Investing whilst living in a housing association flat?

Jamderson

I live in a housing association flat in London.

I am due to inherit approx.  £80,000

I would like to know if I can buy a property as an investment.  

I cannot afford the flat I am in. It was valued many years ago and I remember there was a discount due to the number of years living here. With the sum of money that I am due to inherit and my salary I still cannot buy my current home.

I’m in my mid-forties and want to plan for the future. So, my question is can I buy a place to rent out? I’m looking at ways to invest the money.

I really don’t know what to do. I could give up my current home, use the money to buy somewhere far from where I currently am, but then I would have to find a job elsewhere and leave behind friends and family. Easier said than done.

I don’t want to put my tenancy at risk. Would it be safer to invest in stocks and shares/ private pension and forget buying a place? Any other ideas on how I can invest the money?

I do not want to sublet my current home nor do I want to give it up.  I am lucky to be where I am and would never be able to afford anything similar. Certainly not in London.

Any advice would be much appreciated.

If anything needs clarifying please ask and I will try to answer ASAP.

theartfullodger

I guess so, buy strongly suggest you review tenancy agreement & any other paperwork you sign up to when you started your current tenancy.  

What would the right thing to do be??

diggingdude

Speak to your housing association and ask for their view? 

dimbo61

do you receive any benefits ?
If you have £80,000 sat in the bank you may well lose certain benefits

Jamderson

No, I'm not on benefits. I work full time.

theartfullodger

NB  Renting out property doesn't always make money.  tenants from hell (or agents..), voids (gaps between tenancies), repairs, tax increases etc etc etc

& if house prices go up likely have to pay CGT.

There are problems: Financial & with the people you deal with (tenants have a right to your actual address...)

Jamderson

I'm aware renting out property isn't easy. Nothing is.

I've been looking into stocks and shares too. This is hardly a walk in the park.

At the end of the day though, a large sum of money sitting in a bank account with crap interest rate is a waste.

thegreenone

Do you pay into a co. pension?  If so, could you invest your 80K in the best interest provider at the moment and take the monthly interest payments.  Then, bump up your payments into your pension to offset this and your employer should match.  You would need a serious look at any tax implications. 

I am sure someone will come along to say whether this is a good idea (or not - happy to be overruled) but my thought is that with you and your employer adding to your pension it will be very beneficial in the long run.  You won't have to move, will have cash behind you and should have good pension provision to enable you to stay long term without all the hassle of the BTL.

Jamderson

I pay into co pension. I work in NHS.

JonVarnas

Jamderson said:

I live in a housing association flat in London.

I am due to inherit approx.  £80,000

I would like to know if I can buy a property as an investment.  

I cannot afford the flat I am in. It was valued many years ago and I remember there was a discount due to the number of years living here. With the sum of money that I am due to inherit and my salary I still cannot buy my current home.

I’m in my mid-forties and want to plan for the future. So, my question is can I buy a place to rent out? I’m looking at ways to invest the money.

I really don’t know what to do. I could give up my current home, use the money to buy somewhere far from where I currently am, but then I would have to find a job elsewhere and leave behind friends and family. Easier said than done.

I don’t want to put my tenancy at risk. Would it be safer to invest in stocks and shares/ private pension and forget buying a place? Any other ideas on how I can invest the money?

I do not want to sublet my current home nor do I want to give it up.  I am lucky to be where I am and would never be able to afford anything similar. Certainly not in London.

Any advice would be much appreciated.

If anything needs clarifying please ask and I will try to answer ASAP.

Are you sure that you would want to be a landlord in the first place? It's quite an undertaking and responsibility, and certainly not all milk and honey. Personally I'd speak to an independent advisor about other options.

MalMonroe

You said this "At the end of the day though, a large sum of money sitting in a bank account with crap interest rate is a waste." But it isn't a waste at all because you'll be £80k richer than you were before, even if the money doesn't accrue any interest. 

It seems that you are really happy and very satisfied with your home and your job and so trying to move just because you have an inheritance would cause unnecessary upheaval. 

I agree with what JonVarnas says above. You could arrange a one-off meeting with a financial adviser to discuss all your options. And I think being a landlord is just too much hassle. Especially if you work full time. It's fine if you manage to get good tenants but not everyone does.