What to do with 120k inheritance

jazzfriend100

Hi
I am 27 years old.

About to graduate with a music degree. Planning on travelling for a few years in a van conversion with partner.
Have no mortgage or debts.
10k in savings

And am about to receive between 110k-130k in inheritance.
I will only require about £600 p month to live whilst travelling and can make that online (mainly matched betting but also checking out affiliate marketing and amazon fba etc).
Any advice on what to do with the inheritance? Was considering buying to let hoping to yield £500+ pm.


Thank you in advance

atush

Well given you are a gambler, i would consider locking some of it away. In pensions, regular savers etc.

I would open a S&S isa and fill it.

BTL is a business, and you wont be around to run it-you'll be off touring in your van. And is now getting more heavily taxed so i'd forget that idea.

Are you planning to buy? You say you have no mtg. This money could help you get on the ladder once you are back from your wandering.

jazzfriend100

Not a gambler! Matched betting is risk free and I've been doing it for years! (Bets are always covered on another website). Never actually placed a 'real' bet.

Considering BTL on the grounds that I have family that can oversee the property in UK + we will be returning fairly often. Main concern here is the market post brexit etc... Also if there's any investment strategy that isn't likely to lose it all that would yeild 5-8% or if that's unrealistic.

tacpot12

Will you pay the family for their work overseeing the property? I expect they will want something to have to deal with all the issues that tenants throw up. Tenants call at anytime of the day or night in an emergency, which might be that they have locked themselves out, or have a blocked toilet, or their boiler is broken. You really need to be available to visit the property within 24 hours or be prepared to have decisions taken that will cost you a lot of money.

There is also the risk that your family members do not know the laws about property rental and so do something that results in you as the landlord being sued. Employ a professional letting agent will cost you about 12% of your income from the property, and you will also have costs for buildings insurance, landlord insurance, void periods, property repairs, cleaning etc regardless of whether you have a professional agent.

There is no investment strategy that will result in a yield of 5-8% and guarantee any capital appreciation. You can get a yield of about 5% initially, without any guarantee of how long this will continue for, you might only get back £80-90k worst case, or you might get £120K+ back. Property rental can result in losses of £5K-10K in cases where the tenant trashes the property and runs up large rent arrears. If the tenant doesn't pay, it sounds like you would have to cancel your trip, or at least start working to cover your costs.

On a more positive note - buying a property and renting it out would mean that you would have somewhere to live when you return to the UK, albeit that it will take time to evict the tenant. You would have some chance that the value of the property would appreciate, the property would be maintained, and there is some chance of a regular income while you are away.

atush

jazzfriend100 wrote: »

Not a gambler! Matched betting is risk free and I've been doing it for years! (Bets are always covered on another website). Never actually placed a 'real' bet.

Considering BTL on the grounds that I have family that can oversee the property in UK + we will be returning fairly often. Main concern here is the market post brexit etc... Also if there's any investment strategy that isn't likely to lose it all that would yeild 5-8% or if that's unrealistic.

Given you have 120K coming in, you might be tempted into more straight up gambling. So something to think about.

BTL is now heavily taxed- even if you have family around to collect your rent and take care of problems. But void periods, vandalism, collectimg rent from reluctant tennants is no longer balanced by nice gains. And forget brexit, people still need a place to live unless you are talking about high value london properties which go to those who dont live and work in the UK. Although an economy stiffled by a hard brexit isnt going to help you rent your house/flat esp if the local factory has closed down.

Ryhs_Moggy

You could give the £120k to me?

steampowered

If you go down the BTL route you will also lose all of the benefits associated with being a "first time buyer" - e.g. stamp duty reduction, lifetime ISA bonus, help to buy schemes.

elephantrosie

how is match bettings not gambling?

Anonymous101

elephantrosie wrote: »

how is match bettings not gambling?

Its not, you're able to cover all possibilities with multiple bets and either manipulate differences in odds or take advantage of offers to guarantee profit. I've done it for years, it isn't gambling.

There's a board on here if you're interested:
https://forums.moneysavingexpert.com/forumdisplay.php?f=41

Its absolutely not gambling.

Anonymous101

Anyway back to OP, I'd stick a chunk in my pension. Fill this years and next's ISA contributions and then keep the rest in as high interest cash account as possible.

BTL could be a good idea if you are looking to purchase a house and add value or purchase one you're happy to move into however I'd see it as too much of a bind if you're away for long periods and don't have a plan where you'll live on you're return. It could be that you need the cash that you tie up on your return for another property etc.

principlecounts

Stick it in Marcus. Then re-evaluate when you're in a stable situation in life.