,500 per year. It also increases the level if an individual rents out rooms in a guest house, bed and breakfast or similar, providing that it is their main residence. The increase to the Rent a Room limit will apply from 6 April 2016.







No extra 3% stamp duty for buying your main residence.
£100 rent a week = £5,200 a year. Pays for council tax, water, gas and electricity, broadband and cable TV.

thanks but i already do this. earn enough from spare room to pay my monthly mortgage.

Pincher

Ah, yes, the caterpillar that is ready to blossom into a full blown landlord butterfly. I was renting two rooms out, in a four bed semi, so the salary that enabled the mortgage was mostly mine to squander. Happy Days.

Use the Force, Luke. Buy the right house, the Force will show you the Way.

economic

Pincher wrote: »

Ah, yes, the caterpillar that is ready to blossom into a full blown landlord butterfly. I was renting two rooms out, in a four bed semi, so the salary that enabled the mortgage was mostly mine to squander. Happy Days.

Use the Force, Luke. Buy the right house, the Force will show you the Way.

pretty sweet isnt it? i let out the spare room to my brother so its even easier and hassle free. i dont think i could do more then one spare room though.

boliston

I can't think of anything worse than being a live-in landlord!

I would always go with a property to suit just my needs plus other investments than a property too big for my needs with tenants taking spare rooms.