Best way to invest £190k to generate a monthly income
Discussion
selmahoose said:
BoRED S2upid said:
selmahoose said:
Recommended for the over-70s
No it’s really not and I’m sure the OP won’t be suggesting this as a low risk strategy for his fathers inheritance. Are YOU an over 70? I nearly am. And I cannot think of an easier and safer way to live than off the rental income from decent well managed commercial property.
I'd be very happy to hear your alternative ideas for an easier and safer way to allocate £190k.
My suggestion was very low risk and boring.
Sheepshanks said:
based on purchase price, which isn't the way yield is calculated, but seems a fair enough way of loooking at it to me
You have to look at yields versus market value... you could sell it and buy something else potentially yielding more.Comparing today's rental income to a purchase price from 20 years ago is a bit of a money illusion.
Wow I was expecting this to spark off so much debate! 
Many thanks to all those who have responded and the suggestions thus far. Taking a few points in turn:
1) I guess risk is a very subjective term. I would say the priority is to achieve about 6% return with the commensurate risk.
2) Out of interest, what sort of investments would be considered lower risk than this, and what sort of return could you expect?
3) Earning 1.5% and drawing down the funds is a complete no no for my dad - he's just not wired up that way and would hate the fact his funds are being eroded so visibly!
I did suggest he should travel the world until the funds run out but he's just not interested in that.
4) The commercial property idea does seem very interesting... I guess it's about finding the right opportunity amidst the risk of empty retail units and the supposed death of the high street. That opportunity in Hamilton does look good on initial inspection - my only immediate concern would be I don't know the area at all and how vibrant the high street will be going forward.
5) What is the best way to find the best commercial property opportunities? Do they all go through auctions?
6) If he does go the residential property route, is the general consensus to split the funds and buy a couple of properties rather than a single property for £180? I would be happy to manage any property that was bought if possible. Any pointers on areas to look at with decent yields?
7) Any other non-property recommendations that could generate 6% return?
Many thanks again for all the suggestions
Many thanks to all those who have responded and the suggestions thus far. Taking a few points in turn:
1) I guess risk is a very subjective term. I would say the priority is to achieve about 6% return with the commensurate risk.
2) Out of interest, what sort of investments would be considered lower risk than this, and what sort of return could you expect?
3) Earning 1.5% and drawing down the funds is a complete no no for my dad - he's just not wired up that way and would hate the fact his funds are being eroded so visibly!
I did suggest he should travel the world until the funds run out but he's just not interested in that. 4) The commercial property idea does seem very interesting... I guess it's about finding the right opportunity amidst the risk of empty retail units and the supposed death of the high street. That opportunity in Hamilton does look good on initial inspection - my only immediate concern would be I don't know the area at all and how vibrant the high street will be going forward.
5) What is the best way to find the best commercial property opportunities? Do they all go through auctions?
6) If he does go the residential property route, is the general consensus to split the funds and buy a couple of properties rather than a single property for £180? I would be happy to manage any property that was bought if possible. Any pointers on areas to look at with decent yields?
7) Any other non-property recommendations that could generate 6% return?
Many thanks again for all the suggestions
selmahoose said:
City_boy said:
The starting point is that 6% income is incompatible with ‘low risk’.
So what is the priority, 6% income (at a commensurate level of risk) or low risk (and to maximise income within that constraint)?
Sidicks is talking nonsense (as usual, oh well, never mind etc)So what is the priority, 6% income (at a commensurate level of risk) or low risk (and to maximise income within that constraint)?
BTL you say?
Think up North, commercial, well managed by good firm.
Often enough they're offered for sale using 10x annual rent as the guide price.
Not that long ago I sold a freehold site used as a carwash for a very similar sum to what you've got. There was a queue to rent it (at £2k a month) a queue to buy it (including a couple of PHers) and over the course of the years it was rented my sole involvement in it amounted to a handful of short phone conversations with the commercial surveyors who acted as its managing agents (and who I never even met viz-a-viz).
ETA: Here's one I posted on another thread the other day. As expected, it didn't sell (yesterday) at auction and if I was in the buying mood I'd have that in a heartbeat, offering 225 cash right now, 24 hours to accept, and expecting to have it a day later at 250.
http://www.futurepropertyauctions.co.uk/property_d...
There's yer dinner!!!
Edited by selmahoose on Wednesday 5th December 12:44
Derek Chevalier said:
Och Groak, ye daft wee laddie - I thought you had gone for good?
Ochone! Ochone! he cried, he cried.... ye can tak awa ma groats, ma parritch ma fitba team and ma hin legs, but ye can NIVVIR TAK MA FREEEEEEDDOOOMMMMMMMM!!!https://www.youtube.com/watch?v=KRsNVt7PVdE
Nope I'm temporarily out of retirement and back at wurrrkk! Rest day today (and tomorrow but tomorrow's busy)
So only sporadic visits to the murky pond of the internet cockroach I'm afraid.....
( doesn't change much, does it? )
Sheepshanks said:
Commerical property seems a step further away in terms of what ordinary people are comfortable with. Maybe that perception is wrong and it's less risky than domestic BTL?
I'm not good at sharing things - it would stress me out, someone else being in my property.
In my completely uninformed opinion, commercial property seems massively more risky. I'm not aware of any habitable residential property which sit empty in the medium to long term, but a quick walk around my local town centre and there are numerous commercial properties to lease, some have been empty for years.I'm not good at sharing things - it would stress me out, someone else being in my property.
CzechItOut said:
In my completely uninformed opinion, commercial property seems massively more risky. I'm not aware of any habitable residential property which sit empty in the medium to long term, but a quick walk around my local town centre and there are numerous commercial properties to lease, some have been empty for years.
https://www.theguardian.com/society/2014/feb/23/europe-11m-empty-properties-enough-house-homeless-continent-twicehttps://www.bbc.co.uk/news/uk-42536418
Edited by selmahoose on Wednesday 5th December 20:48
selmahoose said:
https://www.theguardian.com/society/2014/feb/23/eu...
https://www.bbc.co.uk/news/uk-42536418
Not really relevant if the owners aren’t trying to let them out though, is it? Versus redundant commercial property where there is no occupier demand of any kind. https://www.bbc.co.uk/news/uk-42536418
Edited by selmahoose on Wednesday 5th December 20:48
Here is a really simple example:
https://propertylink.estatesgazette.com/property-d...
Next, a well know profitable retailer - what is the chance of them moving out? Well, they did, in July 2014 and it has sat empty ever since.
https://propertylink.estatesgazette.com/property-d...
Next, a well know profitable retailer - what is the chance of them moving out? Well, they did, in July 2014 and it has sat empty ever since.
Just out of interest, is there anyone who thinks this represents a worrying picture of commercial property as a lettable commodity?
Glasgow+40 = the entirety of Central Scotland ie from tiny kiosks and offices to huge industrial units ie most of Scotland's commercial property.
https://www.rightmove.co.uk/commercial-property-to...
Is 1316 to let a seriously high number/percentage?
hmmm
Try looking for a lo-cost shop to rent in Glasgow. Say up to £600pcm. See many? I had to go to page 15 before I found ANY. And that was a dump in a war zone.
Maybe they're there but just don't advertise on RM. Yep. And do you know WHY?
Glasgow+40 = the entirety of Central Scotland ie from tiny kiosks and offices to huge industrial units ie most of Scotland's commercial property.
https://www.rightmove.co.uk/commercial-property-to...
Is 1316 to let a seriously high number/percentage?
hmmm
Try looking for a lo-cost shop to rent in Glasgow. Say up to £600pcm. See many? I had to go to page 15 before I found ANY. And that was a dump in a war zone.
Maybe they're there but just don't advertise on RM. Yep. And do you know WHY?
Edited by selmahoose on Wednesday 5th December 22:26
Right so the guy's 70 and been dropped £190k? Working on living until 85 (and that's a finger in the air for anyone and to be active) why not just play it safe draw down what's needed?
It amazes me that people in their 70s are intent on making and making more and more money and not taking the advantage of spending it before its too late. Unless they feel obligated to passing the estate on.
Having said that, we are on Pistonheads after all
It amazes me that people in their 70s are intent on making and making more and more money and not taking the advantage of spending it before its too late. Unless they feel obligated to passing the estate on.
Having said that, we are on Pistonheads after all
Armitage.Shanks said:
Right so the guy's 70 and been dropped £190k? Working on living until 85 (and that's a finger in the air for anyone and to be active) why not just play it safe draw down what's needed?
It amazes me that people in their 70s are intent on making and making more and more money and not taking the advantage of spending it before its too late. Unless they feel obligated to passing the estate on.
Having said that, we are on Pistonheads after all
Yes. Back to my initial suggestion. What's the obsession with not spending the capital? He wants an income of £12k a year but can't erode the capital because... greedy kids? Gold elephants in heaven? PH dreamworld where money grows on trees and we all live forever? Amusing.It amazes me that people in their 70s are intent on making and making more and more money and not taking the advantage of spending it before its too late. Unless they feel obligated to passing the estate on.
Having said that, we are on Pistonheads after all
number2 said:
Yes. Back to my initial suggestion. What's the obsession with not spending the capital? He wants an income of £12k a year but can't erode the capital because... greedy kids? Gold elephants in heaven? PH dreamworld where money grows on trees and we all live forever? Amusing.
Kind of where I am.I'm not at the age where I can drawdown but there there are plenty of investments that focus on preserving capital and growing over the long term.
Mix those in with some safe options like 2-3% fixed rate accounts/NS&I (just under 2%) and some racier options for a smaller allocation of the money and I'd be much more comfortable than having the lot invested in a lock-up in Aberdeen or whatever.
Emergencies happen or people just want to buy a car or a new kitchen and you just can't just sell a bathroom.
number2 said:
Yes. Back to my initial suggestion. What's the obsession with not spending the capital? He wants an income of £12k a year but can't erode the capital because... greedy kids? Gold elephants in heaven? PH dreamworld where money grows on trees and we all live forever? Amusing.
Personally that's what I'd do. Tan it. 
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