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Just after some thoughts on which direction to take!
We currently own two one-bed flats in Worcester which we rent out - we put down a 25% deposit and used a 25 year interest only buy to let mortgage.
We had wanted to buy a third property but have put all plans on hold for the past two years because of Brexit and concerns about the economy/property prices.
We are hoping that in the coming weeks the Brexit uncertainty should have at least in some ways be resolved and that we can begin to move forwards again.
We have about £50k sitting in bank accounts and want to do something with it, otherwise over time it will just depreciate in value. Our thoughts are at the moment, another one bed flat in Worcester (approx. £110K), a two bed terraced in somewhere like Bearwood in Birmingham (approx. £130k), some friends of our own a block of garages so we have thoughts of doing something similar (thoughts?), or even a holiday property somewhere that we could get some use out of as well.We have considered Airbnb but realise that you need a freehold property and ideally with no mortgage - we live in Cheltenham where even a two bed terrace in a mediocre area is £200k. Our own house has been valued at £335k and we have a mortgage on it of £100k, so £235k equity.Another thought has been to take money out of our own house and then buying a rental property outright - I would never normally consider using equity on our house for anything else, but in this instance it is just moving the equity between properties you own so you still 'own' the equity it is just simply in a different property.I suppose that one disadvantage would be that we wouldn't get the mortgage interest tax relief (as we would buy as a limited company that one of our flats are already in), and we wouldn't have this if we used our own residential mortgage.
Would be grateful for any insight as feel like we are just going around in circles at the moment. Or would you still hang fire given the Brexit situation? Having been directed to read Rich Dad, Poor Dad a few years ago we now just feel like the years are ticking by without us moving forward!! (we're 42).
Or any other thoughts on things to invest in? Already have some money distributed in some index funds in a stocks and shares ISA and drip feed some of the profits from our first flat (in our own names) into these, but for some reason this always feels a bit riskier to me than property!
Would be grateful for any advice or thoughts on our way forward, or if you feel that any of our thoughts sound like huge mistakes. Thank you!
You have put forward a lot of different options there for your £.
Make a list, with the option at the top being your most favoured option.
If you're not sure about an option, then that is lower down the list.
You can't do them all so you have to choose and only you know which is the best option for yourself long term.
Hi Adam, yes, lots of thoughts - like you say think we just need to make a decision and go for it.
> We are hoping that in the coming weeks the Brexit uncertainty should have at least in some ways be resolved and that we can begin to move forwards again
How or why has this stopped you from investing?
Worried that Brexit could cause the property prices to fall. Mark Carney had said prices could fall by 30% in the event of a no deal.
"Rich Dad Poor Dad" is a good book but the UK taxation has changed and it can effect the borrowing of money
Before you expand further I would take some tax advice
You don’t mention if you are a basic or higher rate tax payer?
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
I am not a fan of leasehold flats, so immediately, to balance your portfolio, I would recommend purchasing a house.If you are risk averse and uncertain, its hard to go wrong buying a terraced house in a good street with good transport links.If you went for that option, you've added another portfolio to your property.If you want to move forwards after that, you have the equity in your own home to leverage.For now, I would take action and go for a terraced house. If you can find one in need of minor refurbishment, such as decorating, new flooring etc. then all the better.
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
There are property's available in North and East Manchester for around £85/90K with yields above 8%. I would stay away from leasehold flats.
Manchester based investor. I buy, sell, renovate and rent investment property in East/North Manchester email: email@example.com Call: 0161 681 3724