60k to invest , options ?

[dugless]

Due to recent good fortune we have 60k to invest.. what would you do ?

Im thinking..

4 flats , 12-15k each deposit buy to let , 60k each flat - 240k total,60k deposit,4x45k mortgage

45k mortgage - 4 x £270 per month for 20 yrs.

grand income 4 x £500 per month 2k ( easily achievable in this area ! )

2k in , £1080 total mortgage + say £420 to cover insurance & mishaps & cover non tenant payments.

Leaves £500 per month profit & the capital from the flats.

Irrespective of you thinking these sums add up or not they are rough , does this sound reasonable or what would you do ?

Or joint jobs are roughly 50k per yr which doesnt really come into buy to let equation ..

professional advice needed cheers

FYI flats here are available from 45k upwards,and even dhss rental is £430 minimum for 2 beds..

[996c2]

dugless said:

4 flats , 12-15k each deposit buy to let , 60k each flat - 240k total,60k deposit,4x45k mortgage

You need at least 25% deposit for a BTL Mortgage so I think if you put out about 20k to buy each flat you'll be OK. The BTL mortgage fees and conveyacing fees will cost you a 1k or so.

dugless said:

grand income 4 x £500 per month 2k ( easily achievable in this area ! )

If you can get £6k a year on a £60k flat (i.e. 10% return) you are doing very well so I would say go for it!

dugless said:

2k in , £1080 total mortgage + say £420 to cover insurance & mishaps & cover non tenant payments.

Leaves £500 per month profit & the capital from the flats.

Sounds reasonable but I would not spend the £500/month profit. Instead leave it aside for a rainy day. Don't forget about service charges for flats.

If you are new to this, I would buy 1 flat and try it for 6-12 months before getting more. Buying 3-4 at once might be too much of a risk at this stage.

Good luck!

Edited by 996c2 on Monday 6th September 13:34

[Soovy]

dugless said:

Due to recent good fortune we have 60k to invest.. what would you do ?

Im thinking..

4 flats , 12-15k each deposit buy to let , 60k each flat - 240k total,60k deposit,4x45k mortgage

45k mortgage - 4 x £270 per month for 20 yrs.

grand income 4 x £500 per month 2k ( easily achievable in this area ! )

2k in , £1080 total mortgage + say £420 to cover insurance & mishaps & cover non tenant payments.

Leaves £500 per month profit & the capital from the flats.

Irrespective of you thinking these sums add up or not they are rough , does this sound reasonable or what would you do ?

Or joint jobs are roughly 50k per yr which doesnt really come into buy to let equation ..

professional advice needed cheers

FYI flats here are available from 45k upwards,and even dhss rental is £430 minimum for 2 beds..

No chance.

You need 25% deposit, and what about tax?

[Beardy10]

Can you cover the mortgage payments out of your earnings during void periods ?

That is your biggest risk...well that and the value of the property going down. The yields you are talking about suggest there is little chance of capital appreciation ?

[Frankeh]

60K flats.

Lets say you put down a 33% (£20K) deposit so you can get some nice rates of around 5-6%.

3 * 40K mortgages @ £180 odd a month.

So £540 on servicing your debt leaving £960 a month profit if you're letting them for £500pcm.

Then there's tax and st.
I'd say you'd be a fool to spend the £960 each month. Use it to reduce the mortgages, although I have been told this is a tax nightmare and might not even be possible.

Other members might have the answer to that.

At least keep 5K in a bank account for repairs or the unexpected.

[dugless]

996c2 said:

dugless said:

4 flats , 12-15k each deposit buy to let , 60k each flat - 240k total,60k deposit,4x45k mortgage

You need at least 25% deposit for a BTL Mortgage so I think if you put out about 20k to buy each flat you'll be OK. The BTL mortgage fees and conveyacing fees will cost you a 1k or so.

dugless said:

grand income 4 x £500 per month 2k ( easily achievable in this area ! )

If you can get £6k a year on a £60k flat (i.e. 10% return) you are doing very well so I would say go for it!

dugless said:

2k in , £1080 total mortgage + say £420 to cover insurance & mishaps & cover non tenant payments.

Leaves £500 per month profit & the capital from the flats.

Sounds reasonable but I would not spend the £500/month profit. Instead leave it aside for a rainy day. Do forget about service charges for flats.

If you are new to this, I would buy 1 flat and try it for 6-12 months before getting more. Buying 3-4 at once might be too much of a risk at this stage.

Good luck!

Thanks for info there.. 25% of each of the 60k is 15k deposit = possibly 4 flats if all flats are 60k,I intend on the flats not all being 60k though , maybe 1 or even 2 45k-50k.

The £500 ( very rough ) profit would be put away or into one of the motgages as over payments,we have 5k personal savings for a rainy day.. just hope there is no thunder storm

When you say service charges on the flats do you mean getting electric & gas checked etc ?

Are there any other costs you could imagine.. buildings insurance / tax (grr) / the odd shower or cooker going etc / mortgage payments ..

I intend to manage them myself as I have the spare time to do it.

Is a business account necessary ?

[Soovy]

dugless said:

996c2 said:

dugless said:

4 flats , 12-15k each deposit buy to let , 60k each flat - 240k total,60k deposit,4x45k mortgage

You need at least 25% deposit for a BTL Mortgage so I think if you put out about 20k to buy each flat you'll be OK. The BTL mortgage fees and conveyacing fees will cost you a 1k or so.

dugless said:

grand income 4 x £500 per month 2k ( easily achievable in this area ! )

If you can get £6k a year on a £60k flat (i.e. 10% return) you are doing very well so I would say go for it!

dugless said:

2k in , £1080 total mortgage + say £420 to cover insurance & mishaps & cover non tenant payments.

Leaves £500 per month profit & the capital from the flats.

Sounds reasonable but I would not spend the £500/month profit. Instead leave it aside for a rainy day. Do forget about service charges for flats.

If you are new to this, I would buy 1 flat and try it for 6-12 months before getting more. Buying 3-4 at once might be too much of a risk at this stage.

Good luck!

Thanks for info there.. 25% of each of the 60k is 15k deposit = possibly 4 flats if all flats are 60k,I intend on the flats not all being 60k though , maybe 1 or even 2 45k-50k.

The £500 ( very rough ) profit would be put away or into one of the motgages as over payments,we have 5k personal savings for a rainy day.. just hope there is no thunder storm

When you say service charges on the flats do you mean getting electric & gas checked etc ?

Are there any other costs you could imagine.. buildings insurance / tax (grr) / the odd shower or cooker going etc / mortgage payments ..

I intend to manage them myself as I have the spare time to do it.

Is a business account necessary ?

I don't want to be rude, mate, but given this answer I suggest you put it into the bank and leave it there.

You have to pay tax on the profits, you will have costs such as furninshing, service charges, repairs, legal fees.

Do yourself a favour.

[dugless]

Soovy said:

dugless said:

Due to recent good fortune we have 60k to invest.. what would you do ?

Im thinking..

4 flats , 12-15k each deposit buy to let , 60k each flat - 240k total,60k deposit,4x45k mortgage

45k mortgage - 4 x £270 per month for 20 yrs.

grand income 4 x £500 per month 2k ( easily achievable in this area ! )

2k in , £1080 total mortgage + say £420 to cover insurance & mishaps & cover non tenant payments.

Leaves £500 per month profit & the capital from the flats.

Irrespective of you thinking these sums add up or not they are rough , does this sound reasonable or what would you do ?

Or joint jobs are roughly 50k per yr which doesnt really come into buy to let equation ..

professional advice needed cheers

FYI flats here are available from 45k upwards,and even dhss rental is £430 minimum for 2 beds..

No chance.

You need 25% deposit, and what about tax?

Hi Soovy , I have seen the mortgage advisor about rates etc..

I know its 25% for a buy to let.. 25% deposit of a 60k ( max ) flat is 15k (max ) deposit..

I mentioned 12k-15k for a deposit as one of the flats I have my eye on is a 45k 2 bed flat( only 12k deposit = 25% )

The sums are hypothetical right now.. I was just after a general consensus what anyone here would do with an investment with 60k..


Buying cheap flats with good rental income seems logical to me, kind of looking to be proved wrong to affirm I'm not being naive or stupid

£500 income per month each flat with £300 ish mortgage,worst case scenario I can more than afford the combined mortgage of circa £160,000 , and I still have £60k equity that can only grow between repayments and inflation - he says with a smile !

On top of the rental income which looks reasonable,its the long term capital growth thats appealing to me..

To maximise my short term investment an interest free mortgage would be much better ?..£500 income £120 mortgage..

After paying tax I know im not going to get rich quick..although it seems a small viable income,its the long term capital investment i'm after.

What would you do ? I'm asking here as a noob at investment so any info is appreciated.

[Soovy]

dugless said:

Soovy said:

dugless said:

Due to recent good fortune we have 60k to invest.. what would you do ?

Im thinking..

4 flats , 12-15k each deposit buy to let , 60k each flat - 240k total,60k deposit,4x45k mortgage

45k mortgage - 4 x £270 per month for 20 yrs.

grand income 4 x £500 per month 2k ( easily achievable in this area ! )

2k in , £1080 total mortgage + say £420 to cover insurance & mishaps & cover non tenant payments.

Leaves £500 per month profit & the capital from the flats.

Irrespective of you thinking these sums add up or not they are rough , does this sound reasonable or what would you do ?

Or joint jobs are roughly 50k per yr which doesnt really come into buy to let equation ..

professional advice needed cheers

FYI flats here are available from 45k upwards,and even dhss rental is £430 minimum for 2 beds..

No chance.

You need 25% deposit, and what about tax?

Hi Soovy , I have seen the mortgage advisor about rates etc..

I know its 25% for a buy to let.. 25% deposit of a 60k ( max ) flat is 15k (max ) deposit..

I mentioned 12k-15k for a deposit as one of the flats I have my eye on is a 45k 2 bed flat( only 12k deposit = 25% )

The sums are hypothetical right now.. I was just after a general consensus what anyone here would do with an investment with 60k..


Buying cheap flats with good rental income seems logical to me, kind of looking to be proved wrong to affirm I'm not being naive or stupid

£500 income per month each flat with £300 ish mortgage,worst case scenario I can more than afford the combined mortgage of circa £160,000 , and I still have £60k equity that can only grow between repayments and inflation - he says with a smile !

On top of the rental income which looks reasonable,its the long term capital growth thats appealing to me..

To maximise my short term investment an interest free mortgage would be much better ?..£500 income £120 mortgage..

After paying tax I know im not going to get rich quick..although it seems a small viable income,its the long term capital investment i'm after.

What would you do ? I'm asking here as a noob at investment so any info is appreciated.

I'd get myself a good stockbroker, and tell them to invest it for me on a managed basis with a low to medium risk profile.

[was8v]

Where in the country do you buy a flat for £60k that will rent for £500pcm?


Don't forget service charges as above and maintenance / furnishing costs.

[Soovy]

musclecarmad said:

fk me, you have £60,000 in cash (a nice position) and presumably a worry free life.

so, rather than save it, invest in a fund, invest in a classic car or pay off other debts you are thinking of leveraging yourself off your ball bag to buy some st properties.

Eloquently put.

To the OP, put it in a safe investment and enjoy the fact you have no worries for the foreseeable future. I assume you've paid the tax due on your windfall?

Edited by Soovy on Monday 6th September 15:08

[Soovy]

musclecarmad said:

dugless said:

996c2 said:

dugless said:

4 flats , 12-15k each deposit buy to let , 60k each flat - 240k total,60k deposit,4x45k mortgage

You need at least 25% deposit for a BTL Mortgage so I think if you put out about 20k to buy each flat you'll be OK. The BTL mortgage fees and conveyacing fees will cost you a 1k or so.

dugless said:

grand income 4 x £500 per month 2k ( easily achievable in this area ! )

If you can get £6k a year on a £60k flat (i.e. 10% return) you are doing very well so I would say go for it!

dugless said:

2k in , £1080 total mortgage + say £420 to cover insurance & mishaps & cover non tenant payments.

Leaves £500 per month profit & the capital from the flats.

Sounds reasonable but I would not spend the £500/month profit. Instead leave it aside for a rainy day. Do forget about service charges for flats.

If you are new to this, I would buy 1 flat and try it for 6-12 months before getting more. Buying 3-4 at once might be too much of a risk at this stage.

Good luck!

Thanks for info there.. 25% of each of the 60k is 15k deposit = possibly 4 flats if all flats are 60k,I intend on the flats not all being 60k though , maybe 1 or even 2 45k-50k.

The £500 ( very rough ) profit would be put away or into one of the motgages as over payments,we have 5k personal savings for a rainy day.. just hope there is no thunder storm

When you say service charges on the flats do you mean getting electric & gas checked etc ?

Are there any other costs you could imagine.. buildings insurance / tax (grr) / the odd shower or cooker going etc / mortgage payments ..

I intend to manage them myself as I have the spare time to do it.

Is a business account necessary ?

what about income tax dugless - this is a killer
what about the government deposit scheme which will highlight you if not you will be fined
service charge - as if i have to tell you - the flats will be leasehold so you will have to pay a service charge, then you will have to pay ground rent, then corgi registered people need to check stuff, then you have to ensure you have landlords insurance and so on.
manage them yourself then - but say GOODBYE to weekends, show people around that don't turn up, verifying references, managing your tax, how do you collect rent if they don't have the money - then who pays the mortgage? YOU.

you really haven't given this any thought.

I personally think out of that lot you'd be very lucky to make a net profit out of the rental income so you are relying on capital growth, but i think you will make a capital loss.

£5k personal savings is a mere pittance when renting out property, what if you are sued, what if all your tenants don't pay (not out of the question), what if your BTL lender makes a margin call etc etc

He doesn't even know what a margin call is, mate.


Look OP, find a decent ISA savings account, and shove it in that. You'll thank me.

[996c2]

dugless said:

Is a business account necessary ?

No, just get the tenants to transfer the money to your current account direct. You can set up a new current account for this if it makes managing your money easier.

musclecarmad said:

what about income tax dugless - this is a killer

Income and capital gain tax is only due on profits. If you make no profits, you don't pay tax! You'll need to declare your rental income on a self assessment tax form yearly. You can deduct your mortgage interest, 10% (of the annual rent) wear and tear cost, estate agent fee, service charge e.t.c.

musclecarmad said:

what about the government deposit scheme which will highlight you if not you will be fined

...manage them yourself then - but say GOODBYE to weekends, show people around that don't turn up, verifying references, managing your tax, how do you collect rent if they don't have the money - then who pays the mortgage? YOU.

If you want to manage it yourself, make sure you know what you are doing otherwise the tenants can take you for a ride. Until you're more experienced, I would advise paying the estate agent to at least
1.find the tenants
2.get references
3.draw up the AST contract
4.hold on to the deposit (they'll then be responsible for the deposit scheme)

Make sure you know law and do everything by the book. If you ever have to take your tenants to court, you're already in a very bad place - don't make it worse by not knowing the law and being on the wrong side of it.

musclecarmad said:

service charge - as if i have to tell you - the flats will be leasehold so you will have to pay a service charge, then you will have to pay ground rent

The service charge is there to pay for the common areas of the building e.g. the roof, hallway, stairs, building refurbishment and so on. This can be quite a significant annual sum so do your homework first!

BTL is not difficult, it is risky, it doesn't make money quick (unless property market is rising very quickly, not likely at the moment) and it can involve a lot of work so don't go into it thinking it is easy money...

[Deva Link]

musclecarmad said:

1. you will get tenants that are scum of the earth
2. you will be drawn down to their level
3. weekends will be spent repairing broken windows/floors etc
4. you will forever be chasing non paid rent and using the services of a debt collector
5. you will have a lot of stress
6. management companies, solicitors, income tax, accountants, tax returns, blah blah blah all take it out of you.

Funnily enough I was talking to someone last week who used redundancy money to buy 4 cheap flats a few years ago and they bitterly regret it. They certainly mentioned 1, 3, 4 & 5 from that list.

I, too, am wondering if you can really rent a £60K flat for £500/mth. There's not much margin for error in the OPs calcs. Never mind voids and the costs he hasn't thought of, if the rents turn out to be £400/mth then he's stuffed.

[DS3R]

musclecarmad said:

you really haven't given this any thought.

Nail/ head.

OP has mentioned the desirability of capital gain as well as income- but a capital gain is only crystalised on sale, and how many sales are there right now?

Even with piddly mortgages, several months of emptiness while a property is on the market can eat in to any margin, combined with the cost of sale, and requirement to pay service charges irrespective of occupancy.

[Phooey]

Commercial property? A 2500 sq ft warehouse should be easily obtainable with a £60k deposit shirley. This is where i would rather be than running around maintaining 4 flats - replacing kitchens/windows e.t.c.

[Frankeh]

Not all tenants are fkwitts.
I think it's the landlords that are the tts most of the time.

I've paid my rent on time every month since I've started renting and I've never asked a single thing from my landlord.

This doesn't stop the landlord deducting money for wear and tear whenever I move out.
It's outrageous.

I give them, what? 6K+ of my hard earned money and they still try and fk me for the sake of an extra £150.

It's a 2 way street.

[DonkeyApple]

Soovy said:

dugless said:

Soovy said:

dugless said:

Due to recent good fortune we have 60k to invest.. what would you do ?

Im thinking..

4 flats , 12-15k each deposit buy to let , 60k each flat - 240k total,60k deposit,4x45k mortgage

45k mortgage - 4 x £270 per month for 20 yrs.

grand income 4 x £500 per month 2k ( easily achievable in this area ! )

2k in , £1080 total mortgage + say £420 to cover insurance & mishaps & cover non tenant payments.

Leaves £500 per month profit & the capital from the flats.

Irrespective of you thinking these sums add up or not they are rough , does this sound reasonable or what would you do ?

Or joint jobs are roughly 50k per yr which doesnt really come into buy to let equation ..

professional advice needed cheers

FYI flats here are available from 45k upwards,and even dhss rental is £430 minimum for 2 beds..

No chance.

You need 25% deposit, and what about tax?

Hi Soovy , I have seen the mortgage advisor about rates etc..

I know its 25% for a buy to let.. 25% deposit of a 60k ( max ) flat is 15k (max ) deposit..

I mentioned 12k-15k for a deposit as one of the flats I have my eye on is a 45k 2 bed flat( only 12k deposit = 25% )

The sums are hypothetical right now.. I was just after a general consensus what anyone here would do with an investment with 60k..


Buying cheap flats with good rental income seems logical to me, kind of looking to be proved wrong to affirm I'm not being naive or stupid

£500 income per month each flat with £300 ish mortgage,worst case scenario I can more than afford the combined mortgage of circa £160,000 , and I still have £60k equity that can only grow between repayments and inflation - he says with a smile !

On top of the rental income which looks reasonable,its the long term capital growth thats appealing to me..

To maximise my short term investment an interest free mortgage would be much better ?..£500 income £120 mortgage..

After paying tax I know im not going to get rich quick..although it seems a small viable income,its the long term capital investment i'm after.

What would you do ? I'm asking here as a noob at investment so any info is appreciated.

I'd get myself a good stockbroker, and tell them to invest it for me on a managed basis with a low to medium risk profile.

You'd have spent that £60k long before you found a 'good' stockbroker.

Personally, I would favour buying out a struggling local business if you can find one which you know is poorly managed and the owner in debt and being squeezed out.

In the current market £20-£30k could actually get you something rather good.

I certainly wouldn't look to invest the whole £60k in the present market, depending on how much cash you already have alongside it.

Simply buying into the FTSE iShare on a monthly basis will probably give you the same return as an average IFA or modest broker and without all the associated comms.

Property is at that point where it's almost certain to go down as opposed to racing up to offer good capital returns.

sthouse properties offer higher yields but that's because you are taking on the increased risk of sthouse tennants.

I'd rather buy one very nice property in the perfect location, again retaining half the cash to handle any problems. Having said that I am of the camp that would not be increasing property exposure for the next couple of years.

It does depend what you want to do, invest in the markets, property or a business?

[audidoody]

If you need to ask what service charges are for I respectfully suggest you should steer clear of the BTL market and put your £60,000 into Govt bonds.

[audidoody]

If you need to ask what service charges are for I respectfully suggest you should steer clear of the BTL market and put your £60,000 into Govt bonds.