Haven't a clue what title to give this

Legacy_user

My brother has £90,000 after being bought out of the family home by his wife. After paying child maintenance (which he certainly doesn't begrudge) he is only left with about £850 per month and he can't get a big enough mortgage to buy anything here in N Ireland. The wait for a Housing Executive (Council) house here is at a 5 year high so his only remaining option is a private rental which is more expensive.

He is loath to waste the capital and wants to invest it or put it in savings and use whatever interest he gets to help pay the rent. So can anyone advise where would be the best place for him to put the money? He has already used this years mini cash ISA.

caliston

A few standard questions:

How much is the rent likely to be? How much is it likely to increase over the years?
How long does he want to keep it for, before he might need to withdraw any of it/change the interest arrangements?
How much risk is he willing to take with the capital? Would it bother him if he lost 10%, 20%, 30%, more? How much volatility can he cope with in the income (if the payments took a drop for a few months what would be the worst case he could cope with? What if no payments at all?)

If you can give some more details it'll help others suggest routes to look into.

System

The purpose of the investment would be to generate a reasonable supplementary income to help with his living costs so I suppose he wouldn't want to lose/risk any of the capital. I think the only reason for withdrawing funds would be to pay for any globetrotting he might want to do.

Currently you would expect to pay approx £600 to £650 for a 3 bedroom private rental property in our area which would include rates (council tax) so as you can see that doesn't leave much out of £850 per month to live on.

PasturesNew

Pam17 wrote: »

The purpose of the investment would be to generate a reasonable supplementary income to help with his living costs so I suppose he wouldn't want to lose/risk any of the capital. I think the only reason for withdrawing funds would be to pay for any globetrotting he might want to do.

Currently you would expect to pay approx £600 to £650 for a 3 bedroom private rental property in our area which would include rates (council tax) so as you can see that doesn't leave much out of £850 per month to live on.

Why would he need a 3-bed house to rent?

chesky369

How much would a two-bedroom flat be to buy in your area? If your brother has £90k, it's a hell of a deposit, even though his income is not terribly high. I'm sure he would end up paying as much in rent as in mortgage repayments and he'd have nothing left at the end to show for it.

missile

Why not a 1 bed flat? Does he really need / want to provide bedrooms for kids to visit, how often would THEY want to stay?

chesky369

I think most parents - whether fathers or mothers - would agree that they at least should be given the option of being able to stay with their dad.

missile

I feel most parents would agree, what the kids want is more important and it is they who ought to come first

chesky369

that's why I said 'they should have the option' - by this I meant the children as well as the parents; however, a two-year old probably isn't in a position to articulate a preference - if indeed he or she wanted to. I don't see any need to take such a high moral tone simply because I suggested a two bedroomed flat.

System

The children ( 1 of each) are 11 and 9 and are too old to share a room and at the moment they certainly do want to stay over with their father especially since their mum has moved her boyfriend in with them.

A 3 bedroom property would be preferable in this instance but even with a deposit of £90,000 he can't afford to buy one on his own. Anyway now is not the time to buy property in N Ireland as the bubble is bursting as we speak and house prices are starting to drop. It wouldn't make sense to buy even if he could afford it.

So rather than fritter away the capital solely on rental payments he wants to invest wisely to generate extra income and hopefully have some capital to use as a deposit if he meets someone in the future.

System

Just bumping this up to try and get investment/saving suggestions.