What investment

[oldbanger]

I’m looking to invest a sum for the medium term. It’s likely we’ll need some cash in around 5 years to help our youngest purchase a home. Other than that it’s retirement/rainy day money. I am not allowed to spend it all on cars.

The options on the table are
BTL property with a 65% mortgage
BTL cash purchase, option to mortgage it later
(The BTL under consideration needs around £15k work)
Premium bonds
Investment ISA or similar product
Pension products/overpayments

We’ve already had financial advice but didn’t come out with any clear winners.

I do favour property but the OH is quite rightly quite cautious about the stability of the housing market and would prefer a financial investment or investments instead

I’d be grateful for any advice

[tescorank]

Hang on to your hat, and wait for things to hit rock bottom whilst your money goes down in value.

[MrVert]

How long have you got to go until retirement?

[bitchstewie]

5 years is a coin toss with most investments.

[Simpo Two]

tescorank said:

Hang on to your hat, and wait for things to hit rock bottom whilst your money goes down in value.

Except we don't know when that will be.

If you're looking for stability then investment (in the market) may not be appropriate. From your list I might go for the BTL with cash. You'll get a (reasonably) guaranteed return by way of rent, but you will have to work a bit for it.

[dingg]

Pension fund overpayment to the max imo, not many investments where you gain 20% minimum as soon as you make the investment..

[Carbon Sasquatch]

dingg said:

Pension fund overpayment to the max imo, not many investments where you gain 20% minimum as soon as you make the investment..

Well.... don't forget that it's taxable on the way out - so depending on your withdrawal strategy, you may pay no tax or you may pay quite a bit.

Also the age of OP, their income level & current pension vs LTA all factor into it.

[wong]

I'd be wary of BTL now. Tenants faced with rising costs of food, gas, electricity, transport/petrol and rent. Guess what's going to be last on that list to be paid?

[xeny]

oldbanger said:

I do favour property but the OH is quite rightly quite cautious about the stability of the housing market and would prefer a financial investment or investments instead

5 years at the start of an interest rate tightening cycle is I think likely to lead to them all being scary. Personally I'd go with what the OH prefers to reduce strife when it goes down. Look hard at the lowest fee way of doing it.


My guess is housing will also see a correction, but that tends to be less obvious, so easier to kid yourself when you're in the red.

[oldbanger]

Thanks for all the feedback. I managed to get the OH to run with the property idea, though unfortunately not fast enough to snap up the cheap house I was eyeing up

We’ve calculated that a fixer upper is going to get us the best ROI. We’ve had two fixer uppers (as primary residence) so not totally inexperienced.

However we seem to be in a strange bubble with regards to auction property. We’re focusing on un mortgageable derelict homes. For those auctions we’ve watched or tried to bid on, homes with moderate structural issues (eg water damage to brickwork, leaky roof), no central heating and full of filth (eg hoarders homes, ones which have had squatters/vandals) are selling for the market value of comparable homes in the same street with full mod cons, central heating, bathroom, kitchen, heating, double glazing, carpets etc. I can only assume they’re not being bought by investors?

[LooneyTunes]

oldbanger said:

However we seem to be in a strange bubble with regards to auction property. We’re focusing on un mortgageable derelict homes. For those auctions we’ve watched or tried to bid on, homes with moderate structural issues (eg water damage to brickwork, leaky roof), no central heating and full of filth (eg hoarders homes, ones which have had squatters/vandals) are selling for the market value of comparable homes in the same street with full mod cons, central heating, bathroom, kitchen, heating, double glazing, carpets etc. I can only assume they’re not being bought by investors?

Seen a bit of that round me too. Agents get all excited about how they’re perfect for investors, but really they’re not and seem to be getting bought by people wanting to make their own mark on them and/or thinking they’re getting a bargain when really they have a bit of auction fever setting in.

Unless you can get one that’s not been widely marketed, best value at present seems to (still) be the ones that are just “tired” or have horrible decor. People often can’t see past a bit of paint/ratty carpets/other people’s furniture.

FWIW, I’m completing the purchase of the last one I have already going through but haven’t viewed any for a couple of months as I do think there could well be a shift from it being perceived as a sellers market and scope for better deals.

There is still strong demand from tenants if rents asked are reasonable.

[Carbon Sasquatch]

oldbanger said:

...... I can only assume they’re not being bought by investors?

Too many people watching the TV shows and not doing enough of their own research.