15-20K to invest

Moneygrabber89

Hi,

So I have recently move house and downsized as become single.

I have since bought another property and had it done out to a nice standard but I still have 20K left over from equity.

I was wondering what people would class as a good investment with this money. I am 30 years old so don’t mind it being long term.

I live in the Durham area (North east) so house prices are really cheap. Could get a 2 bedroom house for approx. £70,000 in a good / popular location for renting (near schools, motorway etc.)

Is this a good investment? I have also considered a build to let mortgage however this seems a lot more complicated.

The only other option I can think of is to put this in a savings account however it seems the interest I will get from this will be very little.

eskbanker

I think most on here would advocate firstly ensuring that you have a rainy day emergency fund in readily accessible cash form, i.e. about six months of income/expenditure as a buffer.

Also, make sure you have adequate pension coverage, at the very least paying in enough to maximise employer contributions, but preferably more than that, depending on generosity of scheme.

If/when you're ready to start investing after addressing the above, then I believe that most would recommend collective investment products such as funds, etc, rather than venturing into the buy-to-let property market, which is becoming less tax-efficient and being a landlord entails hard work, or do you already have two properties (your OP could be read two ways)?

Moneygrabber89

Thanks for your reply and advice.

I pay 4% in my pension and my employer contributes 12.4%. (Yes I know its extremely generous pension).

No I currently own only 1 property as I sold the 1 I was living with my ex – hence the equity.

I don’t know what you mean by collective investment products such as funds, et.

I was thinking of going along the route of buy to let and pay interest only. This would generate quite a good payment each month but obviously id have to take into consideration repairs and if house stands empty etc. and fees for management.

xylophone

You'd have to take into account the work that being a landlord involves and the hassle if it doesn't work out.

See post 3
https://forums.moneysavingexpert.com/discussion/5821980/renting-out-a-property-what-do-i-need-to-do

Moneygrabber89

Yeah my friend rents out 2 properties and has told me risk etc and costs associated.

Do you know of a better way to invest this money?

eskbanker

When you asked the same question three months ago, the overwhelming consensus was that you were taking a very optimistic view about the risks, costs and difficulties of becoming a first time landlord - are you hoping to get different answers this time that are closer to your opinion?

https://forums.moneysavingexpert.com/discussion/5993573/first-time-landlord-advice

I'd reiterate my earlier recommendation (also expressed in your previous thread) that mainstream equity-based investments are likely to be more suitable, assuming you have a separate emergency cash pot ring-fenced? Newbie investor threads on here typically highlight reading material at sites suited to inexperienced investors, such as:

https://www.moneyadviceservice.org.uk/en/articles/investing-beginners-guide
https://www.hl.co.uk/beginners-guides/investing
http://www.monevator.com
http://kroijer.com/
http://diyinvestoruk.blogspot.com/
https://www.ifa.com/indexfundsthemovie/

as well as bearing in mind a number of key points of principle:

1. Only consider investing once you have adequate accessible cash reserves.
2. Only invest if you're happy to commit for at least 5-7 years and preferably 10-15 or more.
3. Diversify - ignore individual shares, etc, and concentrate on collective investments that spread your eggs over many baskets. Global multi-asset funds are a good place to start, available from the likes of HSBC Global Strategy, Vanguard LifeStrategy, Blackrock Consensus and L&G Multi-Index.
4. Choose what you want to invest in before considering which platform to hold it/them on.
5. Keep an eye on ongoing costs for funds and platforms - they shouldn't be the primary consideration but can make a noticeable difference over the long term.
6. Use a Stocks & Shares ISA as a tax-efficient wrapper to avoid liability for income and capital gains tax.

Moneygrabber89

weird comment.

the detailing here is far too much for me to understand. I know a few landlords who do very very very well

eskbanker

Moneygrabber89 wrote: »

weird comment.

the detailing here is far too much for me to understand. I know a few landlords who do very very very well

Your money, your choice of course, but what seems weird to me is to post multiple times on here, phrased as if you were asking a question, when you've already made your mind up about what you want to do and won't listen to a word said against it!

I'm out....

DrSyn

1. Watch both of the following:-

http://www.kroijer.com/

https://www.ifa.com/indexfundsthemovie/



2. Then consider investing in a low cost Global Multi Asset Fund, such as one of those below:-

Vanguard Life Strategy
HSBC Global Strategy
L&G Multi Index Funds
Blackrock Consensus
Architas Passive

These have wide diversification while minimising risk, at low cost.

Vanguard Life Strategy (VLS) seems the most often mentioned.

https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds?intcmpgn=lifestrategyfunds_learnmore_link

Moneygrabber89

thanks mate
and thanks to eskbanker for leaving

danm

Moneygrabber89 wrote: »

thanks mate
and thanks to eskbanker for leaving

If Eskbanker's first post was too much for you, then I would suggest you think long and hard whether you should risk any money.


This is something you seemingly do not understand and unwilling to take helpful and simple advice.


if this 15K is your first 'investment' then the simple reality is not many people on this board would suggest you invest in BTL.