How to best invest £45,000???

wanderlust_wannabe · 14 March 2005 at 2:25AM

Hi all, new member - first post!

I'm succumbing to my wanderlust desires jacking in my job and leaving the country in October. When I return I'm back to University.

I have a house (£85,000 first time buyer property) and from the investigations I've done so far the money I make from renting it out vs. morgage payments is minimal. So' I've been considering selling up and investing the money I will make on the house ~£45,000 for the period I'm away and the time I'm at uni, which will be ~4 years combined.

Does anyone have any advice on how best to use this money in order to make the best return possible on it?
Or is it best just to accept that I'm not going to make any money on the rent and hope the house prices keep rising which in turn raises the equity I have in the house?

Many thanks for any advice,

Paul.

deemy2004 · 14 March 2005 at 2:33AM

If your not working you would get approx 5.1% + in many of the online accounts. So on 45k thats £2,295 per year, risk free and instant access.

Additionally you could up the risk by investing say 25% in stocks and leaving them for 4 years etc..

lipidicman · 14 March 2005 at 11:08AM

Isnt it enough that the rent will pay the mortgage for you? You dont need to make any money on top and you clearly dont need that money as you are happy to tie it up for the next 4 years. I wouldnt want to get off the ladder IF I was on it.

Whatever you do, think about it carefully and take proper advice

wanderlust_wannabe · 14 March 2005 at 4:30PM

I see your point lipidicman. The only thing that keeps crossing my mind is 'is this the best time to get out of property'.
I have a nagging feeling that house prices have plateaued and may start dropping off. Hence I wondered if it seems a good idea to get out now, invest the cash whilst the fallow period runs its course and then use the money with any profit on it to buy property again???

deemy2004 · 14 March 2005 at 6:21PM

Yeh, lock in your profit while you can
House prices are ridiculousy priced.

I mean you can buy a mansion for £200k in the USA, here ?

ED · 14 March 2005 at 6:27PM

If deciding to go ahead and sell the house, and wanting to put some of the money into building society and bank accounts, here are two ideas :

1) Mini Cash ISA (£3,000 per tax year, possibly until 2009)

2) 5.50% gross interest for the 90-day withdrawal notice account (Post It) run by Nottingham Bdg Soc

Happy wandering!

lipidicman · 15 March 2005 at 2:37PM

wanderlust_wannabe wrote:

I see your point lipidicman. The only thing that keeps crossing my mind is 'is this the best time to get out of property'.
I have a nagging feeling that house prices have plateaued and may start dropping off. Hence I wondered if it seems a good idea to get out now, invest the cash whilst the fallow period runs its course and then use the money with any profit on it to buy property again???

Sure, if prices are falling in your area - but they are not in a lot of places. If it was a second property too, but a first property is somewhere to live as well as an investment. However I guess you wont be living in it whilst at uni (or could you? It would save a lot of rent - and you could fill it with student mates - far more rental income than letting it as a house! My girlfriend practically paid for her house this way!)

Im sure whatever you do you will be fine - have a nice time wandering!

How to best invest £45,000???

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