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Got some money coming my way

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Author Topic: Got some money coming my way  (Read 897 times)
Jr. Member
Posts: 52

I like property

« on: June 18, 2018, 12:11:53 PM »

Well got a letter today confirming that the probate for my nans house will almost be finished and that I will own 25% of it. A family on my nans street own 98 of the 109 properties on her road and they want it so it will be a easy sale. Now what to do with the money? Not had the house valued yet.

I estimate on a bad day my share will be 100k up to about 150k. My mortgage on my flat where I live is about 135k otherwise my rental flat I owe 98k so I could pay that one off but then my wife says it's a bad idea as will pay tax on the profit. So not sure if I should pay the rental off or just over pay on where we live and maybe buy a couple garages to rent out? Or I could spread the money out and over on both?
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« Reply #1 on: June 18, 2018, 12:45:22 PM »

I always play safe with my own home. It might not be the most sexy, or adventurous, or even the most clever economically, but it's what I focus on first... the roof over my own head.

It would certainly be possible to use the funds to purchase another property, to let out, then some time later re-mortgage it for as much as possible and still use the funds to pay off a massive chunk of your own home, I suppose.

In this kind of scenario a spreadsheet is your friend. But don't ignore your gut.
Jr. Member
Posts: 52

I like property

« Reply #2 on: June 18, 2018, 01:28:46 PM »

I'll wait then until money is in the bank and sit down and work it out.  But your right it best to pay off where you live or at least over pay on it as much as I can.
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« Reply #3 on: June 18, 2018, 02:17:48 PM »

My humble opinion - buy to let is a game you play when the roof over your own head is secure and you have spare capital. Not because it's high risk and you could lose it all (like gambling) just priorities. There was a study (Upad, I think) the other day saying the game is still profitable, despite all the recent changes, but it's not considered easy money like it used to be. I still do it because I actually enjoy it... I also like (and I'm serious) providing what I consider a quality product for a fair price... although I'm no social philanthropist at all.
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« Reply #4 on: June 18, 2018, 02:55:42 PM »

Well, there's worse dilemmas to have in life, I suppose!  :)

On the one hand, it's nice to know that there's nothing secured on the roof over your own head but, on the other hand, buy-to-let mortgages generally come with a higher rate of interest so, even after basic rate tax relief, you might be better off tackling that one first, or even pay off part of each if, by so doing, it gives you access to a better rate. Are you currently in a fixed period with early repayment charges on either or both mortgages?

Incidentally, I'm assuming you're not looking to expand your property empire (maybe not the full 98 properties to start with!) or invest the money elsewhere.
Jr. Member
Posts: 52

I like property

« Reply #5 on: June 18, 2018, 04:48:22 PM »

Yeah could be worse.  The buy to let i'll have to look at but i'm not tied in and I have about 15 years left on that and it was a interest only when mortgage express where about and now I think rosinca own them.

Don't want anymore BTL as the 2 we have are stressful enough.  Bit of a strange setup we have.

We live above my wifes old shop which she now rents out but about a 2 years before we meet she brought the property next door and split it in to 2 and the leasehold.  Next door needed a lot of work and she had to sell one and by that time we were getting married and I still lived at home.  So she sold me the studio flat so I got on the ladder (not giving her the money I had saved to buy a place) and she kept the rest and I look after them all.  The plan was to eventually rent out the flat we live in and buy a place together but property was just going up and up so about 2 years ago I had some money saved so we just did up her flat so I am very reluctant to move and so is she as it's all nice and I now feel more at home in it. The shop will be paid off next year.

I was tempted to invest in a classic car but I bet I will end up losing money.  Or maybe buy some garages?

Also not having kids I feel like a kid in sweet shop myself.  Do I just spend the money or be wise withit?  I'm 36 and wouldn't mind being retired or being able to work part time when i'm 55

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« Reply #6 on: June 18, 2018, 05:40:54 PM »

When I ran all of my sums, I concluded that I needed 10 properties let out, and be mortgage free, to live very comfortably and be able to consider retirement (apart from the Landlord bit, of course) at 55, or before. In the North, those properties would bring in - on average - 500 per month in that day and age. The reality is that only 1 property brings in 500 today, the next brings in 525, the next 625, then 850 etc. etc.. My advice was coloured by my own progress - I have stopped growing after a recent purchase (maybe 1 more, we shall see, I would very much like to get to 10 because it was that target I set years ago) and it's now about paying down the debt to allow coasting to take place at full tilt.

I am not sure that would be possible with 1, or 2 or 3 properties let out. I don't want to be in retirement and thinking about cutting-back - I want to maintain the life I have. Obviously, when I reach 55 I will draw at least 25% of my pension pot tax free and provide that kicker to the debt (but I actually hope it will be gone by then, so maybe it could be another modest property).

If I knew then what I know now I would not have directed money to a pension since I was 23. I would have redirected it towards property and invested it myself. It would perform better.
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Posts: 4

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« Reply #7 on: July 01, 2018, 05:01:50 PM »

I agree with those who suggested securing the roof over your head. Once that mortgage is gone, you could then overpay on the BLT.
As someone who is mortgage free and renting out their property, life is so much easier and less worrying.
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