Just won £50000, what to do ?

[CollegeDoctor86]

My first post on here, as i value the wealth of knowledge of the mumsnet masses. This is not a humble brag, but a genuine ask for advice. Myself and DH have been fortunate enough to have come into some money £50000, such a wind fall was completely unexpected but very much welcomed. We are very unsure what the best thing to do with it would be as it was unexpected.
At present we are committed to our long term financial goals and have been saving and are very focused. DH works in the city and is fortunate enough to earn just over 140k a year, I work in a small local hospital and take home about 2/5th of that. We are both in our mid 30s and have no DC at present. We have a mortgage of 180k and savings of 50k in 2x ISA ( maxed out ) and shares.
We know we are very lucky to be in this position but really not sure if we should use the money to pay down the mortgage or use it to buy a buy- to-let property. We have always wanted to venture into owning another property to rent. We are just not sure if this would be the most sensible use of the money. We don’t plan to buy another car, or go on holiday with it as we are pretty strict on it being used to add wealth. I am just wanted to know what the mumsnet hive think might be the most sensible,
a) buy to let b) stocks and shares c) pay down the mortgage with the entire amount. ( bearing in mind this is not our forever home) d) save

Take it off your mortgage, I wouldn't BTL if you don't own your house outright. You'll also pay tax on your property income which will be 40% I assume in your wage bracket.

I've got a property and it's a pain when you need to sort out any maintenance problems whilst working and sorting out children (although you could always pay a management company). Not worth the hassle IMO.

I do find it perplexing that your husband “works in the city” but lacks the financial literacy to figure out what to do with 50k.

I'm very much in a position to BTL but I don't because I think it's morally wrong to effectively snap up a FTB house in order to rent it to that thwarted FTB at 50% more than their mortgage would have cost them.

It is socially irresponsible.

I recognise there's a market for rental property, but imo, the market should be regulated in a way that strongly discourages 'Ave A Go amateur LLs with their single BTL that they don't have a clue how to manage, to the detriment of their tenants.

But I am aware this is a highly divisive issue on MN.

I am not sure why you asking. You can easily sort this out yourself. I would not ask MN what to do

@Silvercatowner

I'm partly with *@QueenoftheIceAge* - a nice holiday then give the rest to charity.

lol

@Prufrocks

I do find it perplexing that your husband “works in the city” but lacks the financial literacy to figure out what to do with 50k.

Could he not be a lawyer in the city or does working in the city immediately mean it must be for a financial firm? Asking a genuine question here. I work for a tech start up in the city, so wondering if I should refrain from telling people I work in the 'city'? #confused

@LesLavandes

I am not sure why you asking. You can easily sort this out yourself. I would not ask MN what to do

I mean, the OP has asked a question (a perfectly legitimate one) in the Investments section of this forum and is being questioned why she has done this...

I would throw the 50k savings and the 50k surprise into the mortgage, then pay off the remaining 80k fast and afterwards save for forever home house deposit while mortgage free. Mean while keep an eye on house prices and buy when they are rock bottom. It might be that you rent out your forever home initially

In a similar situation - lower salaries but comfortable. Looked into buy-to-let but the tax on the rental income and the prospect of having to pay council tax etc if the property was not let for any period of time put us off. We’ve just bought premium bonds for now whilst we decide what to do with it. We’re in our forever house and mortgage interest rate low so not worth paying it off at the moment. In your position, I’d save it for the future If you’re wanting children- extended paternity leave/ part-time hours is a luxury few can afford but could be priceless.

I'd pay off mortgage - future is uncertain. Is your DH's job secure? Is anyone's? I'd play it safe, but that's just me.

Nice problem to have

Premium bonds? Then the money is easily accessible if you need it. And there's always the hope of a little email at the beginning of each month.

I would throw the 50k savings and the 50k surprise into the mortgage, then pay off the remaining 80k fast and afterwards save for forever home house deposit while mortgage free. Mean while keep an eye on house prices and buy when they are rock bottom. It might be that you rent out your forever home initially.

I think I'd do this too. Although more because it suits my personality than because I know anything about investments!

Do you plan to have DC? That would change my approach too.

if this is England you'd be nuts to become a small scale landlord now. Evicting non payers or trashers was difficult enough before and is now virtually impossible. I doubt you can get new insurance policies to cover unpaid rent.

I also doubt that it will make financial sense once you work out the actual costs; hefty insurances, repairs, tax etc etc etc. Those days are gone.

what do you do? Savings rates have been negative in real terms for years, and are close to being numerically negative - tomorrow the sodding National Savings cut their rate to 0.01%. That tells you what our government thinks of savers. Stuff your pensions as full as you can, put more in stocks and shares ISAS and settle in for the long haul.

and yes, pay down that mortgage as long as you have enough ready cash to cope for a year if you lose your jobs tomorrow. Which is always a possibility.

I wouldn't pay off anything extra on your mortgage. You're likely to get a better return on investment in S&S (even outside an ISA) than you would paying off cheap debt.

I could look after it for you... Hinestly, it's no bother.

Your mortgage is fairly small for London so I assume it's fairly manageable? If I had 50k to fritter I would put it towards an extension on my house personally, but only you know if yours would benefit from that. I'd hate to be a landlord!

I would hold off and keep it in savings, see what happens to the property market and then upsize.

If you don’t need more space I would defo pay off a huge chunk of my current mortgage.

Or a holiday home? We’ve just got a flat south coast and will rent it out to help cover mortgage but will also go there whenever we can so best of both.

Save it for school fees, just in case...

Read Meaningful Money handbook

Invest in stocks. You won't make any significant money with one buy to let. You'll need at least 3/4.