Investment advice

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    Investment advice

    After some advice, I'll try and keep it short and to the point. I inherited a property at a young age, which I lived in for a few years but the past 8 years I have rented it out. I have no intention of returning to the area and it is becoming a bit of an ache managing it as I live about 400 miles away. The yield is not amazing either. I've lived in hmos ever since where it has covered the cost of that, although I have recently moved to a cheap area and got a place to myself.

    Recently there have been lots of issues with things going wrong, and I would like to get rid of it. It would be a lot easier if it was closer and I would have saved a lot of money by being able to sort things out myself.

    So I am wondering what would be my best bet to do with the cash. I'll point out that the yield I could get closer to home is a lot better.

    Option 1. Use the money for a property to get outright closer to home to rent out.

    Option 2. Put 50% to a buy to let, and the other 50% into another buy to let, closer to home.

    Option 3. 50% into a property for myself. The other 50 into a buy to let.

    Option 4. 95% into a property for myself, 5% saved to build an airbnb in the garden.


    The percentages in option 4 may differ, however it is my favourite option.

    #2
    If you don't own your own home, it's usually hard to see past investing in your own home as an investment.
    You get to live in it, you don't pay someone else rent, any increase in value is tax free and it's something much simpler to understand than most other investments.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      Be aware of capital gains tax. (I take it there is some capital gain.) A lot of us still have properties miles away because we would lose loads of the value if we sold.
      To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.

      Comment


        #4
        Originally posted by jpkeates View Post
        If you don't own your own home, it's usually hard to see past investing in your own home as an investment.
        You get to live in it, you don't pay someone else rent, any increase in value is tax free and it's something much simpler to understand than most other investments.
        I understand what you're saying. I've never felt settled anywhere before but now I think I am in the right place, as I've finally landed the job I want. So I would consider getting something for myself. That's why I was thinking of my own place plus the airbnb as part of the house of in the garden as a bit of extra income.

        Comment


          #5
          Originally posted by JK0 View Post
          Be aware of capital gains tax. (I take it there is some capital gain.) A lot of us still have properties miles away because we would lose loads of the value if we sold.
          I've looked into that and the property has not gone up much in the area compared to others, and I am not in the higher tax threshold so it's not too bad. I've probably spent more in expenses over the past few years than the amount I'd have to pay.

          Comment


            #6
            Sometimes it is best to be out of the market. Now is such a time I think.

            Comment


              #7
              My suggested order of priority, with a long time horizon, would be -

              A. Own home with a sizeable chunk mortgaged (since borrowing is cheap)
              If you can derive some income from it e.g. AirBnB that's probably a good idea

              B. Tax-efficient options: ISA, SIPP

              C. Stock market outside ISA

              D. Commercial BTL

              E. Residential BTL

              F. Savings account

              With the caveat that many assets look high priced at the moment so it may not be easy to find good value.

              I have left out P2P lending on the basis that the risk is difficult to assess / manage.
              There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

              Comment


                #8
                I think the most important thing to do is to secure your own home. The the rest can either go to a BTL near you or into a stocks & shares ISA. Personally I think the golden era of BTL is coming to an end and Air bnb is going to tighten up so making money in the stock market is a safer bet.

                Good luck

                Comment


                  #9
                  The decision to sell your 400 mile away property is correct.

                  Best choice is option 4 for "own residence use"..

                  Comment


                    #10
                    Thankyou all for the replies & advice. It seems I was lucky and issue free with renting for the majority of the time, now would be a good time to get rid & look for something myself.

                    Comment


                      #11
                      Buy a home for your own occupation. The best advice I can give you is to buy the worst home in the best road, not the other way round!

                      Comment


                        #12
                        Originally posted by doobrey View Post
                        My suggested order of priority, with a long time horizon, would be -

                        A. Own home with a sizeable chunk mortgaged (since borrowing is cheap)
                        If you can derive some income from it e.g. AirBnB that's probably a good idea

                        B. Tax-efficient options: ISA, SIPP

                        C. Stock market outside ISA

                        D. Commercial BTL

                        E. Residential BTL

                        F. Savings account

                        With the caveat that many assets look high priced at the moment so it may not be easy to find good value.

                        I have left out P2P lending on the basis that the risk is difficult to assess / manage.
                        I know nothing about ISA’s but lots of people seem to advise having one. I see that there are stocks and shares ISA’s and cash ISA’s, is it best to put some money in both types of ISA or put it all in to one type? What’s the best way to go about getting one, go through somebody like Hargreaves Lansdown or just go in to a high street bank to sort it out?

                        Comment


                          #13
                          An ISA is a bit of no-brainer in my view. It is free from tax on capital gains, interest, and dividends. You can invest up to £20k per financial year. (It doesn't roll over into the next year.)

                          Personally I use one of the platforms. Not sure of all the options. Shop around. There are comparison tables available online.

                          As to what type, depends on your risk appetite. Historically, stock markets have tended to outperform cash (e.g. average total returns from the major indexes in the US and UK are generally quoted as being something of the order of 7-10% annualised since inception).
                          There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

                          Comment


                            #14
                            Originally posted by BTL investor View Post

                            I know nothing about ISA’s but lots of people seem to advise having one. I see that there are stocks and shares ISA’s and cash ISA’s, is it best to put some money in both types of ISA or put it all in to one type? What’s the best way to go about getting one, go through somebody like Hargreaves Lansdown or just go in to a high street bank to sort it out?
                            There is no point having a cash ISA - the rates are so low you might as well put your money under your bed. Stocks & shares is the way forward. DO NOT go into a bank for this!!!

                            Open an ISA with HL or some other platform, do some research (lots of info on HL) & learn the business. Start small - a regular saver each month into a few funds and watch and learn.

                            My current favourites:

                            Fundsmith / HSBC FTSE 250 / L&G US tracker / Baillie Gifford Positive Change / Marlborough Special Situations

                            £50 or £100 each per month would be a good way to start.

                            Good luck

                            Comment


                              #15
                              Originally posted by AndrewDod View Post
                              Sometimes it is best to be out of the market. Now is such a time I think.
                              You have been saying this for a very long time as the market goes up and up............

                              Comment

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