Increase portfolio or reduce debt

Cocker5

I'm a recently separated 40 something and I am trying to simplify and streamline my life after burning out through spinning too many plates and so I am wondering if I am better to develop a property portfolio (I have a large house and a holiday let at the moment that each generate a modest income) or to work on clearing the mortgage and associated debt sooner to increase disposable income. I am considering using what equity I have in the house, to purchase another BTL property for an AST to diversify BUT I am wondering if this is mid life panic or common sense. I'm on a career break at this time and it has given me pause for thought, would I prefer the stock that I can offload at retirement OR would I prefer to focus my efforts on reducing the mortgage and freeing up the cash. I'm mindful that property means responsibility in terms of maintenance, upkeep, legal and regulatory requirements etc. which is the exact opposite of simple but I am worried that I am limiting my future self's options by sticking with the property and hoping that my ISA and pension pot is satisfactory. What are your thoughts?

masonic

I would tend to agree with you. Running a property business is going to be more complicated and time consuming than boosting your ISA/pension investments. It certainly isn't conducive to the stated aim of simplifying and streamlining your life after burning out through spinning too many plates.

MEM62

In most cases and for most people, a BTL is not going to beat a pension for retirement provision.  It just isn't tax-efficient.  (And certainly is not passive)  I would focus on getting rid of any consumer debt and building your pension.  

Alexland

I think it's healthy at your age to have some low cost / long term debt to act as leverage in your portfolio of assets provided it's affordable and there's very little chance you would get into difficulties in servicing it and eventually repaying it. It gives a boost to returns backed by your personal capital.

But then, only slightly older and having recently completed a divorce myself, I know that after separation from a long term partner it's important to have a feeling of financial security so be careful not to overextend yourself with risks.

Try and get the balance right across your property, ISA and pensions investments.

I don't really see how buying more property will 'simplify and streamline' your life.

Take control of your ISAs and Pensions so you don't need to hope they are satisfactory.

Bostonerimus1

I would be diversifying your investments and potential income sources. So I would not buy more property and presumably take on more mortgage debt. You should be contributing to a pension, and ISA and also you might consider paying down your mortgages depending on the interest rate. To have investments in mortgage free property that provide income and hopefully capital appreciation as well as pensions, ISAs and GIAs will give you flexibility and security.