Passive Income Needed - £100k to spend

ejchopshop

We are in a situation where we have a large house with good rental prospects, a small mortgage and some money invested in funds.

We want to take a year or two out and travel (without working). We are super frugal and very good at budgeting, but are trying to decide the best way to create a passive income while we are away.

We plan to rent out our house for a chunk of income but then have around £100k to do something with. Do we buy a flat/house to rent out? Do we invest it somewhere? What would you do with it to provide the best passive income?

I guess we have around 2 years before we leave so had even though along the lines of buying a flat to airbnb (we live in a seaside holiday destination), trying to earn a bit more and then possibly even buying a second flat with a mortgage. I'm not sure logistically if it's just worse though to have such a liability when we are out of the country and if some other form of investment might be more sensible. 

Need to start thinking and planning for it now as we want to have enough income ideally to live off and if not quite that much, we just don't want to be burning through our savings. 

TIA

grumbler

With regard to BTL, ask on House buying, renting & selling   board - and, I think, you'll get many sceptical replies.

Investing for few years isn't a good idea either, especially for income.

If so, you are left with savings accounts and Premium Bonds.

ejchopshop

Thanks for your reply, I'll have a look there. I feel pretty stumped at this point. We've invested in funds for 10 years and have done really well with them to date but obviously it's money we didn't need and it was always for the long run. A bit of money is in savings accounts. Just can't figure out what we can do with this money to best provide a bit of income! But aware that sooner is always better so need to decide soon.

grumbler

Even easy-access accounts are paying now 5%+, that AFAIK is better than most low-risk investments in the recent two years. However, the rates can go down.

If you want guaranteed income have a look at fixed-rate accounts/bonds. Not sure if the interest ('income') can be paid into an external account if you really need this.

ejchopshop

Yes, that's what I recently did with a small bit of money. I put it in a 12m fixed rate ISA. I've even gone as far as thinking maybe we should be more active with it, buy a van or two, turn them into campers (hubby is a builder & van enthusiast) and sell them. Or buy a flat, renovate and sell (we're on reno project 3 so have some experience). Keep that money for our time away and then stash the rest in savings or longer term investments. 

Eco_Miser

ejchopshop said:

Yes, that's what I recently did with a small bit of money. I put it in a 12m fixed rate ISA. I've even gone as far as thinking maybe we should be more active with it, buy a van or two, turn them into campers (hubby is a builder & van enthusiast) and sell them. Or buy a flat, renovate and sell (we're on reno project 3 so have some experience). Keep that money for our time away and then stash the rest in savings or longer term investments. 

Neither converting vans into campers nor renovating flats are passive investments, indeed they are not what are normally considered active investments either - they are businesses.

What do you intend to do with the £100k after your break?

Why not put what you need for your long holiday into high paying deposit accounts until you spend it, and invest the rest long term into funds?