Its started...... Posted October 29, 2006 Share Posted October 29, 2006 Hi, I've got £175K ( Cash ) to play with .... Do I buy a small house and get an income of £500-600 for life (Seems attractive as constant income... or is there somewhere better to put it? Where can I get a better return? Cheers Paul Quote Link to comment Share on other sites More sharing options...
Luminist Posted October 29, 2006 Share Posted October 29, 2006 Just IMHO here. £600pm gives you a yield of about 4.1%. Leaving it in a high-interest savings account gives you a better yield and at no capital risk. Don't forget to factor in maintenance costs to your house as well as well as time. Also you need to take tax into consideration L Quote Link to comment Share on other sites More sharing options...
JJJ Posted October 29, 2006 Share Posted October 29, 2006 Aye. You'll get a much better return sticking it in a zero-hassle instant access savings account. If you fancy being a bit more adventurous, mining looks good for the long term, food looks good for the medium term. Quote Link to comment Share on other sites More sharing options...
brassfarthing Posted October 29, 2006 Share Posted October 29, 2006 Hi, I've got £175K ( Cash ) to play with .... Do I buy a small house and get an income of £500-600 for life (Seems attractive as constant income... or is there somewhere better to put it? Where can I get a better return? Cheers Paul If you come to the HPC forum for advice on how to invest 175K, you're totally mad. Why not spend it on psychiatric help? Quote Link to comment Share on other sites More sharing options...
Casual Observer Posted October 29, 2006 Share Posted October 29, 2006 Hi, I've got £175K ( Cash ) to play with .... Do I buy a small house and get an income of £500-600 for life (Seems attractive as constant income... or is there somewhere better to put it? Where can I get a better return? Cheers Paul Assuming you chose your poster name carefully, why do you need to ask? Quote Link to comment Share on other sites More sharing options...
zag2me Posted October 29, 2006 Share Posted October 29, 2006 (edited) Just IMHO here. £600pm gives you a yield of about 4.1%. Leaving it in a high-interest savings account gives you a better yield and at no capital risk. Don't forget to factor in maintenance costs to your house as well as well as time. Also you need to take tax into consideration L Your assuming that over the lifetime this person owns the property it will never go up in value. I would imagine in 25 years, the property would have quadroupled in "value" assuming there are a couple of crashes, and massive price increases over that period. Edited October 29, 2006 by zag2me Quote Link to comment Share on other sites More sharing options...
Guest Cletus VanDamme Posted October 29, 2006 Share Posted October 29, 2006 Also you need to take tax into consideration And also the tax advantages, e.g. any costs can be offset against taxable income, as can the mortgage interest payments. Quote Link to comment Share on other sites More sharing options...
laurejon Posted October 29, 2006 Share Posted October 29, 2006 Drop by Downing Street, hand it over to Gordon, in return for a peerage, then start a consultancy agency employing staff for minimum wage and sit back and enjoy contracts with the Government for Billions. Not widely know, but a small backhander to the labour party can considerably improve your financial health. Quote Link to comment Share on other sites More sharing options...
ParticleMan Posted October 29, 2006 Share Posted October 29, 2006 [ ... snip ... ] I've got £175K ( Cash ) to play with [ ... snip ... ] Here's a novel thought, buy a share of ownership in a producer of something you actually want to see a lot more of around you in a decade's time. Of course if your heart's desire is to see more disenfranchised renters with no sense of communal association whatsoever, as your dotage encroaches, then go right ahead and become a landlord; just don't have the gall to complain when you get what you've bought. Quote Link to comment Share on other sites More sharing options...
evictee Posted October 29, 2006 Share Posted October 29, 2006 And also the tax advantages, e.g. any costs can be offset against taxable income, as can the mortgage interest payments. Having a cost which you can pay before tax is not an advantage over not having a cost. Quote Link to comment Share on other sites More sharing options...
Guest Cletus VanDamme Posted October 29, 2006 Share Posted October 29, 2006 Having a cost which you can pay before tax is not an advantage over not having a cost. True but with many bears here predicting a big devaluation of sterling it's probably safer than putting the money in a building society account. Quote Link to comment Share on other sites More sharing options...
IamSpartacus Posted October 29, 2006 Share Posted October 29, 2006 True but with many bears here predicting a big devaluation of sterling it's probably safer than putting the money in a building society account. If you listen to everything the bears on here say, you might as well put the money in a big pile on the ground, burn it, then go jump off a bridge... Quote Link to comment Share on other sites More sharing options...
PropertyGuru Posted October 29, 2006 Share Posted October 29, 2006 You could invest it in a range of things. A few long term puts against the s.m and investment in debt cos would seem prudent at this time. Don't worry about the bulls with their 'burn it' cr@p. They are just starting to show their nerves as the slide gets closer. What you COULD do is wait until end q1 2007, when the crash should be visible to everyone. Then you start putting a few silly offers on places, and look for 70% mortgages (with credit tightening, getting more than that for btl will be difficult). Make enough offers, some will get taken up. Your 175k effectively becomes 585k. You also have a cushion against the falls that will probably happen over the next decade or so. Worst case? You wait another 5 months, earning interest on it. Best case, you end up with 3 houses for which you paid no more than 175k less about 50 of your own i.e. 125k that were previously 'valued' at about 250. You need about 8k a year in rent to make that viable. If you want to get tricksy, when the market eventually picks up, you can remortgage, removing all your own money, making them 3 free houses. But I ramble. Sorry! Quote Link to comment Share on other sites More sharing options...
needle Posted October 30, 2006 Share Posted October 30, 2006 Sounds like another hack asking for advice on his finance column...ho hum..... Quote Link to comment Share on other sites More sharing options...
enworb Posted October 30, 2006 Share Posted October 30, 2006 Hi, I've got £175K ( Cash ) to play with .... Do I buy a small house and get an income of £500-600 for life (Seems attractive as constant income... or is there somewhere better to put it? Where can I get a better return? Cheers Paul It depends wheter or not you have £175k AND a mortgage free home If you have a mortgage free home that you are happy with the size/location of, you will need to be very considerate to make as much capital/yeild from property as you would will a high interest account. More details please. Quote Link to comment Share on other sites More sharing options...
Charles_Darke Posted October 30, 2006 Share Posted October 30, 2006 Firstly, I'd ignore anyone here who starts spewing out advice without knowing anything about your background. How old are you? Do you need capital growth or steady income stream? Are you working, for how long, what's your salary? Married? Children? Already have a home? What's your attitude to risk? Do you need ready access to your funds? etc. etc. Quote Link to comment Share on other sites More sharing options...
enworb Posted October 30, 2006 Share Posted October 30, 2006 Firstly, I'd ignore anyone here who starts spewing out advice without knowing anything about your background. How old are you? Do you need capital growth or steady income stream? Are you working, for how long, what's your salary? Married? Children? Already have a home? What's your attitude to risk? Do you need ready access to your funds? etc. etc. And shoe size Seriously though, it does depend on so many things that it's difficult to give good advice. Quote Link to comment Share on other sites More sharing options...
Its started...... Posted October 30, 2006 Author Share Posted October 30, 2006 And shoe size Seriously though, it does depend on so many things that it's difficult to give good advice. Thanks to everyone for their input so far...........I do appreciate this isn't the most sensible or professional way to get advice ....however the refreshing thing is people are free to say what they like / think as opposed to IFA's who are bound by so many rules and fear of making mistakes they will never offer more risky advice. My situation 40 Unemployed (finding it tricky to get job at moment) but when I do should be in the 30K + mark Just me to worry about :-( No borrowings on house ( yep kind of happy where I am) Pension - no faith in it anymore..... Can't live on £600 / mth a rental property would bring but would mean could struggle by with odd jobs if have to. Don't want to eat into my £175K to live on so buying a house would put it out of reach but provide a revenue stream for life.... As I see it a rental property ( owned 100% ) gives following benefits £600 / mth for life (kind of inflation proof as rents should go up over time. Capital will go up and down in value as house prices crash and recover ( if they do - I called top of market 2 years ago and was wrong) but in any event likely to at least go up with inflation. I don't see another vehicle for getting an income - that doesn't mean you end up with your orignal capital getting reduced in value by inflation. I'm very adverse to borrowing money generally.................but have taken huge risks in past and may do again in the future AND YES I really thought "it had started" as when USA started heading down I thought UK would follow suit but for some bizarre reason there seems to be a rally in prices again....certainly locally. Last mad blip - probably..................... Sorry to sumarise I guess what I really want to know is where best to get an income for life from £175K ( inflation proof and capital protected in long term).... Thanks for your thoughts Quote Link to comment Share on other sites More sharing options...
Gel Posted October 30, 2006 Share Posted October 30, 2006 Nice to see someone facing the same problem as me. But with £120k So far I am looking at this: 30k in Gold 2 x 32k in High interest accounts Open up an Isa Travel around the world and have the rest as cash, probably in another savings account. Then buy back in when the market has collapsed, buy two properties, live in one, rent the other or even buy 3, 2 of which would have a small, 5 year (yes, five year) mortgage each, so that the rent covers the payment fully. Then sell them when the market goes up 5 years on. Oh, and if anyone has any thoughts on this I would appreciate hearing them. Quote Link to comment Share on other sites More sharing options...
Guest Cletus VanDamme Posted October 30, 2006 Share Posted October 30, 2006 Sorry to sumarise I guess what I really want to know is where best to get an income for life from £175K ( inflation proof and capital protected in long term).... Premium bonds? Quote Link to comment Share on other sites More sharing options...
Its started...... Posted October 30, 2006 Author Share Posted October 30, 2006 Premium bonds? Go them ...... But value goes down with inflation....................... Quote Link to comment Share on other sites More sharing options...
Guest Cletus VanDamme Posted October 30, 2006 Share Posted October 30, 2006 Go them ...... But value goes down with inflation....................... Don't they also roughly track the base rate, so with IRs at say 5.25% could be a reasonable no-risk return? Quote Link to comment Share on other sites More sharing options...
Guest prudence Posted October 30, 2006 Share Posted October 30, 2006 there is no point in investing in something that provides an income stream (particularly, if it is little better than what is offered by a deposit account) if you think the investment is going to decline in value........... Quote Link to comment Share on other sites More sharing options...
Charles_Darke Posted October 30, 2006 Share Posted October 30, 2006 Sorry to sumarise I guess what I really want to know is where best to get an income for life from £175K ( inflation proof and capital protected in long term).... If you're after an income for life, then putting all your eggs into a single, un-diversified, low-yield and illiquid asset might not be the best option. Quote Link to comment Share on other sites More sharing options...
Guest prudence Posted October 30, 2006 Share Posted October 30, 2006 (edited) you don't want your capital to be eroded by inflation but you don't seem to mind if it depreciates through a general market fall. Very muddled thinking, IMO. If the market falls is it likely to fall far enough to offset any depreciation of the capital through inflation. You will almost certainly have IR rises on deposit accounts although I accept that they do lag inflation........ Edited October 30, 2006 by prudence Quote Link to comment Share on other sites More sharing options...
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