WWYD with £500k?

[indigo13]

Your DH has a safe but unfulfilling job with £60k salary, you are a sahm. As it is you have a comfy lifestyle with two holidays a year and enough left to save £500pm. You can get your mitts on this £500k but with a catch, it can only be used to buy a commercial property. If you leave the money where it is you will get it at £15k per year upon retirement instead. Help!

Do you then have to keep the commercial property indefinately?

No

15k per annum vs 500k is a 3% return assuming retirement is now.

Compound interest would grow that 500k.

You should be able to do better than a 3% return. Also if buying a pension with the money you could look at a return that grows overtime so stays a true 15k or hopefully more like a true 20 or even 30k if you've a decade or more before retirement.

So I'd look around for an investment property that could then be sold and invest the 500k with help of proper financial advisor.

Blimey! Very strange condition... are there any other conditions?

Is this using a sipp wrapper to reinvest a pension pot in buying a commercial property?

How much income could the commercial property generate potentially? Wealthiest people I know are in commercial property.

If there is no requirement to keep the property, buy it and sell on after a reasonable period. Use capital as you wish.

Yes it's a sipp. No commercial property in particular, so can't say what the income would be. We dont know what to do and it feels like a crossroads in life

So it's not either or. There are potentially other options like looking at sipp(s) with greater flexibility so your £15k/ annum could be larger. You could do a 50/ 50 split between sipp commercial and sipp stocks and shares or even a three way split to diversify some stocks and shares, some investment trusts, some property.

I would suggest you don't want to be managing commercial property yourself so speak with commercial agents as you can get purchase and manage deals.
There are people and companies that do hands off investment. But for this it is networking and word of mouth to find someone you can trust.
You can get better returns than on a pension , you just need to decide what strategy works for you and how much effort you want to put in.

I wouldn't be buying a commercial property personally. The chance of it standing vacant for long periods of time would put me off.