How would you achieve positive passive income with £150,000 and a 1 bed property?

Zockedi

My father was a builder previously - back-breaking work - so relative to that he considers being a landlord no work at all. Everything in life is relative. It is nothing for him to do the odd repair or to plaster the wall of a new property.

My mother is good with DIY. Prior to being a landlord she was doing soulless jobs like working in a cafe for peanuts. So, seeing her properties soar in value and she considers being a landlord no work at all.

I completely understand that they are the exception not the rule, but because it has been so easy for them they do not consider it risky or even close to hard work. They do so many checks on tenants and check in on the properties every 3 months. That's nothing compared with being a builder for a tough foreman and doing manual labour all day, not just when something breaks down. They get really long-term tenants and no issues. But they are a different generation - the right generation for being a landlord I guess. Properties were cheaper to buy back then in proportion to income. The laws were different.

Things have changed since then but they are already set up and have paid off their mortgages. They cannot recommend being a landlord enough. They don't trust the stockmarket or other forms of investment one bit.

As for me I think the future like the present is digital not in property but I am so grateful for the gift and want to make the best out of it.

AnotherJoe

Given that bombshell I think you have two alternatives and possibly a third
1. Produce a business plan showing the inflows and outflows and loss of money under current tax legislation and ask if they still want you to go ahead.
2. Take the money plough it into property and if it all goes bad well no mattter you'll get out with some money which is better than none.
3. Stick the money Ina bigger residential house and hope for big rises in price. Your mother may not regard this as property investment though.
FWIW your grandfather must have been doing stupidly risky dealing to lose all his money.

letitbe90

If you hate being an IT contractor (personally I love it, easiest job in the world to make 6 figures), there is no chance in hell that you’d suddenly enjoy being a landlord on the basis of “my own boss”. People become landlords for many reasons, but enjoyment? Oh dear no.

Also websites and stuff is another area which is meh in that, it’s low’ish skill work (in the grand scheme of development) with meh pay even as a freelancer.

That is just my opinion though having been in the industry of developing software for 5+ years.

Zockedi

I keep trying to reply to individual posts but they just end up as a general reply. I am probably pressing the wrong button.

I think ISAs tied to the stock market are a great option and I guess I will do that with my income from being an IT contractor. For as long as I can bear it anyway. I have a website and hope that will take off and will generate money that I could then use in other investment areas.

Anyway, I can't thank everyone enough for their feedback so far. It's gratefully appreciated.

G_M

Zockedi wrote: »

I keep trying to reply to individual posts but they just end up as a general reply. I am probably pressing the wrong button.

....

Hmm..... I see why you want to get out of IT.......:eek:


Press the 'quote' button beneath the post you wish to reply to!

Zockedi

I hate being an IT contractor because I hate office life, office politics, office gossip and silly deadlines. I hate having a manager.

If none of the above factors are present in a job then that is a huge plus for me. I am very independent. I do my best work alone. I love problem solving.

I know everyone here hates the job of landlord but I am not very typical. I would prefer being a street sweep with no one to report into than being an IT contractor with someone to report into.

It is only the money that keeps me there. And I am only interested in the money so I can escape the rat race and never, never, never have to go back. We are just different. I envy you that you like office life. It is not for me.

Having said all that, street sweepers do have someone to report into and so I'd much rather run my own website. I love it so far. I don't create websites for others I own one. I have no plans to freelance. My plan is to continue to create an engaging site around my niche topic, gain a lot of readers and go into paid partnerships with other brands.

The website has attracted some high profile fans who have promoted it for free but unfortunately does not yet have a wide readership. It has only been in existence for a few months. Only time will tell. Let's be optimistic because if I thought IT contracting was the end I'd run away and go off grid and that wouldn't be optimal in the long term when I'm in my 80s.

Thrugelmir

letitbe90 wrote: »

I would personally not pay off the mortgage. The interest rates are low enough that the money is better off being invested in bonds/equities via ISA's/Investment accounts (Vanguard, AJ Bell, IWeb, Welfify, Nutmeg, Fidelity to name a few platforms).

Interest rates are low for a reason. Doesn't equate that investment returns are guaranteed to be better. Bond yields/ redemption at maturity are below borrowing rates in the main.

AdrianC

Zockedi wrote: »

I know everyone here hates the job of landlord but I am not very typical.

"Hates"? No.

We're just realistic. And we understand how to look at the numbers so they tell the truth, not massage them to optimistically support blind preferences.

Zockedi

AdrianC wrote: »

"Hates"? No.

We're just realistic. And we understand how to look at the numbers so they tell the truth, not massage them to optimistically support blind preferences.

Yes. And you're completely right. The numbers don't stack up. That's actually why I posted in the first place. I couldn't make them stack up. Not for London anyway. If I look outside of London things make a bit more sense.

I know I have loads to learn. Same as with any new job. I don't think my preferences are blind as I have two landlords as parents. I do understand what the role entails. it is just that the role has become MUCH harder than my parents realise.

If I was around in the 1960s being a landlord would have been the smartest thing to do. Now, I recognise it is not. But there is still money to be made if you are wise. I have much to learn before I become wise about all of this but I think it is achievable.

The government always ultimately protects property owners. Especially Tories. In fact their current penalising of landlords is exceptionally strange.

Zockedi

Thrugelmir wrote: »

Interest rates are low for a reason. Doesn't equate that investment returns are guaranteed to be better. Bond yields/ redemption at maturity are below borrowing rates in the main.

You say that interest rates are low for a reason... So, would you pay off the mortgage or not?