How to make the most

TerryC3

Hi all,

First time poster on here, so hopefully some of you can help out!
My friend has recently come into a bit of money due to circumstances and has no real idea how to make the most of this fortunate position to be in. Some background to help you guys out:

He works part time and rents his current property.
Doesn't live a particularly lavish lifestyle, and doesn't tend to have much money left over at the end of the month once bills, rent etc has been paid.
Doesn't have a great knowledge of finances, bank accounts etc (neither do I really hence coming here to ask for your opinions)
Doesn't want to open himself upto much risk and ideally would need a portion of the money to be easily accessible just incase (perhaps around 1/3 of it)

As I say, neither of us really have a great knowledge of this sort of thing, but one potential idea we've had is to 'buy to let' a place with another friend (so they have 50% ownership effectively but at least some investment there)

Would this be a good idea do you guys think? Also, what other options would be out there for someone not wanting to open themselves upto too much risk, but equally not looking to make huge gains, just to ensure the money is used properly and not wasted.

Thanks a lot for any help you can offer! I really do appreciate it.

Zero_Sum

If he rents his current property, instead of BTL why not look at buying is own place?

xylophone

Is he in a position to get a mortgage for a home of his own, using part of the windfall as a deposit?

TerryC3

Sorry I probably should have touched on that!
He doesn't own his own property as he wants to avoid the stress of being a homeowner. He is almost 60 and separated. He was never in charge of handling bills etc, and so prefers renting and having peace of mind that should anything go wrong then he is covered.
The person he is looking to 'buy to let' with is the one that would look after the running of the property - my friend is purely providing half of the capital.

xylophone

The person he is looking to 'buy to let' with is the one that would look after the running of the property - my friend is purely providing half of the capital.

Being a landlord could prove even more stressful.

Has your friend obtained a state pension forecast?

https://www.gov.uk/check-state-pension

Does he have any private pension provision/is he currently contributing to a pension?

How much money is involved?

Zero_Sum

BTL can be a nighmare & can cost a fortune if you get a bad tennant.
At his age, (and not wanting any risk or hassle) id probably stick it in a decent interest bearing account & have some nice holidays

Bravepants

There is a degree of risk because your friend would effectively be sinking his entire capital into one single business.




I guess it boils down to how well he knows his potential partner and how good a friend he is.



Suppose his friend goes away on holiday for a time and during the time the tenant requires a problem to be resolved, would your friend be willing to step in and sort things when required?



Also, is he willing to take the risk that he may end up with an awkward tenant; non-payment of rent, damage to property, demands for repairs etc.?

Alexland

Has he considered buying a leasehold property to live in for himself? Much of the hassle of property ownership is done by the managing agent so he would only need to maintain the interior. If buying for the long term then probably worth looking for one on the ground floor.

TerryC3

xylophone wrote: »

Being a landlord could prove even more stressful.

Has your friend obtained a state pension forecast?

Does he have any private pension provision/is he currently contributing to a pension?

How much money is involved?

He doesn't have any private pension sorted - so this money and whatever he does with it will be an added bonus on top of his state pension

TerryC3

The person we know very well and has been a family friend for 20+ years. He is younger and is happy to takeover the running of the property, he just can't afford to do it solely on his own finance wise which is where my friend came in.

The idea with the BTL was so that we could put aside a portion of this windfall into an investment that would - fingers crossed - appreciate in value over time (due to him not urgently needing this money at present)

Would anyone else have any ideas on possible uses? He isn't looking for massive gains from any investment, just something that will help him out a little and make the money go further rather than it sit in some bank account gradually decreasing due to cost of living etc.

Thanks so much for all your replies btw!!

Katiehound

I think it would help folk to give you some advice if they knew the ball park figure- 'coming into a bit of money' could be anything from £5k to- the sky's the limit!

There are plenty of bank accounts where money could be earning 'a little something extra' but the interest is on small amounts and generally requires juggling with DDs and the like.

If he is only going to get a state pension that would be somewhere I would think to start- IMHO