Who do I need to talk too, financial person to take birds eye view of my current situation. I can't see wooden fire trees

[SeetheseeyessogreenIcanstarefo]

I spoke to one financial advisor and he wasn't quite right. I need some to quickly look over my situation and give advice.
I have inherited at flat, needs lots of work and and generating Council tax, it's worth about 40 to 55 at push. Under the flat is a shop, better condition with a Tennant about too go on 8,000 per anum.
We have a mortgage of 58000. I am sham, dh earns around 24000.
My friend wants to buy the flat for 40000 pros, takes it off my hands meaning I can keep the shop, and it's income. Then in future sell. Cons, overall all selling separately could significantly devalue the shop by itself could achieve 50, 60 thousand where as if I sold flat and shop right now, I could achieve 130 to 140.

If I sold whole thing I would pay 30 off mortgage saving us 200 per month, I would do either loft room or side return in our house and put some into stocks and shares is a and some into our savings kitty.

I have no pension and been told as not working I can't have one.
I need someone to look at this and tell me best course of action. The finance person I spoke too was more about helping people invest larger sums of money.

Mortgage is on our home BTW, there is no mortgage on the property.

I would keep both and use them as your pension. Once they are paid off you will draw an income from both. The side return and investments can wait years

The flat is uninhabitable, it needs thousands of pounds of work doing which I can't afford. The whole property is also along way away.

Get the flat and shop valued by a local estate agent, possibly an auctioneer if they are more used to derelict property. I would either sell both or keep both - otherwise if you share freehold/maintenance costs with the top flat the shop may end up with a share of the renovation costs, if exterior work is involved

I'd sell. They sound as much like liabilities as assets; it's going to be a whole lot of stress for you - it already seems to be.

Then think carefully how you spend the sale proceeds - you should be able to invest some, and spend some on work to your house which will improve its value.

Surely you can have a stakeholder pension. I started one for my children before they were teenagers.

Mummy it's been valued as a whole, 130 to 140 at auction.
Separately flat in current state, 40 /50 thousand, shops separately 50,60 thousand. So loss of of 20/30/40 thousand. Interesting about external costs too. I would retain the freehold and would be be worried about ground rents and costs.
However I am equally worried by selling and loosing the money to inflation, bad investments or having to draw down capital.
But who is the professional I need. It's just a quick glance at my situation really, I am happy to pay for but I feel they want proper long term investors

Contact a few different estate agents. Arrange a date and travel there and have them go all on the same date.

It's clear you don't want to use these things yourself so consider selling the whole thing.

The agents will advise on sale or auction.

Then consider putting money into premium bonds until you decide what to do with it.

I would not sell to your friend either. Not until you have asked the agents if it will affect the sale of the shop?

Yes I have been told that selling the flat will affect the sale of the shop.
But I have also been told that the shop rent 8,000 per anum is a really good yield

I know what the agents say it will affect sale of shop, but over all I need financial person

Sell together or keep both. Tell your friend you would make too much of a loss selling seperatly.

So option 1 is sell to your friend, keep the shop and income.

Income from flat sale enables you to reduce your mortgage so that's worth £200 a month for however long your mortgage is - means you can extend your home as you want. Would you keep the shop long term and use the rental Income from shop as your pension?

Option 2 is sell both now. Using £30k to reduce your mortgage, again means you can extend your current home, then the rest you'd have to invest to give you a pension, so I think the question might be can you invest the £100k that's left over so that you get at least £8k a year pension?

Can you afford to rent out the shop now, save the money and use it to do the work to the flat?

What work needs doing? You say thousands but what exactly and how much?

Personally I'd save the annual 8k till you have enough to do the work on the flat. And keep both properties.

Rhubart,

flat needs total re wiring, it needs water separating from shop, re plastering, walls knocked down and a new kicthen ( there is no washing machine plumbing at present) and new bathroom, again its tiny and would need enlarging. its one bed. Its also hundreds of miles away I cannot over sea building works easily with a 4 year old and a 9 year old.

Would you keep the shop long term and use the rental Income from shop as your pension? Yes I would be looking to retain shop longer term in this scenario.

so I think the question might be can you invest the £100k that's left over so that you get at least £8k a year pension?

This is where I need someone financial to tell me, the person I managed to speak too did say 8% return is very good. But there is no kitty for un expected expenses....whatever they may be in regards to the shop.

BUT if I wantto sell the shop, I am loosing 20/30/40 K overall from if I sold whole thing now...

The profit from the shop rent would be about 60 per week because I would loose tax credits, once its rented out.

ie not enough to save to do work to flat, beaing in mind the flat is already costing me £110 or thereabouts per month in council tax.

Income from flat sale enables you to reduce your mortgage so that's worth £200 a month for however long your mortgage is - means you can extend your home as you want

200 a month would mean an awfully long time to save up to do work, a loft conversion is 40 grand. I could do a loft conversion, but would still need extra money to pay for it if I sold the flat. Or pay off substantial chunk of mortgage and put some into savings.

All opinion, not professional advice

Have you investigated selling both with the commercial rental tenant in place? That might be seen as a bonus to buyers.

Realistically after costs do you think you're probably talking £115-120k as actual tied up cash.

So look at what your 120k is doing invested in property i.e. an 8k return but you're no doubt paying 20% agency fees/ insurance/ and need to allow a bit for maintenance so again trying to think of real in your pocket cash maybe £4,500/ year

So £4,500 (which is taxable) against a 120k investment is a bit under a 4% return (best check my maths though!) And theres also a time hassle factor. Also potentially empty periods in the future.

What mortgage rate are you paying, if its more than 4% and paying it off would give you relief then that would seam sensible.

If you're under 40 check out LISAs because whilst tied up long term when you do want to retire its very flexible tax free cash and topped up going in plus untaxed coming out where as pension contributions are tax free goung in but taxed coming out.

Standard stocks and shares ISAs are good, no tax to pay, and there are various funds you can invest in within them, so effectively you're paying a nominal fee for someone to invest in companies for you or you can start to put chunks of money across various companies yourself and create your own cross section stock portfolio.

If you look at sites like moneysavingexpert you can find accounts that are currently paying good interest.

Thinking about you current savings do you have a fairly accessible rainy day/ redundancy/ big bill fund? Something like three full months all bills and outgoings.

My opinion would be: if you're stable in your home and don't need to extend the mortgage etc in the future pay it off.

Put a chunk of money in a do not touch cash investment fund for emergencies.

Put a chunk in a LISA (if you're under 40)

Start your own stocks and shares ISA's for you and your DH.

yoy could borrow from the bank against the shop if you needed to do renovations to it.

However are you certain you would be able to rent it out? You could contact letting agents in the area to see if it's an attractive proposition for business owners?

You can have a pension when you're not working! If you put in £2880 it gets topped up to £3600. It also gets taken into account as 100% deduction from household income on your tax credits.

see here for more info

Ah tax credits makes a difference then. Is being on tax credits a long term position, in which case that definitely needs to figure in your calculations. In which case selling the lot, putting a chunk into a loft conversion and the bulk of the rest into a pension might be better.

If tax credits to balance household income are likely to be for more than a few years you need to consider the changes with universal credit coming in. Savings in ISA aren't an issue with tax credits but are with UC.

Once savings are over 6k you start to loose UC and at 16k I believe you don't get any. Also pension contributions are 100% deducted from household income with TC but 50% UC. Size of pension pot doesn't effect payments.

If you're thinking you'll be working in a few years time then if you can try not to get too bogged down with optimising tax credits because its so fluid and anything could change over the next few years.

A financial advisor - whom I spoke to briefly said I would not be allowed a pension because I am not working and paying NI therefore I would not be allowed the tax allowances a pension offers.

I have sadly just missed the long term Isa boat I am 41.
titchy hopefully not re tax credits - my youngest is literally starting school in sept, I have seen a school time only reception job and I am going for it with all my heart but I do need term time only work.

If this falls through I will look to volunteering on school and going from there towards TA or teachers.

yoy could borrow from the bank against the shop if you needed to do renovations to it I might sound like a massive wuss but I am scared to borrow from bank for this - yes I could rent it out there is a massive shortage of homes in the area but I dont want to get into debt like that ( my DP had our family home repossed in 90's for such a small amount of mort owing) which is why I am also thinking, with Brexit - job secutiry....get out mort down...

Our mort rate is about 2.39%

So look at what your 120k is doing invested in property i.e. an 8k return but you're no doubt paying 20% agency fees/ insurance/ and need to allow a bit for maintenance so again trying to think of real in your pocket cash maybe £4,500/ year

The agency fee will be 950 one off for finding tenant, insurance I pay for but the tenant pays 50% of that. Going forward I will manage it myself because I am hoping once its let - there will be minimal work.

tandard stocks and shares ISAs are good
DF had a small one which I have also inherited, I can add to it of course, I have no idea if its a good one or not but I can certainly look into that and change or add to it. Its with M AND G.

If you put in £2880 it gets topped up to £3600. It also gets taken into account as 100% deduction from household income on your tax credits

This is what I thought but finance guy said no, I have emailed H and Landown though to get proper clarification on this.

I'm a financial adviser and what you've been told about pensions is wrong.

Anyone (including children and SAHM's) can put in up to £2,880 a year into a pension and get basic rate tax relief (20%) which is what tops it up to £3,600. Doesn't matter if you are a non tax-payer. You can make additional contributions too if you wanted to, but those will not benefit from any tax relief if you aren't earning. There is no link to NI contributions for a personal pension, NI affects your entitlement to State Pension. And in fact if you are in receipt of child benefit then you'll be getting home responsibilities credits on your NI record so not an issue.

It strikes me that you have a great deal of hassle on your hands that is more trouble than it's worth with the building being so far away from you, in such a state of disrepair, and not having ready cash to throw at it.

How far off retirement are you? How many years would you have to invest the sale proceeds for before you needed to generate a retirement income? There are perfectly sound options available for sensible long term investment that you may not have considered but a good local IFA could advise.

A financial advisor - whom I spoke to briefly said I would not be allowed a pension because I am not working and paying NI therefore I would not be allowed the tax allowances a pension offers.

I have sadly just missed the long term Isa boat I am 41.
titchy hopefully not re tax credits - my youngest is literally starting school in sept, I have seen a school time only reception job and I am going for it with all my heart but I do need term time only work.

If this falls through I will look to volunteering on school and going from there towards TA or teachers.

yoy could borrow from the bank against the shop if you needed to do renovations to it I might sound like a massive wuss but I am scared to borrow from bank for this - yes I could rent it out there is a massive shortage of homes in the area but I dont want to get into debt like that ( my DP had our family home repossed in 90's for such a small amount of mort owing) which is why I am also thinking, with Brexit - job secutiry....get out mort down...

Our mort rate is about 2.39%

So look at what your 120k is doing invested in property i.e. an 8k return but you're no doubt paying 20% agency fees/ insurance/ and need to allow a bit for maintenance so again trying to think of real in your pocket cash maybe £4,500/ year

The agency fee will be 950 one off for finding tenant, insurance I pay for but the tenant pays 50% of that. Going forward I will manage it myself because I am hoping once its let - there will be minimal work.

tandard stocks and shares ISAs are good
DF had a small one which I have also inherited, I can add to it of course, I have no idea if its a good one or not but I can certainly look into that and change or add to it. Its with M AND G.

If you put in £2880 it gets topped up to £3600. It also gets taken into account as 100% deduction from household income on your tax credits

This is what I thought but finance guy said no, I have emailed H and Landown though to get proper clarification on this.

I am 41, thanks for pension advice I must admit it sounded strange to me.

I would of course like to get a proper pension fund going.

@sunseed, is that a SIP your referring too, should I get one of those?