Where to invest £250k for 1 year.
Discussion
Hi Guys,
Following the death of my mother, i am left with the value in her estate after paying all people in the will and IHT etc with about £250k.
Our intention is to buy a flat for about £200K, so that we can get a BTL income of it, but also have it in a better location for catchment in our name to enable our son to start senior school in September 2018.
So we won't need to buy it for about a year, hence my question with where to best invest the money.
Of course the other question is should we just but the property now, and get the income of it, which is likely to be about £10K or £11k per annum from rent after paying all fees.
It goes without saying that we have maxed isa alowances for myself and Mrs P, but what else would you suggest as a good investment without too much risk.
We did also used to have max amounts in premium bonds,,but pulled those out some time back when the returns became so poor, so we could top them up again.
Finally when it does come time to purchase the property, and as money is so cheap, should we use all the cash, or buy another property, and say put £100k down on each, and the rest as a mortgage?
If i am best just to bite the bullet and buy the flat now, then happy to do,that too, but felt like I could make better use of the £250k for a year.
Thanks in advance team!
Following the death of my mother, i am left with the value in her estate after paying all people in the will and IHT etc with about £250k.
Our intention is to buy a flat for about £200K, so that we can get a BTL income of it, but also have it in a better location for catchment in our name to enable our son to start senior school in September 2018.
So we won't need to buy it for about a year, hence my question with where to best invest the money.
Of course the other question is should we just but the property now, and get the income of it, which is likely to be about £10K or £11k per annum from rent after paying all fees.
It goes without saying that we have maxed isa alowances for myself and Mrs P, but what else would you suggest as a good investment without too much risk.
We did also used to have max amounts in premium bonds,,but pulled those out some time back when the returns became so poor, so we could top them up again.
Finally when it does come time to purchase the property, and as money is so cheap, should we use all the cash, or buy another property, and say put £100k down on each, and the rest as a mortgage?
If i am best just to bite the bullet and buy the flat now, then happy to do,that too, but felt like I could make better use of the £250k for a year.
Thanks in advance team!
Edited by nigelpugh7 on Thursday 16th February 13:49
Sorry to hear that Nigel.
The BTL option is something I would defo consider. If you are going to finance several then defo speak to Sarnie. Tax rules and lending rules are moving all the time though so do your research.
Other option would be pension - not sure on your circs but you could top up in some situations using any unused allowance.
The BTL option is something I would defo consider. If you are going to finance several then defo speak to Sarnie. Tax rules and lending rules are moving all the time though so do your research.
Other option would be pension - not sure on your circs but you could top up in some situations using any unused allowance.
If you're definite about the buy to let for all the money then the only answer for 12 months until you buy it is cash in whatever account, or combination of, is going to give you the best rate of interest.
Not great returns, but no risk to capital over the very short term you are talking.
Longer term I'd argue that having some further diversification of assets which can convey a range of tax advantage, flexibility and better returns would be worth considering rather than lumping all into property. Especially one property.
Remember the new tax year brings an increase in ISA allowance so a further £40k of tax free investment and returns are available for you as a couple form April.
Not great returns, but no risk to capital over the very short term you are talking.
Longer term I'd argue that having some further diversification of assets which can convey a range of tax advantage, flexibility and better returns would be worth considering rather than lumping all into property. Especially one property.
Remember the new tax year brings an increase in ISA allowance so a further £40k of tax free investment and returns are available for you as a couple form April.
It's more about hedging our bets to be honest, and we won't be moving there.
It's the usual lottery with school placements, we live 100 yards away from the catchment zone boundary, in fact the School bus that takes the kids to the high school we hope tom will get into, stops at the end of our road for collection.
In fact my mums address, which of course is in my name until it's completed on the sale also counts, but as I said it would be nice to be sure of the place, even though we don't think we will,have too much of an issue as the primary school he is in now is also technically not in our catchment, despite being the most local to us in distance terms.
And thanks to all that have offered advice on where to pu the money, seems like I have. Lot of options and decisions to make.
Of course being pistonheads all I really want to do is blow it on a nice GT3 RS!
Mrs P would kill me then though!
It's the usual lottery with school placements, we live 100 yards away from the catchment zone boundary, in fact the School bus that takes the kids to the high school we hope tom will get into, stops at the end of our road for collection.
In fact my mums address, which of course is in my name until it's completed on the sale also counts, but as I said it would be nice to be sure of the place, even though we don't think we will,have too much of an issue as the primary school he is in now is also technically not in our catchment, despite being the most local to us in distance terms.
And thanks to all that have offered advice on where to pu the money, seems like I have. Lot of options and decisions to make.
Of course being pistonheads all I really want to do is blow it on a nice GT3 RS!
Mrs P would kill me then though!
nigelpugh7 said:
It's more about hedging our bets to be honest, and we won't be moving there.
Is the priority the school place, or the investment?Local authorities do investigate if they smell a rat and school places do get lost. If the school is oversubscribed then I would only expect this risk to be increased. Plenty of stories where a child A misses out as a result of such fraud and parents promptly inform the school and child B then loses his place, thus allowing child A to get his/her rightful place. I wouldn't hesitate in doing the same if I was disadvantaged in such a way.
It not oversubscribed then I wouldn't risk it. If it is, and getting into the right school is that important then I would suggest you move.
UpTheIron said:
It not oversubscribed then I wouldn't risk it. If it is, and getting into the right school is that important then I would suggest you move.
This. It's fraud. If you are caught, you could be prosecuted beyond losing a school place. £250k goes a long way to private 2ndary education if you didn't get a place and didn't like choice 2.Probably not worth the risk then, but I won't be spending the money to send either of my kids private education.
It still amazes me how many people live in the local village in rented accommodation for a very short time, and still get the chosen school place based on their rented accomdstion, but they move to another location after less than a year. Does that still count as fraud I wonder?
Still getting back on track I will look to spread the money around over different investments, and perhaps look at buying two buy to let properties with a small mortgage on each of them to make the best use of the actual cash.
Thanks again to those who offered advice on various investment alternatives.
It still amazes me how many people live in the local village in rented accommodation for a very short time, and still get the chosen school place based on their rented accomdstion, but they move to another location after less than a year. Does that still count as fraud I wonder?
Still getting back on track I will look to spread the money around over different investments, and perhaps look at buying two buy to let properties with a small mortgage on each of them to make the best use of the actual cash.
Thanks again to those who offered advice on various investment alternatives.
nigelpugh7 said:
It's more about hedging our bets to be honest, and we won't be moving there.
It's the usual lottery with school placements, we live 100 yards away from the catchment zone boundary, in fact the School bus that takes the kids to the high school we hope tom will get into, stops at the end of our road for collection.
In fact my mums address, which of course is in my name until it's completed on the sale also counts, but as I said it would be nice to be sure of the place, even though we don't think we will,have too much of an issue as the primary school he is in now is also technically not in our catchment, despite being the most local to us in distance terms.
And thanks to all that have offered advice on where to pu the money, seems like I have. Lot of options and decisions to make.
Of course being pistonheads all I really want to do is blow it on a nice GT3 RS!
Mrs P would kill me then though!
You say your mother's house is in the catchment area but is for sale? Is this the source of the 250k ?It's the usual lottery with school placements, we live 100 yards away from the catchment zone boundary, in fact the School bus that takes the kids to the high school we hope tom will get into, stops at the end of our road for collection.
In fact my mums address, which of course is in my name until it's completed on the sale also counts, but as I said it would be nice to be sure of the place, even though we don't think we will,have too much of an issue as the primary school he is in now is also technically not in our catchment, despite being the most local to us in distance terms.
And thanks to all that have offered advice on where to pu the money, seems like I have. Lot of options and decisions to make.
Of course being pistonheads all I really want to do is blow it on a nice GT3 RS!
Mrs P would kill me then though!
Jules360 said:
You say your mother's house is in the catchment area but is for sale? Is this the source of the 250k ?
Yes as I stated at the start that's the money from the sale of my late mothers property.It's an interesting one in point of fact, when I lived there and was going to senior school it was under there right catchment area.
But it now seems to have changed, and looking at other properties whilst researching what catchment ares are valid it has recently changed, so it's no longer suitable, hence the reason I changed my plans and sold the property.
Of course having said that I still would have to had to sell the property, beascuse as part of the will conditions each of Rhe 5 grandchildren are due £10000 each, and there is not enough cash in the estate to pay them, so hence the decision to sell the property.
I can't see why anyone would automatically go for BTL.
It will cost money to buy the house.
It will cost money to get it to a letable standard
It will cost money to advertise, insure and maintain
It will have dead periods
It will, sooner or later, be occupied by someone you wish lived somewhere else
That person may or may not pay what they owe you
You will fool yourself over "how much you've made", completely ignoring inflation and most of your costs
Personally if I had that amount of money I'd put it straight into my unit trust portfolio which has made over 6% every year in return for virtually no effort or expense on my part.
If you have to go for a rental property then consider holiday let. You'll buy a property somewhere where you might actually want to stay, or have people stay to visit you, and the potential for more profit if there. Maintenance will be higher and you'll need a cleaner every week.
Out of curiosity, why did you decide on being a landlord so quickly?
It will cost money to buy the house.
It will cost money to get it to a letable standard
It will cost money to advertise, insure and maintain
It will have dead periods
It will, sooner or later, be occupied by someone you wish lived somewhere else
That person may or may not pay what they owe you
You will fool yourself over "how much you've made", completely ignoring inflation and most of your costs
Personally if I had that amount of money I'd put it straight into my unit trust portfolio which has made over 6% every year in return for virtually no effort or expense on my part.
If you have to go for a rental property then consider holiday let. You'll buy a property somewhere where you might actually want to stay, or have people stay to visit you, and the potential for more profit if there. Maintenance will be higher and you'll need a cleaner every week.
Out of curiosity, why did you decide on being a landlord so quickly?
cymtriks said:
Personally if I had that amount of money I'd put it straight into my unit trust portfolio which has made over 6% every year in return for virtually no effort or expense on my part.
Please don't take offence at the question, but do you take that 6% every year as income before tax or after tax ?cymtriks said:
I can't see why anyone would automatically go for BTL.
It will cost money to buy the house.
It will cost money to get it to a letable standard
It will cost money to advertise, insure and maintain
It will have dead periods
It will, sooner or later, be occupied by someone you wish lived somewhere else
That person may or may not pay what they owe you
You will fool yourself over "how much you've made", completely ignoring inflation and most of your costs
Personally if I had that amount of money I'd put it straight into my unit trust portfolio which has made over 6% every year in return for virtually no effort or expense on my part.
If you have to go for a rental property then consider holiday let. You'll buy a property somewhere where you might actually want to stay, or have people stay to visit you, and the potential for more profit if there. Maintenance will be higher and you'll need a cleaner every week.
Out of curiosity, why did you decide on being a landlord so quickly?
That's a very good question, so thanks for asking me.It will cost money to buy the house.
It will cost money to get it to a letable standard
It will cost money to advertise, insure and maintain
It will have dead periods
It will, sooner or later, be occupied by someone you wish lived somewhere else
That person may or may not pay what they owe you
You will fool yourself over "how much you've made", completely ignoring inflation and most of your costs
Personally if I had that amount of money I'd put it straight into my unit trust portfolio which has made over 6% every year in return for virtually no effort or expense on my part.
If you have to go for a rental property then consider holiday let. You'll buy a property somewhere where you might actually want to stay, or have people stay to visit you, and the potential for more profit if there. Maintenance will be higher and you'll need a cleaner every week.
Out of curiosity, why did you decide on being a landlord so quickly?
The properties were looking at are local,new builds, and the area is under massive growth with a constant need for new properties by people looking to,rent.
I guess we had assumed that it would be a fairly safe investment with a reasonable growth rate and steady income too.
We had not even considered a holiday let, as my friend has a place in Barbados, and the remote management of that for holiday rentals seems like a total nightmare.
This was also the reason I asked for alternative investment decisions.
Thanks again for the input , will give it some consideration.
cymtriks said:
I can't see why anyone would automatically go for BTL.
It will cost money to buy the house.
It will cost money to get it to a letable standard
It will cost money to advertise, insure and maintain
It will have dead periods
It will, sooner or later, be occupied by someone you wish lived somewhere else
That person may or may not pay what they owe you
You will fool yourself over "how much you've made", completely ignoring inflation and most of your costs
Personally if I had that amount of money I'd put it straight into my unit trust portfolio which has made over 6% every year in return for virtually no effort or expense on my part.
If you have to go for a rental property then consider holiday let. You'll buy a property somewhere where you might actually want to stay, or have people stay to visit you, and the potential for more profit if there. Maintenance will be higher and you'll need a cleaner every week.
Out of curiosity, why did you decide on being a landlord so quickly?
My thoughts exactly as it can be problematic in addition to the tax breaks having been revised. It will cost money to buy the house.
It will cost money to get it to a letable standard
It will cost money to advertise, insure and maintain
It will have dead periods
It will, sooner or later, be occupied by someone you wish lived somewhere else
That person may or may not pay what they owe you
You will fool yourself over "how much you've made", completely ignoring inflation and most of your costs
Personally if I had that amount of money I'd put it straight into my unit trust portfolio which has made over 6% every year in return for virtually no effort or expense on my part.
If you have to go for a rental property then consider holiday let. You'll buy a property somewhere where you might actually want to stay, or have people stay to visit you, and the potential for more profit if there. Maintenance will be higher and you'll need a cleaner every week.
Out of curiosity, why did you decide on being a landlord so quickly?
Depends on your strategy, age and outlook. For example and excluding any investment gains you could take £10kpa from it for the next 25yrs to do as you please and enjoy it.
When you start to get 70+ having a shed load of money in various investment accounts/portfolios is somewhat superfluous and the likelihood is somebody else will end up benefitting after you've gone. The downside is we dont know when our 'end date' is!
Decide what you need to best support a comfortable life in (early) retirement would be my start point.
I've yet to find someone on here who has a plan to actually spend the money they've earned/saved etc.. GT3RS not a bad option if you want one. You might not lose that much and if you do so what?
sidicks said:
drainbrain said:
How about a nice commercial property with a blue chip tenant on a long FRI lease managed at 5%+vat. by an experienced commercial agency?
Yep, definitely no risk there over a 1-year period..
Tell you what, I very much doubt unless OPs got a Bigger Plan that if they parked it in the comm. you've quoted they'd be wanting to buy a resi btl with the parked funds any more. Let's face it the 'school catchment' idea isn't going to happen, is it?
Gassing Station | Finance | Top of Page | What's New | My Stuff