Change of Direction; (Cash) Buy-to-Let.
Discussion
Myself and the other half live and work overseas, rarely returning to or native UK. We have no assets other than cash savings, which aren't 'working for us' and haven't for some years. We planned to move back to UK this year and use our savings to purchase a (very) modest house to live in outright. We would be happy with this approach rather than taking out a mortgage for a larger house.
We have now decided, for various reasons, that we will stay away. Being mid-30s with no tangible assets makes us slightly uncomfortable. The savings sitting dormant is also a consideration. We know we should do something in this regard. We are therefore seriously considering continuing with the same approximate house purchase to rent out in the interim, ultimately moving in ourselves a few years down the line.
What is the general consensus on this from people smarter than myself!? Buy and let out the property for a few years, so we know we have some bricks and mortar and so that our savings 'work for us', or just sit on the savings we have until we one day move back? The concern with the latter is that we miss the housing market so to speak, aged 40 and can't get on the ladder.
We are not looking to build a property empire or make a small fortune. We'd just like to secure our savings and make some additional income to put away for later life. We have no other significant future financial planning in place.
We have now decided, for various reasons, that we will stay away. Being mid-30s with no tangible assets makes us slightly uncomfortable. The savings sitting dormant is also a consideration. We know we should do something in this regard. We are therefore seriously considering continuing with the same approximate house purchase to rent out in the interim, ultimately moving in ourselves a few years down the line.
What is the general consensus on this from people smarter than myself!? Buy and let out the property for a few years, so we know we have some bricks and mortar and so that our savings 'work for us', or just sit on the savings we have until we one day move back? The concern with the latter is that we miss the housing market so to speak, aged 40 and can't get on the ladder.
We are not looking to build a property empire or make a small fortune. We'd just like to secure our savings and make some additional income to put away for later life. We have no other significant future financial planning in place.
I think you should seriously consider some paid advice on what would be the best options & that might not be so easy given your expat status. Currently your savings are in a single asset class (cash it seems) & you are considering putting them into another (a single UK property). There aren't many who would think that is the best way to proceed & while you may come out ahead it would be dependent on everything going right with the house & renting it out, which is not certain. A good rental house might not be where you want to live, you might change your mind on where you want to end up, your'e going to have to pay management fees & there are issues like repairs costs & voids, all of which affect the actual return on capital invested. The non-resident tax situation would need checking as well.
I suspect a (the right) property could be a good idea, but maybe one funded by the the rental income (if that's possible) with the rest of your funds invested rather that just sitting a bank. There are a number of threads in this forum which might help:
https://www.pistonheads.com/gassing/topic.asp?h=0&...
(Sarnie is very knowledgeable about mortgages)
Discussion about IFAs
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Some discussion about investments for non-domiciled investors:
https://www.pistonheads.com/gassing/topic.asp?h=0&...
I suspect a (the right) property could be a good idea, but maybe one funded by the the rental income (if that's possible) with the rest of your funds invested rather that just sitting a bank. There are a number of threads in this forum which might help:
https://www.pistonheads.com/gassing/topic.asp?h=0&...
(Sarnie is very knowledgeable about mortgages)
Discussion about IFAs
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Some discussion about investments for non-domiciled investors:
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Have you considered buying a property and then going down a rent to rent or rent to SA/HMO route.
It will tie the property up for at least two years but from your initial post that doesn't sound like an issue.
For those not familiar with the model, R2R is where you rent the property to a company or individual for a set time and for a set monthly rent. They then rent out for a slightly higher monthly rent but more importantly deal with all admin, maintenance (including initial refurb) and daily aggro just leaving you with a guaranteed monthly income and a well maintained property that's gaining in value.
The downside is that the rent you receive is at the lower end of market rent.
R2SA is the same but the company/individual use the property for serviced accommodation/HMO. Has the same upsides but typically you will receive the market rate rent (if let as a single let).
Both options are completely legal and covered by contracts protecting both you and the other party.
If there are any andlords out there who have had enough then this is a great option for them to keep the property (and capital appreciation) but wash their hands of the usual issues of maintenance and tenants defaulting, etc.
It will tie the property up for at least two years but from your initial post that doesn't sound like an issue.
For those not familiar with the model, R2R is where you rent the property to a company or individual for a set time and for a set monthly rent. They then rent out for a slightly higher monthly rent but more importantly deal with all admin, maintenance (including initial refurb) and daily aggro just leaving you with a guaranteed monthly income and a well maintained property that's gaining in value.
The downside is that the rent you receive is at the lower end of market rent.
R2SA is the same but the company/individual use the property for serviced accommodation/HMO. Has the same upsides but typically you will receive the market rate rent (if let as a single let).
Both options are completely legal and covered by contracts protecting both you and the other party.
If there are any andlords out there who have had enough then this is a great option for them to keep the property (and capital appreciation) but wash their hands of the usual issues of maintenance and tenants defaulting, etc.
Edited by Nick928 on Sunday 17th February 11:08
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