What would be the best way to invest £100,000 for regular income?

philip1427

I have a lump some of money sitting in a bank account. I would like to draw some income to get through university in addition to my part time job. I would be grateful if you had some ideas of investments which would prioritises income and some growth to contract attrition from inflation,

Thanks in advance

mb1986

If you have £100k. I would seriously consider a Buy To Let mortgage (albeit there is a risk involved in tenants not paying). Let's say you put 25% down on a £70,000 home which is £17.5k + fees, lets say £20k as a ball point figure, and you then spend £5k doing some cosmetic repairs (if you get the property in a habitable state). You're then in to it for £25k of your investment, and you've got a buy to let mortgage of around £130-£140 (estimate, haven't done calculations). You could rent the property out for £525 depending on the area giving you a net profit of around £390 or so.

You could in theory do this four times, bringing in £1560 a month. This doesn't include insurance, any void periods etc... You could then in theory remortgage the properties after 6 months, draw money out and repeat the process....

Not sure if this is the type of ideas you're looking for

philip1427

mb1986 wrote: »

If you have £100k. I would seriously consider a Buy To Let mortgage (albeit there is a risk involved in tenants not paying). Let's say you put 25% down on a £70,000 home which is £17.5k + fees, lets say £20k as a ball point figure, and you then spend £5k doing some cosmetic repairs (if you get the property in a habitable state). You're then in to it for £25k of your investment, and you've got a buy to let mortgage of around £130-£140 (estimate, haven't done calculations). You could rent the property out for £525 depending on the area giving you a net profit of around £390 or so.

You could in theory do this four times, bringing in £1560 a month. This doesn't include insurance, any void periods etc... You could then in theory remortgage the properties after 6 months, draw money out and repeat the process....

Not sure if this is the type of ideas you're looking for

Hi there! Thanks for your input. This is something I would consider doing when I am a little older. I'm at university at the moment so I don't think banks would give me a couple of mortgages seeing I have no real income bar a part time job in as a pharmacy dispenser.

Is there anything I could do which would be more passive? I don't want to waste my money by sticking it into a bank account with 1% interest

eskbanker

There are any number of investment products oriented to income rather than growth - sites such as TrustNet offer the ability to filter accordingly.

Alternatively other options include P2P or property - if you buy to let then this brings an income stream (when occupied) or if you buy your own place to live it doesn't actually deliver income but averts outgoings for a similar net effect.

mb1986

Agreed, leaving it in the bank is pointless at the 1% interest. I got started in properties when having a full time job and 3 kids, it's manageable and you shouldn't have a problem if you operate via a LTD company.

Anyway, some other options I'd consider is P2P lending, maybe through zopa (I've heard good things). Matched Betting is another option but requires effort. I don't know how creative you are, but I've invested £1k in the past on website development/apps/games and seen steady profits each month.

I'd stay clear of anything that involves the Stockmarket unless you are savvy, just a word of warning.

In regards to Zopa P2P lending, I think that only stands at 3.9%

philip1427

mb1986 wrote: »

Agreed, leaving it in the bank is pointless at the 1% interest. I got started in properties when having a full time job and 3 kids, it's manageable and you shouldn't have a problem if you operate via a LTD company.

Anyway, some other options I'd consider is P2P lending, maybe through zopa (I've heard good things). Matched Betting is another option but requires effort. I don't know how creative you are, but I've invested £1k in the past on website development/apps/games and seen steady profits each month.

I'd stay clear of anything that involves the Stockmarket unless you are savvy, just a word of warning.

In regards to Zopa P2P lending, I think that only stands at 3.9%

Operate via an LTD company?

greenglide

I'd stay clear of anything that involves the Stockmarket unless you are savvy, just a word of warning.

So you are quite happy to suggest that the OP buys BTL, P2P and, scarily, matched betting and website development but suggest staying clear of S&S investment because they need to be "savvy"

The OP hasnt given sufficient information to make any of these suggestion.

We need to know what the long term plans are for this money. S&S investments may well be the best home for this in the longer term but not if the plan might be to purchase a home after leaving university (assuming the OP does not already have a home).

A HTB ISA or a LISA (held as cash rather than S&S) may be appropriate for some of it.

bostonerimus

Assuming you are in your 20's I wouldn't be thinking explicitly about income. So I'd put your lump sum in a low cost equity tracker and just spend the yield/dividends and maybe some of any capital appreciation. Also, at your young age it's a shame to spend the gains rather than reinvesting them so why not get a part time job for some extra income.

xylophone

to contract attrition from inflation,

Sounds worse than contracting measles....:)

An article here discussing strategies to counter the effects of inflation

http://www.moneyobserver.com/our-analysis/how-to-inflation-proof-your-portfolio

may be worth a look.

Eco_Miser

philip1427 wrote: »

I have a lump some of money sitting in a bank account. I would like to draw some income to get through university in addition to my part time job. I would be grateful if you had some ideas of investments which would prioritises income and some growth to contract attrition from inflation,

http://monevator.com/category/deaccumulation-2/ lists a series of articles, primarily intended for retirees, but they may be suitable for you too. Look elsewhere on that site too.
Note that capital values [STRIKE]can[/STRIKE] will fall and since you will be spending the income, you have no chance of compounded growth, as seen in many investment charts.
Also the three years of a typical university course is generally considered too short for investments.

Thrugelmir

philip1427 wrote: »

I have a lump some of money sitting in a bank account. I would like to draw some income to get through university in addition to my part time job. I would be grateful if you had some ideas of investments which would prioritises income and some growth to contract attrition from inflation,

Thanks in advance

Well you could start depositing money into a cash LISA. This would gain you the 25% bonus if you were to buy a house at a later date.