WWYD with £100k Inheritance

[abitcluelesss]

If you were currently living in a nice house mortgage free, in a nice area with no intentions to upgrade/move for the next few years (DS is about to start at a lovely school and we want him to get settled for a few years first), and you inherited approx. £100K, WWYD with it?

I've heard that the BTL market is dead, so was wondering about buying a commercial property to rent out? Or would you invest the money somewhere else? Or just keep it in a high interest savings account for now?

As you can tell we're a little bit clueless (albeit in a very fortunate position!) and don't want to waste what could be an amazing opportunity.

I think if you gave capital to invest then the buy to let market isn't vecessarily dead. You won't need to cover a certain amount for mortgage so bar fees etc you'll be mostly profit.

It depends on area. I'm in Scotland and for £100k you could get a 2 bed flat that would rent out for £600 a month with no probs... obviously in other areas that wouldn't be the case. That would mean £6k a year ish...over 5 years or would probably increase £15k?

Is your nice area where you stay "touristy"? I'm in a similar position & im contemplating buying property to do holiday lets on a self-catering basis. More to do on a week to week basis than btl but I'm currently a sahm so this should give me an income and something to do with the time I have now that dc's are getting older. & if I'm doing my sums properly, a better return.

Savings for future house deposit/tuition fees for DS?

And a long, fancy holiday!

With that amount I would consider paying a reputable independent financial adviser to help you work out a good strategy for the short and long-term.

Thanks Redtartan we'll have a look into it then. We're in the West Midlands, not far from Birmingham so we could probably get a similar type property. I just worry about flats because the majority are leasehold aren't they?

horriblehistorieswench not very touristy, but that was another idea that I thought of. My aunt lives in Devon and helps out another holiday let by doing the cleaning for them, so maybe that's an idea. We could buy down there and she could manage it for us maybe.

MissSueFlay Yes I said to DH that we should get some proper professional advice, so think we'll do that too

catlovingdoctor I said to DH that whatever we do, I'd like to be able to help DS out in the future with tuition fees/getting on the property ladder. I thought we could get a btl or something now, and then sell in the future to free up some cash to help him out maybe

I would invest 70% in my pension, 20% in a way that would earn a little interest but be fairly accessible (say 30 day savings) and 10% in accessible savings (ISA).

Maybe not exactly those figures but you get the gist, save most of it for long term but have some available if needed.

Property might go down short term but if you are in it for the long term, you're unlikely to lose out.
Also even if you don't make an actual profit from buy to let (unlikely), this could mean the difference between DS being able to afford a home of his own or renting. Whatever the housing market does you will be going along with it. You could give him the capital gains and still keep your original 100k plus a bit of interest.

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MeltorPeltor The sensible side of me is thinking that we should invest for the future, but the spontaneous side of me thinks "life's too short, enjoy it a bit whilst we can"

Whinesalot I like the idea of that, I'm giving up work for a year whilst DS attends preschool, and if we had a BTL then the monthly rent we receive from that would cover some of my wages. Then in the future we could make the decision to sell and then help DS out

BTL comes with a lot of outgoings as well as income, you should have a look at some detailed figures before you launch into it - if your DS is only at pre-school then there are a lot of years ahead of managing it. Property isn't the only vehicle for growth, have a look at some of the high performing stocks & shares funds you can invest in via ISAs and SIPPs. You could invest in real estate funds and benefit from a rising property market without getting involved in actual property ownership.
Personally I would spread it around a variety of long term investments (including a pension lump-sum), but give your family an up-front treat!

MissSueFlay That sounds like sound advice to me. I'll also take your advice of speaking to a financial adviser too so that we don't end up wasting it on stupid investments rather than clever ones

What about a holiday home somewhere that you could use as a family when you wanted, but let out the rest of the time to make it party for its upkeep and bring in some extra money?

Then you've got an investment with some opportunity for fun as a family?

Make it pay, not party!