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Original poster

What to do with 100K?

37 replies

hoppingthrough · 01/03/2019 14:57

I will be receiving approx 100K from sale of the house I owed with ex. In terms of a new property I will need at least a 2 bed with DC but even with a new sole mortgage it looks unlikely I will be able to buy anywhere new in this area unless shared ownership. I have read mixed views about these types of properties.

So, WWYD with 100K? I could either buy a very small cramped property with 2 bedrooms, shared ownership property or going back to rental market and investing in money some other way? Thank you!

OP posts:
HollowTalk · 01/03/2019 15:00

How committed are you to living in that area?

Original poster
hoppingthrough · 01/03/2019 15:02

Very committed as everything is here. I could afford a lovely rental property in the centre with garden etc or buy cramped 2 bed or shared ownership on outskirts of town.

OP posts:
FoxyStoatontheProwl · 01/03/2019 15:02

Can't you use some of it as a deposit for a mortgage? And then put the rest into savings?

poppycity · 01/03/2019 15:05

100K is a pretty sizable deposit, depending on how much homes are in your area. Another option is to buy a 2 bed flat if you are looking for city centre, some houses have been turned into 2 flats and one comes with a garden etc. I have friends in Wimbledon and in Edinburgh with lovely garden flats. Might be a good option for you!

Missnearlyvintage · 01/03/2019 15:06

If it was me, and I was tied to the area in some way, I would try and find a little two bed in the nicest area I could afford and buy that for now I think.

I would then work towards saving for a larger house and have that as a longer term goal.

Is the 100K the price of a little two bed, or is it what you would use in addition to a mortgage?

If it is the price of a little two bed outright, then I don't think moving areas will get you much more for your money.

DaphneduM · 01/03/2019 15:27

I would get the advice of a reputable mortgage broker and see what you could borrow. Is there any way one of your parents could maybe act as guarantor in order for you to get a slightly larger mortgage? Personally, as £100k is a sizeable sum, I would definitely try to buy rather than rent - you will also have much more security and stability for you and the children.

RomanyQueen1 · 01/03/2019 15:33

I would move and buy houses to provide a rental income. You'd get a couple needing a bit of work doing, up here.
Or if you want to stay where you are it's a huge deposit for a mortgaged property.

HollowTalk · 01/03/2019 16:37

What are the disadvantages of shared ownership? I only know one person who did it and it worked very well for her. I think she owned 35% of a flat in London - she's just sold it three years on and made £35,000 on it.

Original poster
hoppingthrough · 01/03/2019 17:08

Thanks. I wouldn't be able to buy much here apart from a very squashed 2 bed flat probably without garden on outskirts of town, away from school/work etc. School run would probably take 30 mins if we did this. 2 DC currently sharing room so for a tiny 2 bed flat it will likely feel cramped. Even then I'd be looking at minimum of 200K in this area and not sure I could get mortgage for 100K because I am currently working pt Confused Last time I asked they said around 80K mark. Thanks @DaphneduM I'll see if I can borrow more.

My instincts are leaning towards rental because we could get lovely 2 bed in centre (basically near where we live now) with garden and space but at £1200 a month that is 14.4K gone in one year Shock

Shared ownership sound good but when looking into it it seems like a lot of money. For example one property I am looking: 30% share will cost 130K so I'll still need a mortgage plus rent of roughly £450 plus £230 monthly service charge!! Shock Another is 30% share also at £130K with rent of £700 and service charge of £200. Seems a lot for a tiny share and I have read they do not rise in value that much compared to usual properties...

I guess with property you see a good return but any other ways to invest? Would I be a fool to go back into rental market?

I need a rich man to come along.

OP posts:
CatToddlerUprising · 01/03/2019 17:10

Have you looked at new builds or the help to buy scheme?

HollowTalk · 01/03/2019 17:13

Can you tell us roughly where you're looking so that we can look out for things for you? I love a Right Move search!

Alanna1 · 01/03/2019 17:19

In your shoes, I would definitely buy. A £100k deposit won’t come again and it’s otherwise 6 years or less rent, and then what? Buy a small 2 bed place - ideally with some of potential for a 3rd room in due course eg when you go back to working FT. A half hour travel to school is totally fine - lots of my friends do this.

mimibunz · 01/03/2019 17:19

Are you able to work full time so you can qualify for a bigger mortgage? A shared mortgage seems scary but then I don’t know anything about them.

madcatladyforever · 01/03/2019 17:22

Buy your own place every time even if it means living in a cheaper area.

MoreProseccoNow · 01/03/2019 17:32

Have you seen an IFA? They often gave good suggestions for maximising how far your money could go eg mortgage term to age 70.

Is there any possibility of increasing your hours?

Unfortunately BTL is only economically viable if you have a tiny mortgage.

I would personally avoid renting as much as you possibly can & would buy a "good enough for now" place. Perhaps a fixer-upper. You can sell up & move in a couple of years.

RippleEffects · 01/03/2019 17:35

If you are getting any kind of top up to your income I.e. tax credits or universal credit, having this money as an investment could prevent you being able to claim.

DaphneduM · 01/03/2019 18:28

While it will undoubtedly be easier to rent a property in the short term, I would urge you to think about the long term - buying your own place is always going to be a good investment and will secure your future. Good luck, OP - great that you're open minded to exploring all the options.

blue25 · 01/03/2019 23:45

No don't go back into rental. All your money will have disappeared in a few years and you'll have nothing to show for it.

Buy a house and hopefully you'll make some equity and at some point when the mortgage is paid off, you'll own the house.

Mosaic123 · 02/03/2019 01:37

Try and buy a 2 bed and use the Government's 'rent a room' scheme to help you pay the mortgage by having a lodger. Their rent can be paid to you tax free up to a certain amount.

It need not be for ever.

NCforthisoneb · 02/03/2019 02:09

This isn’t going to be a popular view on MN but in your position I would get a BTL as an investment and rent to live.

Missnearlyvintage · 02/03/2019 08:42

Is there an option to get a more spacious 1 bed flat, then convert the kitchen to a kitchen living area if big enough, and use the living room for either your DCs or you to have as a bedroom? You might be able to get nearer to the place you want to be in town that way?
It’s a sacrifice, but that’s what happens in HMOs and there’s lots of that kind of thing going on when developers buy one bed flats on Homes under the hammer etc.
My grandparents lived in a small one bed flat with my Uncle. The bedroom was very small and couldn’t fit a cot and bed in, so my Uncle had that as his room, and my grandparents slept on a sofa bed in the lounge...

DustyDoorframes · 02/03/2019 10:12

The shared ownership flats sound like much better value than renting? If you think of it as cheaper rent, and a good investment for your 100k (remember there is no magic safe investment which is going to bring in brilliant returns!) it might feel less weird?
Also remember that if you rent your landlord can have you out at pretty short notice if they so decide, which is incredibly disruptive.

MoreProseccoNow · 02/03/2019 11:21

I definitely wouldn't go down the BTL route, especially with recent tax changes & regulation. It's not easy money, you will likely need to appoint an agent (which will eat in to your costs) & you will incur CGT when you sell. Plus the additional costs (safety checks etc). And one bad tenant can take 6 months to get out - and wreck your investment.

OhTheRoses · 02/03/2019 11:27

Could you buy a good one bedroom and let it to fund rental on the house you live in. BTL is still a reasonable deal if no mortgahe involved. Not sonsure there would be a CGT liability.

0rangeB0ttle · 02/03/2019 11:39

100k is a lot of money. With interest rates for savings being so low, it would take you a long time to save up this amount. So suggest BUY, BUY, BUY !

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