Inheritence

stumac1980

Hi everyone,

I am not sure if this is in the correct place or not, but hopefully someone will be able to help me.
Unfortunately earlier this year I lost my father and am due to inherit 2 properties - 1 valued at 350K and the other at 200K plus 130K in cash.

I am looking at renting out 1 of the properties and possibly investing some of the money. This is the first time that I have had a substantial amount money and would like this to work for me in the long run and possibly make me money as well.

Currently I work full time but my wage is only 28K but with what I have inherited from my father I feel that I can have a comfortable life and hopefully make money in the future.

Could someone help or point me in the direction of what is best to do with investing or renting out the property and what my first steps would be?

eskbanker

The Flowchart - UKPersonalFinance Wiki is somewhere that might give you some starting ideas - to be honest you won't find many enthusiasts for property as investment on here, given the erosion of tax advantages and the hassle factor of being a landlord, but don't let that put you off if you feel it's doable.

You could also engage with one or two local independent financial advisers to gauge whether that might be an approach that would work for you - there's obviously a cost involved but if you're starting with a blank page they'd help you formulate what your financial objectives are and how best to meet them.

El_Torro

It's a good idea to see an IFA or two, though they will encourage you to sell your properties and invest the money in the stock market. IFAs make money by managing your money in stock market funds, money in property doesn't make them any money.

I would say that most people on MSE are not fans of BTL. There are people with BTL properties here, myself included, though most tend to discourage people getting into it. 

The biggest suggestion I can give regarding BTL is to get yourself a good letting agent. They take a cut of the rent which reduces your profits, however a good letting agent will make sure you keep up with your legal obligations. They also have contacts of plumbers, etc... so can get issues fixed in the property in a timely manner.

What are you going to do with the second property? Live in it? Sell it? If you have £100k or so which you plan to invest this is on the low end of what an IFA would be interested in. 

Stubod

Do not go BTL...look to sell the properties and invest the money instead, get yourself a good IFA....IMHO....

tacpot12

Have a read of this thread to get an idea of the challenges of being a landlord: https://forums.moneysavingexpert.com/discussion/6563401/1st-time-letting-house-help-needed-plz

I'm a landlord with one property and it works for me, but I'm now quite experienced. It's a steep learning curve. 

It's much easier too sell the property and invest in a diversified portfolio of investment funds such that you are pooling your risk with many other people. Then all you have to do is keep good tax records and pay the tax until you can shelter it all in an ISA. After that, it's dead easy. 

Albermarle

We get regular similar questions on the forum i.e. 'I have inherited £X and do not what to do with it'

The main point is that there is no one size fits all strategy. 

It depends on your 
Age
Personality
Future dreams/objectives?
Married/Family/Children?
Own home/mortgage?
Enjoy your job?
Attitude to risk 
Regarding the rental properties, are you any good at DIY/house maintenance ?
Etc.

Currently savings interest rates are above inflation, so the £130K can stay as cash for a while, until you are in a better position to make decisions.
This forum is a useful resource for learning about personal finance, and reading through it regularly would be of benefit for you.

poolboy

Landlord here, I wouldn't start now, too many challenges.  I started 20 years ago buying for cash, that and I do everything myself.  The returns are still good but I wouldn't buy another, even though I could.  You can get 5% on cash and no hassle. 

Good luck and sorry for your loss.