Investment dilema

johnsmith2008

My partner and I are in the very fortunate position of having no outstanding debt apart from a £130K mortgage. We are both working full time so have no problem meeting the payments. We also have a £40k inheritance that is currently sitting as an IASA and premium bonds. 

We have been planning to use the £40k towards a mortgage on a small buy to let, and have a location nearby with properties around £100k in a good rental market with a good return achievable (rent of about £500-£600 pcm). Because of the current situation we have put the plans on hold, until we see the effects of the pandemic on property prices etc.

We are now looking at adding a small extension to our house, which will cost about £40k… We cannot decide if we should stick to the initial plan of a buy to let and add any extension to our current mortgage, or if we would be better forgetting that and just paying the extension off outright.

Would be grateful for any advice anyone has.

foxy-stoat

Keep it easy and simple, use the cash for the extension.  I wouldn't want to become a Landlord at the moment and use the cash savings in the hope that the current lender will allow you to pull out £40,000 equity out.

Better for me if you cash in your premium bonds NOW - I only won £50 the other day and it will increase my chances of winning !