My Plan

Interested!

I'm in my early 40s, no dependants.

I earn £32500, 6.5 % into pension, 25% into LGPS AVC (AVC all invested in Pru Global Equity)

I have approx £340k in various easy access savings accounts (I sold my house 3 months ago and now lodge with a friend, it's impossible to say how long this arrangement will last might be 6 months, might be forever).

I have LGPS AVC worth £18k and 22yrs in LGPS. I feel that I really need to do something with my cash to stop it being eroded by inflation and hopefully grow a bit as I'd  like to retire early or at least go part time. My thinking at the moment is to buy a house (that I'd be happy to live in) with approx half the money and rent it out. Then invest the rest (except for emergency fund) in something like Lifestrategy 60, fully utilising my ISA allowance each year. I'm struggling to get my head around buying a house as it seems to be a difficult market and I have no experience of BTL. I'd be grateful for any observations and suggestions, thank you.

csgohan4

Why do you think a BTL is worth it? Have you considered a business plan and crunched the numbers?

Have you looked at current and future regulation? Section 21 is under consultation and very much will be in the tenants favor, tax breaks have all but gone for example.

Have you considered having an investment strategy and then sticking to that?

The large amount of money you have primarily is to buy a primary residence in future? If it is, Stocks and shares is not suitable as they are long term, >10 years. a BTL is also long term and has significant overheads as well. 

Alexland

Do you particularly want to continue lodging with a friend or would it be easier and more tax efficient to just buy a home and maybe rent a room out tax free?

Apodemus

Alexland, I guess this might depend on the interpretation of "friend"!

Alexland

Apodemus said:

Alexland, I guess this might depend on the interpretation of "friend"!

I did wonder that.

Albermarle

BTL is better for people with experience of being a landlord and/or some good  DIY or building skills .
As already said a lot of the good tax breaks with BTL have disappeared, meaning margins are thinner and easily lost if you have months without rent or you have to pay people to maintain the property.

With the money you think you might need to buy a house in the next 5 to 7 years , it is better to keep it somewhere safe .
Fixed rate savings accounts for example.

For money you want to commit to a retirement fund , then it needs to be invested in pensions, S&S ISA's etc 

maxsteam

Interested! said:

 I have no experience of BTL.

Then either don't do it or try it with a small amount. Not everyone can make it work.

csgohan4

maxsteam said:

Interested! said:

 I have no experience of BTL.

Then either don't do it or try it with a small amount. Not everyone can make it work.

Not sure you can try BTL with a littLe bit. 

OP needs to research their options

maxsteam

csgohan4 said:

maxsteam said:

Interested! said:

 I have no experience of BTL.

Then either don't do it or try it with a small amount. Not everyone can make it work.

Not sure you can try BTL with a littLe bit. 

Sure. But it is possible to try it with a lot less than £340k.