First home time, Got some extra money, what to do with it

[Welshbeef]

sidicks said:

sealtt said:

Watches are pretty liquid to be fair. Houses are most certainly not, even if you find a buyer tomorrow it will take some time to get the cash (not to mention quite a bit of cost too).

That being said an ISA is still surely a far better investment..

Yes, I bet the market for £20k watches is massive and the bid-offer spread is negligible...

Well the market is global 7 billion people. Then of those who have the ability to buy £20k watches and then of those who would want to?

I'd bet is countless multiples to those interested in buying your house.

[AdeTuono]

sealtt said:

Put it into an ISA and use the tax free returns to pay a portion of your mortgage.

If you use it to increase equity in your house, if you ever need the cash it is quite difficult to get it back out the house, so is just keep the minimum equity you can in there. Liquidity is very important.

Tax-free returns of +/-£350/annum?

Edited by AdeTuono on Sunday 5th March 16:12

[MitchT]

In the OP's position I'd go for a better house that was cheap on account of needing work and spend the extra 20k on the work. That way you end up with something that's exactly what you want and way better than you could have otherwise afforded. That's just me though.

[Welshbeef]

MitchT said:

In the OP's position I'd go for a better house that was cheap on account of needing work and spend the extra 20k on the work. That way you end up with something that's exactly what you want and way better than you could have otherwise afforded. That's just me though.

It sounds like he literally only has £20k more - so getting a better house really isn't an option

[sealtt]

sidicks said:

Yes, I bet the market for £20k watches is massive and the bid-offer spread is negligible...

If you had 10 x 20k watches to sell this week, I expect by the end of Wednesday you could probably have around £180k cash in your pocket pretty easily, you could probably get near that by close of business tomorrow to be honest.

A £200k house though? The liquidity is so expensive, you would take a huge hit to get it sold this week unless you were very very lucky. Not to mention it would still take a while to actually get the cash.

Unless you are betting on massive capital appreciation most houses are horrible investments. Low yielding, high costs of holding and highly illiquid. Not to mention that most people way undervalue the risk and so are leveraged to a point where they could pretty easily wipe out their entire net worth and hardly give it a second thought!

[MitchT]

Welshbeef said:

It sounds like he literally only has £20k more - so getting a better house really isn't an option

What I mean is getting a house that is potentially better, but needs money spending on it to bring it up to scratch. The £20k is that money. If it needs money spending it'll be cheaper, so within budget.

[Welshbeef]

MitchT said:

Welshbeef said:

It sounds like he literally only has £20k more - so getting a better house really isn't an option

What I mean is getting a house that is potentially better, but needs money spending on it to bring it up to scratch. The £20k is that money. If it needs money spending it'll be cheaper, so within budget.

Not anywhere in the South East that I have lived in it will not.

A better house would be say a 3 bed semi over a terrace or a 4 bed detached over a 3 bed semi etc. To think you'll get one "needing a bit of TLC for the same / all done for £20k more is fantasy

[chow pan toon]

Where does the OP say anything about living in the south east?

[Welshbeef]

chow pan toon said:

Where does the OP say anything about living in the south east?

Heck even in North Wales which is cheap housing IMHO £20k doesn't leap you up the ladder.

[chow pan toon]

Welshbeef said:

chow pan toon said:

Where does the OP say anything about living in the south east?

Heck even in North Wales which is cheap housing IMHO £20k doesn't leap you up the ladder.

it isn't going to leap you up the ladder anywhere but may well get you into a nicer area (for example). Still, its all irrelevant as the OP states that there's nothing that jumps out for the extra 20k anyway

[Welshbeef]

OP

How about a loft conversion? Adding value to the property.
Or actually simply reducing down the amount of mortgage debt you have

[drainbrain]

http://www.rightmove.co.uk/property-for-sale/prope...

Area - and that street particularly - is currently being majorly renovated by heavily subsidised LA scheme.

Auctioneers are underrating rental potential too...

[Condi]

drainbrain said:

http://www.rightmove.co.uk/property-for-sale/prope...

Area - and that street particularly - is currently being majorly renovated by heavily subsidised LA scheme.

Auctioneers are underrating rental potential too...

Amazing.... I didnt know there was anywhere you could get a flat for 17k! And with yield of 20% it makes no sense not to.

[drainbrain]

I'm very friendly with the auctioneers. Want me to phone and see what it can be had for prior?

(don't forget their bung £1.5k and legals £750 approx. And from the pix there's a bit of work needed too, tho' not much. Up and running at £21/22k I'd say.)

[Welshbeef]

Condi said:

drainbrain said:

http://www.rightmove.co.uk/property-for-sale/prope...

Area - and that street particularly - is currently being majorly renovated by heavily subsidised LA scheme.

Auctioneers are underrating rental potential too...

Amazing.... I didnt know there was anywhere you could get a flat for 17k! And with yield of 20% it makes no sense not to.

Me thinks OP and drainbrain will have some competition from PH for these 20% return investments.

Downside it is in Glasgow...

[drainbrain]

Welshbeef said:

Downside it is in Glasgow...

Well. 40 years ago you might have had a point.

Now (from a btl perspective) it's just a place where property prices can be relatively low and rent is high.

But hey, what use is that ?



(oh, you can get less lucrative deals too if you prefer...)

[sealtt]

drainbrain said:

I'm very friendly with the auctioneers. Want me to phone and see what it can be had for prior?

(don't forget their bung £1.5k and legals £750 approx. And from the pix there's a bit of work needed too, tho' not much. Up and running at £21/22k I'd say.)

I'd buy it if it all checks out.

[IanCormac]

Move in to the house first. You could easily find that £20k disappears in renovations. Houses swallow money, when you've been renting and not paying out for anything you don't realise how easy it is to spend money. New drive, new bathroom, decorating, new boiler for example, there's £20k gone.

[Welshbeef]

drainbrain said:

Welshbeef said:

Downside it is in Glasgow...

Well. 40 years ago you might have had a point.

Now (from a btl perspective) it's just a place where property prices can be relatively low and rent is high.

But hey, what use is that ?



(oh, you can get less lucrative deals too if you prefer...)

They are at this price level for a reason.
I wonder what sort of capital growth if any is possible/can you then actually find a buyer?

[drainbrain]

Welshbeef said:

They are at this price level for a reason.

I wonder what sort of capital growth if any is possible/can you then actually find a buyer?

LOL!

Take it you're not a btl guy? (what's "capital growth" got to do with btl anyway?)


here:

http://www.rightmove.co.uk/property-for-sale/prope...

Just imagine what they got sold for to the guy who's flipping them thru the auction.....