Holiday flat or move somewhere flashier?

[Alongtimelonely]

I came into some money and I’m left with £300k not sure what to do with it - can you help me with imagining how to spend/invest it? Properly related ideas please!

For context Dh and I are mid 40s, live in SE England, stable careers and plenty of disposable income, pensions are fine.

£50k will pay off our existing mortgage leaving us with £250k.

We love our slightly shabby “forever home” .and realistically we could easily burn £100k+ on various upgrades - major job is new kitchen (£50k), bathroom improvements (£10k), downstairs floor (£5k) replace drafty front door (£1k) and new patio (£15k?) and driveway (£20k?).

That would leave us with £150k and no idea how to spend it. Don’t just want to sink it in pensions.

One option is to invest in a second home at the seaside with a mortgage - we love the south coast and with our own flat we could base ourselves there in the summer as we wfh. Friends and family could use it too. Or Airbnb or sometimes? But morally - I’m a little bit unhappy with the idea of a second home which could house a family if we were not buying it. On the other hand I absolutely LOVE the idea of being able to vacation at the drop of a hat and not burn carbon travelling unnecessarily overseas. DH and kids really like the idea and have no qualms about it. Is it a good plan? What’s it like owning a second home these days?

A completely option is to go all-out and move to town centre with a huge flashy house and garden. For that, we would need to spend about £1.3m whereas current house will only sell for £750k. It is very reachable - but is it wise to extend our mortgage? We are entering second half of our lives, so there will be cancer and stress and aging PIL to deal with. Plus I do love our current home so very much and I’m not a flashy person so it all just seems a bit pointless.

What do I do with this money, wise mumsnetters? Other ideas?!

Lovely to come into some money. Both great ideas!

I am generally of the opinion to spend the money on the house you currently own, then every day is a bit of luxury.

I would question how far £250k goes in coastal towns. Family own a flat in SW in a coastal area and the neighbouring property sold for £400k for a 2 bed (in terms of location it’s probably “middle of the road”, not super flashy but not the cheapest). Many properties in coastal areas also have covenants on them that they can’t be used for letting or Airbnb (my family members flat for example) but if you could you’d have to pay someone to clean it unless you live close. You still have costs like council tax, service charge etc. Also don’t forget the extra stamp duty for second homes.

The alternative is to look at long term rental as an investment to provide additional income but again you have stamp duty to consider and yields are not what they were in the nineties/noughties. Many of BTL sector are selling up due to increased costs. You have to keep money back for repairs etc.

Sorry, I just reread your post about getting a mortgage on a second home. I had missed that bit. If you’re entering the second part of your life do you want to be taking on debt?

I'd pay off the mortgage and do the house repairs so it's a lovely forever home.

I wouldn't take on an extra mortgage. Air bnb is being cracked down on in a lot of places so would be wary of that too.

If it was me I'd buy a camper van, that's my dream but appreciate its not for everyone!

Make your home beautiful.

Please not a short term let. They are ruining this country.

I think your advice is sensible. Another mortgage seems risky. I hadn’t even thought about covenants and restrictions on letting.

Camper van is an idea! Some friends bought one for their retirement. It does tick a lot of boxes although we might need that flashy new house to find a driveway big enough for it 😂

I do think improving our forever home feels like the best place to start. I feel like my late mum would smile at that idea. Every day I think “I don’t want to spend this money, I want my mum back instead.” But I can’t ignore the facts - she has gone, and I have this money instead. I need to do something sensible with it.

Thanks again for the advice.