Sudden inheritance

indiana123xo · 21 May 2019 at 1:18PM

Hello, just looking for advice. I know there’s a few threads out there about inheritance but my partner and i’s situation seems a little different.

A family member of my partners has just passed away and although we aren’t sure exactly how much he is being left we are estimating it to be at least 60k.
We are in a situation where in our late twenties have just 6 weeks ago bought and moved into our first home. Our mortgage after deposit is £99,000 (we live in Scotland).
We are a small amount of savings (£6000) that we are planning on using to decorate and put in a new bathroom shortly but haven’t got anything outside of that.
We both work full time and I actually work in property’s my partner is thinking it may be worthwhile buying a small flat outright and renting out whereas I think it may be a better idea to put something into our mortgage and maybe then taking out a small secondary mortgage on a buy to let.
As much as I work in property this is the first time in our lives that either of us has had such money and we want to make sure we invest it wisely into our future. It’s happened very suddenly and a lot more than we ever thought he was being left.
Can anyone offer advice on what the best options may be?

eskbanker · 21 May 2019 at 1:40PM

What's the attraction of owning a second property?

Perhaps working in property inspires you to do that, but as an investment it's generally viewed on here as less appealing than before due to changes in tax regime, etc, as well as being potentially onerous (landlord responsibilities), unpredictable (occupancy) and illiquid. Even if this was a sensible proposition, doing this so soon after buying your first home wouldn't seem ideal timing.

One obvious solution is to pay off the majority of your mortgage, unless your deal precludes this, but even if this isn't viable then more mainstream investments, i.e. in equity-based products, would typically be seen as preferable to sinking lump sums into a second property, if you're thinking about the long term. If you don't have any savings (that aren't spoken for) then make sure you keep aside an emergency rainy day fund first, to cover 3-6 months worth of expenditure....

Socajam · 21 May 2019 at 1:44PM

Before doing anything like decorating or buying another property, for me personally, I would make sure that we have 12 months both in an emergency fund and a life happens fund saved in a joint bank account that is untouchable unless its either an emergency or life happens.
Then sit down and work the numbers again and decide on buying the rental property and renovation of your main property.
Also do you have any debts, take those into account as well.

xylophone · 21 May 2019 at 1:49PM

Do you actually want to be landlords?

Had you considered the work and hassle?

Would you not be better off making sure that you have an emergency fund, perhaps reducing your existing mortgage and improving your home?

Robin9 · 21 May 2019 at 1:49PM

Don't count your chickens before they are hatched.

The estate may well take 12 months to complete.

castle96 · 21 May 2019 at 3:49PM

solicitors... yawn, probate...yawn, IHT.....yawn... HMRC..... on and ON

Sudden inheritance

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