What to do with money? Property?

[Cupofteaandbiscuits]

I’ve been fortunate / unfortunate to inherit some money.
The amount would be enough to buy a flat where we live. We are however tied into a long contract in the property we currently rent as this inheritance was unexpected. We have two DC.

Im thinking about buying a flat and renting it out to cover mortgage costs. Is this a stupid use of the money? I feel like bricks and mortar is a good investment but not sure?! Always had no money so I’m a bit lost!

Being a landlord is stressful and expensive. It if were me I would pop 20k in a cash isa, 50k in premium bonds. This will mean you don't pay tax on the interest. The rest i would put in high interest savings accounts/bonds and use for a house deposit in the future when the lease ends on your current property.

And maybe have a really nice holiday!

Would the intention be to live in it? If you've passed 6 months of your rental agreement I think you can give notice but may be liable for the rent up to the end of the term if the landlord can't fill the property (check this). Seems silly to be paying rent when you could afford a mortgage free property.

Renting out property has to be done properly. There are now quite a few legal obligations on landlords (rightly) and you need deep pockets for repairs, replacing goods, void periods, management fee's etc. New legislation is coming in that might make it more difficult to get rid of problem tenants. That's why so many landlords are selling up as it's a lot of hassle and expense.

I'd park the money for a bit until you've done your research.

As others have said would perhaps avoiding becoming a landlord if you don't have plans to buy more as it's when you have several you make returns. I agree putting a chunk in ISAs, given most savings accounts are offering upwards of 5% or more for higher balance accounts you could easily lock away for a year or two and make a good return to fund some fun money and keep reinvesting the original money. Stocks and shares is another route, again you can have an ISA version to avoid taxes and you can have both normal ISA and Shares ISA.

What is a long contract? It makes more sense to put the money towards a property that you will actually live in if you are renting. I would put the money into an ISA and some fixed rate bonds for the duration of the rest of your rental contract before using it as a deposit to buy a home.

I'd put it in savings accounts, and then buy somewhere to live in myself.

Remember it can take 6 months to buy a property so even if your rental has 12 months to run you could start looking soon and the time will soon go by.

Do you mind me asking how much the inheritance is? Do you have savings? If not, I would advise you not to buy a flat as there will be so many costs associated with it.

There will be lots of people here who can recommend saving schemes with good interest rates. You could save your money in a mixture of short and long-term ways.

Go to a financial adviser, not mumsnet. And don't disclose your personal details here either.

I would put down a huge deposit and small mortgage and buy a house rather then a flat

If you are paying rent now a small mortgage will surely be less to pay and be yours at the end

Rule of thumb is firstly pay off any debts, then emergency fund of 3-6 months expenses in high interest instance access accounts. Be aware of your interest allowance and use flexible ISAs.

then look at your goals - if you’d like to buy a house at some point then a LISA or help to buy ISA might be a good idea to get the bonus available there, when you’re ready.

it depends on how much you’ve received to look at other goals - savings for you or your children - uni, weddings, cars, house deposits for them, a once in a lifetime trip or some lifestyle changes.

Inheritance is a funny one, as you feel a responsibility to be good with it, unlike a lottery win. It’s quite nice to do something nice to mark it too though, rather than be totally sensible.

Thank you. It’s not a massive amount but DH and I had recently accepted that we would never own as with stupid high rents we can never save enough! I have a LISA already that I put a tiny amount in when I can

How old are you? What other cash savings do you have? any S&S ISA and how is your pension provision looking?

Not sure how anyone can advise you without knowing anything about your situation.

Really hard to say with so little info.

I would avoid becoming a landlord as it is not an easy way to make money vs other kinds of investments. It's a lot of work, you could get nightmare tenants, the former tax breaks are much reduced and so on and so forth.

If your goal is to use the money to buy a property either as a deposit or outright, but you can't move into anything immediately, put the money into a high paying cash ISA and max out that allowance, then put the rest into high interest cash accounts. When you need it to buy, it's there, plus interest. DO NOT put it into stocks and shares unless you will not want to access it for 5-10 years as that is too short a time horizon for investing.

But do bear in mind that a) you may be able to break your rental contract and b) buying a house can take a very long time, so you may need to start searching more quickly than you think.

If you don't want to buy a property to live in, then you have lots of other options but again there are many variables. You may need to put a lot into your pension, especially if you will be renting through retirement because not buying a home. If your pension is v healthy or you want to use the money before you are 58 (the age you can draw down from private personal pensions), then you can look at other investments. Etc.

Top up your LISA, both use your isa allowance. Don’t buy and rmet outa. Flat. How long is your lease for ?

How long is your rental term for?