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I'm 61 self employed on about 25000 a year. Have 1 flat I rent out at 495 a month. Have about 60000 in the stock market which is doing quite well at the moment. Inherited around 130 thousand. Do I put in the stock market or buy another buy to let. Any feed back appreciated.
Hi Brian,It's a great position to be in.I guess the answer will largely depend on how you plan to fund your retirement? Do you have a pension or are you looking to create income for retirement?If you have had some success with shares, you could split the £130K to hedge against risk and put some money into shares and the rest as a deposit on another property and perhaps keep £10K back for a rainy day. If you have any credit card debt or other high interest rate loans, it would be worthwhile using that £130K to get rid of it.What is the situation with where you live? Do you have a mortgage on that property?If you had plans to retire by the coast or in the country, you could consider buying a suitable property, with the aim of moving in there when you are ready to retire, and renting it out as a holiday let until that time. Holiday lets are not subject to Section 24 taxation.When you move into your retirement property, you could rent out your current residence, and along with your other BTL flat, you could have some income.I am only putting some random suggestions into the mix as I have no idea what your retirement plans are, but I hope you find these of interest?
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**
Hi Vanessa many thanks for the reply. Completely free of debt 3 bed semi paid for and also investment flat. Happy to carry on working while I'm fit enough. Only a very small private pension of about 20 thousand which I stopped paying into years back.Do wish I'd carried on paying into it now with all the pension reforms. Once again many thanks plenty to think about
Also been looking at may be buying something to add value. May be an auction property. Although I know not that easy. The holiday let looks interesting. The wife's sister has moved down to watchet in Somerset went down last weekend lovely place. Think the property prices are more than west midlands though where I'm living. Loads to ponder on.
Do what you feel best for the 130k cash.
I am more concerned about structuring your inheritance with unencumbered properties and other savings if they are over £500k if you are unmarried. I am assuming you have children otherwise will not be affect by IHT.
Thank you for the reply yes I'm married with 2 sons. Something to bear in mind
I wouldn’t invest in properly for the next few years (unless it’s for a place to live in)
I would wait until the whole Brexit thing has played out and I think that will be 5 years or so. My personal opinion is that whatever house you want to buy now you could get the same house in 5 years for a whole load less.
Maybe invest in bonds or the US stock market. But certainly stay away from UK stocks (or at least companies that primarily operate in the Uk)
Thanks Daniel I see what you're saying trouble is at my age 61 times running a bit short lol. I have some money invested in f and c investment trust isa which invests world wide done quite well. In 5 years time I'll be 66 and will draw my basic state pension. Just want everything in place by then.Another option I have is to buy a property in my sons name who still lives with us and is unlikely to ever leave. Save on stamp duty etc. Could then pheraps go down the lodger route. Not sure if I can buy a property in his name with my funds though.So much to think about and this site is goldmine for information. Thanks you
I`m a property investor not a stock market investor so I am biased
Put it in property
I`ve been offered a studio flat as a private sale for 100K renting at 550 pcm
I`m toying with buying it cash myself . Why?
Because I would be happy with 550 pcm but I may get 675 pcm if I work a bit harder
In 20 years it will probably be worth circa 200K and renting for maybe 1000 pcm
In 10 years I may release equity from it and buy 2 more similar income producing assets
In 10 years a developer might buy me out at 10% above market price as the land it sits on is valuable
In 10 years I may add value to it to enhance its value . Spend 5K on it and make 10K
Property gives me a variety of opportunities to make money .
Shares sit still and I have little control over that share price
If you feel the stock market will beat property in 20 years then invest in more shares
I don`t believe that but I cannot prove that
I can always put you in touch with the seller if I don`t buy it myself
Property wins out in the end
Jonathan Clarke. http://www.buytoletmk.com
Thanks jonathon appreciate the reply. I think if I do put it in to property I wI'll buy freehold. The service charge on the flat I currently have does eat into the profit a little. I live in an area where I can pick up a 2 bed semi for about 120 thousand
Investing in a resi property in your son's name and then using the lodger strategy is effective thinking.
Guaranteed lodger income and no taxes.
Your son obviously lives at the property but visits you a lot!
He doesn't need a bedroom to be available.
The sofa is available for him.
HMRC can't dictate where the live-in LL sleeps at his home.