What To Do With £250k?
Discussion
This isn't a "worst look at me I've got £250k" thread!
I'm just negotiating on the sale of my flat, which fingers crossed will be agreed today. It will mean I have about £260k to do something with until I buy my next property, which could be weeks or could be a couple of years! Is it best just to split it between savings accounts or is there a better place for it? My aim is to make myself a career in property, but I feel that the market is going to dip again so I don't really want to buy my next project yet unless the perfect place comes up!
The money is £140k borrowed from my dad (with interest paid at the rate he'd get from Investec High 5) and the remainder is mine. Don't want to pay Dads back as it gives me a good chunk to use on my next property project without having to go to the banks!
Cheers,
Dom
I'm just negotiating on the sale of my flat, which fingers crossed will be agreed today. It will mean I have about £260k to do something with until I buy my next property, which could be weeks or could be a couple of years! Is it best just to split it between savings accounts or is there a better place for it? My aim is to make myself a career in property, but I feel that the market is going to dip again so I don't really want to buy my next project yet unless the perfect place comes up!
The money is £140k borrowed from my dad (with interest paid at the rate he'd get from Investec High 5) and the remainder is mine. Don't want to pay Dads back as it gives me a good chunk to use on my next property project without having to go to the banks!
Cheers,
Dom
NoelWatson said:
So what will you do for the next decade?
I'm starting a business at the moment with my brother, so that will hopefully be my full time career. I will do more property, I just want to give it 6 months to see what the market does...having said that if the right thing comes up at the right price I'd take it! With regards to the McLaren, I will be buying myself a new car but nothing like that! Possibly a used V8 Vantage!
Cheers,
Dom
Zeemax_Mini said:
NoelWatson said:
So what will you do for the next decade?
I'm starting a business at the moment with my brother, so that will hopefully be my full time career. I will do more property, I just want to give it 6 months to see what the market does...having said that if the right thing comes up at the right price I'd take it! With regards to the McLaren, I will be buying myself a new car but nothing like that! Possibly a used V8 Vantage!
Cheers,
Dom
Currently post office offer 2.9% on instant access.
Prob your best bet.
Longer term 1-2 year time frames open up lots more options.
You have be careful with the existing, low interest rates paid by savings accounts versus the higher rate of inflation. The buying power of the money in the savings account will evaporate by a surprising amount when you do the maths. But, as you are buying property, which may actually decrease in value if/when interest rates increase, this may not be such a concern. It is all a very delicate question of timing. Also trying to guess what interest rates and property prices are going to do next.
What follows is just a mad idea and I am not suggesting you do this. IG Index offers a product where you can take a stake in the rise and fall of the Halifax property index. Using this you can link yourself to house prices such that you gain when prices increase and lose when they decrease. So you would be able to peg your financial spending power to property prices. However this would be most useful if there were going to be large swings in the property market. Which I would guess is not likely. My own guess is that interest rates will have to rise and the general downward pressure on house prices will continue for a year or two. But I would still say that if you see a really nice place then buy it. A home is a home.
What follows is just a mad idea and I am not suggesting you do this. IG Index offers a product where you can take a stake in the rise and fall of the Halifax property index. Using this you can link yourself to house prices such that you gain when prices increase and lose when they decrease. So you would be able to peg your financial spending power to property prices. However this would be most useful if there were going to be large swings in the property market. Which I would guess is not likely. My own guess is that interest rates will have to rise and the general downward pressure on house prices will continue for a year or two. But I would still say that if you see a really nice place then buy it. A home is a home.
technogogo said:
What follows is just a mad idea and I am not suggesting you do this. IG Index offers a product where you can take a stake in the rise and fall of the Halifax property index. Using this you can link yourself to house prices such that you gain when prices increase and lose when they decrease. So you would be able to peg your financial spending power to property prices. However this would be most useful if there were going to be large swings in the property market. Which I would guess is not likely.
Aren't the markets a;ready pricing in falls?If you are likely to need it all any time in the next couple of years then you really cant go past instant access accounts. You can get a slight pick up in interest if you are prepared to lock your money away for a year or two but not much. If you dont think you necessarily need it all then I would split it into thirds and put roughly 80k on instant access, 80k in a 1 or two year bond but one that you can access with a penalty and then split the remaining 80k in half and put 40 into a DAX EFT (I think Germany is cheap) and 40k into a Platinum EFT. Platinum is both a precious metal and industrial metal play and is trading much lower than its historic correlation to gold. Whatever, good luck with your future endeavours.
technogogo said:
You have be careful with the existing, low interest rates paid by savings accounts versus the higher rate of inflation. The buying power of the money in the savings account will evaporate by a surprising amount when you do the maths. But, as you are buying property, which may actually decrease in value if/when interest rates increase, this may not be such a concern. It is all a very delicate question of timing. Also trying to guess what interest rates and property prices are going to do next.
What follows is just a mad idea and I am not suggesting you do this. IG Index offers a product where you can take a stake in the rise and fall of the Halifax property index. Using this you can link yourself to house prices such that you gain when prices increase and lose when they decrease. So you would be able to peg your financial spending power to property prices. However this would be most useful if there were going to be large swings in the property market. Which I would guess is not likely. My own guess is that interest rates will have to rise and the general downward pressure on house prices will continue for a year or two. But I would still say that if you see a really nice place then buy it. A home is a home.
Aint worth it , The margains are too big for to bet in the house price index and the pricing falls are factored in.What follows is just a mad idea and I am not suggesting you do this. IG Index offers a product where you can take a stake in the rise and fall of the Halifax property index. Using this you can link yourself to house prices such that you gain when prices increase and lose when they decrease. So you would be able to peg your financial spending power to property prices. However this would be most useful if there were going to be large swings in the property market. Which I would guess is not likely. My own guess is that interest rates will have to rise and the general downward pressure on house prices will continue for a year or two. But I would still say that if you see a really nice place then buy it. A home is a home.
Ok I've had a think...I'm going to end up with about £260k at the end of the day...going to look for another project property near me to try and turn around and make some more cash on (around £200k), and maybe put the remaining money into a cheap buy to let in Devon or something! Not as exciting as a new flat plus a V8 Vantage but probably more sensible!
Dom
Dom
Zeemax_Mini said:
Ok I've had a think...I'm going to end up with about £260k at the end of the day...going to look for another project property near me to try and turn around and make some more cash on (around £200k), and maybe put the remaining money into a cheap buy to let in Devon or something! Not as exciting as a new flat plus a V8 Vantage but probably more sensible!
Dom
You can make 200k profit on 260k?Dom
NoelWatson said:
Zeemax_Mini said:
Ok I've had a think...I'm going to end up with about £260k at the end of the day...going to look for another project property near me to try and turn around and make some more cash on (around £200k), and maybe put the remaining money into a cheap buy to let in Devon or something! Not as exciting as a new flat plus a V8 Vantage but probably more sensible!
Dom
You can make 200k profit on 260k?Dom
I could be wrong though
OP, how about saving for a little while longer and eventually buying your final home. Then you could look at savings accounts/ISA's with better rates.
That said, me and my missus are earning next to nothing in a branch account just in case the right house comes along.
NoelWatson said:
You can make 200k profit on 260k?
Sorry, as M400 said I meant using £200k of it to buy a project where I live. 1 bed flats can be had in Devon for £40-60k, where I should be able to get around an 8% return (gross). I'd quite like to buy a place down there that needs some work doing, do it up (add some value) then rent it out for the long term. I'm only 23 so it would be nice if I could use use the profits from each big project i do to buy a small flat down there with cash. I will have to look at buying myself a proper home in a couple of years, but at the moment i'm still young enough to be able to live with parents/girlfriends parents whilst i try and make the best start in life possbile! I know that sounds like I'm taking the piss etc, but they really don't mind (for the moment!) and it will help me make as much as I can before we have to settle down! Also, my girlfriend will have around £200k in cash next year, so when we buy somewhere together we can hopefully use that to buy ourselves a flat and then use my money to continue investing in flipping properties!
Dom
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