Best income investment

Nickynoo1968

I recently inherited a large sum and have bought a house outright. I have 300k left. What is the best way to invest it to be able to live off. I can live on 12k a year. I was thinking of buying either one or two properties to rent out. Or possibly a holiday let. 

moneysavinghero

You would only need 4% interest a year to get £12k. If you are sure that you will be locking the money away for the longterm and won't need to be accessing it, then maybe an income fund would suit your needs. Less hassle than becoming a landlord, although if you wont be working then maybe you would be glad of a bit of work managing your buy-to-lets.

dunstonh

 I was thinking of buying either one or two properties to rent out. Or possibly a holiday let. 

What is your experience of being a landlord?    What sort of rental yields do you think you can achieve after you have paid an agency?  (then deduct cleaning costs and on-call maintenance costs)
 

What is the best way to invest it to be able to live off.

There is no one best way.  It can vary with people as well, not just on opinion but on their tax position, available allowances etc.
You haven't really given us much to go on.

Thrugelmir

Channel as much as you can into a pension. 

tacpot12

The best return will come from buying the most properties you can (possibly by borrowing more money), and managing their rental(s) yourself. If you need to live very close to where the rental properties are going to be to fully manage them yourself. By "fully manage", I mean find and vet the tenants, take deposits, chase them for rent, deal with property repairs 365 days a year and at all times of the day and night, doing the inventory at the start and end of the tenancy and cleaning the property.  Once you start paying other people to do all of this, the income rapidly reduces to the point where you might be better off sticking it into the stock markets and just let the income roll in. 

If your current house is in a student area, rent to students, if it is an area where people want to come on holiday, do holiday lets, and if it is a nice residential area, do conventional private renting.

There are lots of regulations about renting, so only go into it if you are prepared to operate it as a business.

Albermarle

I can live on 12k a year

This seems unrealistically low for someone with money in the bank .

Otherwise you need to supply more info, like your age ? any dependents? not working? pension provision? etc

bostonerimus

The first thing should be to pay off any high interest debt you have and then put a year's spending in the bank for emergencies. I would use the rest to increase your pension payments and fund an ISA. I would use a global equity and bond tracker portfolio or a multi-asset fund with a risk level that you can live with. When it comes to taking income from your pension (assuming it is DC) and ISA I would take a total return approach so you take some dividends and sell some of the funds that have gained. 

You could add a rental property, but as you have already bought you house I would want to keep any extra real estate investments fairly small, maybe under 100k...depending on how much you already have in pensions and an ISA etc. Also rental property will lock up your capital. Having said that, rental property has worked out well for me, but it's a small fraction of my investments. It produces about 5% of the current property value in income after costs and there has also been substantial capital gains. But being a landlord is a commitment and can be expensive if you have to do repairs, pay a management agent or have bad renters. So before you buy a rental make sure you fully understand the numbers, risks and work involved in essentially running a small service business. As an example I just had to replace a dishwasher for my tenant (cost around $800 or 500 pounds) and was over there last week to unclog the bathroom sink and unjam and reset the waste disposal. I do most maintenance like that myself, but if you employ someone to do it the costs can add up.

Eco_Miser

Albermarle said:

I can live on 12k a year

This seems unrealistically low for someone with money in the bank .

Otherwise you need to supply more info, like your age ? any dependents? not working? pension provision? etc

What has the amount in the bank got to do with how much someone can live on?

Certainly if you've got plenty it's easy enough to spend more, but it's not compulsory.

Personally, I live on even less, mainly because there's nothing I particularly want to buy.

moneysavinghero

bostonerimus said:

The first thing should be to pay off any high interest debt you have and then put a year's spending in the bank for emergencies. I would use the rest to increase your pension payments and fund an ISA. I would use a global equity and bond tracker portfolio or a multi-asset fund with a risk level that you can live with. When it comes to taking income from your pension (assuming it is DC) and ISA I would take a total return approach so you take some dividends and sell some of the funds that have gained. 

You could add a rental property, but as you have already bought you house I would want to keep any extra real estate investments fairly small, maybe under 100k...depending on how much you already have in pensions and an ISA etc. Also rental property will lock up your capital. Having said that, rental property has worked out well for me, but it's a small fraction of my investments. It produces about 5% of the current property value in income after costs and there has also been substantial capital gains. But being a landlord is a commitment and can be expensive if you have to do repairs, pay a management agent or have bad renters. So before you buy a rental make sure you fully understand the numbers, risks and work involved in essentially running a small service business. As an example I just had to replace a dishwasher for my tenant (cost around $800 or 500 pounds) and was over there last week to unclog the bathroom sink and unjam and reset the waste disposal. I do most maintenance like that myself, but if you employ someone to do it the costs can add up.

You own a house you rent in America, and you occasionally fly over to unclog tenants sinks? Or do Americans use this forum too? Or did you import an American dishwasher?

kinger101

moneysavinghero said:

You would only need 4% interest a year to get £12k. 

Only 4%.  You clearly don't understand the concept of interest.  

DairyQueen

moneysavinghero said:

bostonerimus said:

The first thing should be to pay off any high interest debt you have and then put a year's spending in the bank for emergencies. I would use the rest to increase your pension payments and fund an ISA. I would use a global equity and bond tracker portfolio or a multi-asset fund with a risk level that you can live with. When it comes to taking income from your pension (assuming it is DC) and ISA I would take a total return approach so you take some dividends and sell some of the funds that have gained. 

You could add a rental property, but as you have already bought you house I would want to keep any extra real estate investments fairly small, maybe under 100k...depending on how much you already have in pensions and an ISA etc. Also rental property will lock up your capital. Having said that, rental property has worked out well for me, but it's a small fraction of my investments. It produces about 5% of the current property value in income after costs and there has also been substantial capital gains. But being a landlord is a commitment and can be expensive if you have to do repairs, pay a management agent or have bad renters. So before you buy a rental make sure you fully understand the numbers, risks and work involved in essentially running a small service business. As an example I just had to replace a dishwasher for my tenant (cost around $800 or 500 pounds) and was over there last week to unclog the bathroom sink and unjam and reset the waste disposal. I do most maintenance like that myself, but if you employ someone to do it the costs can add up.

You own a house you rent in America, and you occasionally fly over to unclog tenants sinks? Or do Americans use this forum too? Or did you import an American dishwasher?

The clue is in the name. Bostonerimus is an expat