Investment advice

[Deleted User]

First time here so apologies for anything I do wrong in advance.

i am looking for some advice on future investments, my background is as follows 

I am a 38 year old man living in the north east I own a 130k home with approx 80k on mortgage 

I have been a buy to let investor for almost 20 years buying/selling/renting various properties over the years.

i currently have 3 properties rented out giving me a gross income of £1450 a month I also have a PAYE income of approx 45k a year.

due to circumstances and recent relentless Negative changes to the buy to let market I have decided to sell my remaining rental properties, this will leave a net amount of approx £180k.

my question is what do I do with the money? I am considering paying off my home mortgage leaving in the area of £100k to invest.

I have no desire to do anything further with property as recent tax changes and legislation have made it unbearable.

any advice would be appreciated and as I said before sorry for anything I have missed out/ been unclear about etc.

jonesMUFCforever

The advice that would be given by this section of the boards would be holidays, holidays and more holidays!
Perhaps you could ask this in the Investment board?

Voyager2002

I suggest that you discover the delights of business class on Oman Air. A stopover in Oman would allow you to hire a 4WD and explore some spectacular mountainous landscapes. Then there are many tempting destinations that would be within your budget...

pogofish

As you clearly agreed to having read and understood the basics of forum choice/navigation as part of your signup, why on earth did you decide to post this here..?

heatherw_01

This forum is just for reporting holiday deals, will move to a better forum for you

Hi, we move threads if we think they’ll get more help elsewhere (please read the forum rule) so this post/thread has been moved to another board. If you have any questions about this policy please email forumteam@moneysavingexpert.com.

[Deleted User]

See a financial advisor or DIY

eskbanker

mick2206 said:

my question is what do I do with the money? I am considering paying off my home mortgage leaving in the area of £100k to invest.

Now that everyone's had their fun, time to move on to answering the question!

Many would advocate paying off your home mortgage - depending on its rate and what else you might choose to do with the capital then this may not be the most sensible route financially but it is a great psychological boost.

In terms of what to do with the rest, much depends on the rest of your financial circumstances, including when you feel you might need access to the money.  Do you have an adequate savings pot in readily-accessible form, for emergencies and to cover, for example, extended unemployment?  What are your pension arrangements?

Investing may well be part of the answer, if there's a surplus that you don't need access to for the next 7+ years - there are plenty of newbie investor threads on here and there are plenty of sites suited to inexperienced investors wanting to research, 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.

You might also get some ideas from https://ukpersonal.finance/flowchart/

itwasntme001

How exactly have the changes made it unbearable?

For the tax changes, you earn £45k and your rental income gross is £17k.  Contributing £13k to your pension will bring your total gross income below £50k this year and so you will effectively be unaffected by the tax changes.

As for the legislative changes, I would ignore the recent short term "fixes" with no eviction due to the pandemic as it will be temporary.  There are other changes more longer term most notably section 21 abolishment but you still have section 8 to fall back on.  With adequate insurance in place I fail to see how legislation changes cause you to make such a rash decision in selling your whole portfolio.

Unless there are other reasons to sell such as prospects for tenant type and demand looking bleak for your areas or reasons to believe capital growth will not be adequate enough for your total return targets or even you are finding it a hassle (although at your age it probably is not a valid excuse), I would think very carefully as to why you want to sell.

msallen

Have you taken Capital Gains Tax into consideration? If not (and assuming the properties have increased in value, and you have no other capital gains) it may be worth considering selling one property a year instead.

Albermarle

Just to add to all Esbankers good points about investing in stocks & shares.
The historical trend of returns from investing in equity/share markets is very positive, and all long term investors should see a return above inflation ( unless they do something drastically wrong ) assuming that this trend will continue in the future .
However in the short term these types of investment can be volatile, and sudden  drops every couple of  years are the norm, with a large drop on average every seven years . So you need to be prepared to ride out the volatility and not sell out when the going gets rough. It is possible to choose potentially less volatile investments , but usually this comes with less growth in the long run.
So before choosing investments you need to have an idea about your risk tolerance . In other words what would keep you awake at night ? a drop of 20% ? 30%? 40 %