Can I make £1000 a month from £550k?
Can I make £1000 a month from £550k?
Author
Discussion

counterofbeans

Original Poster:

1,092 posts

169 months

Tuesday 16th April 2013
quotequote all
The wife and I have (slightly unexpectedly) sold our house. It should all go through fairly quickly and I don't think we're going to have time to find and buy the "right" property where we would like to move to.

So I think we'll be renting for a while, maybe 6 months, maybe a year.

Decent rental properties round here are going to be over £1k a month, so I'd like to make at least that amount net on the cash proceeds of the house.

Is this possible short term, given the awful savings rates available at the moment? I'm looking for about 2.2% or better after basic rate tax deduction.

Any pointers?

CofB

Lefty

21,479 posts

232 months

Tuesday 16th April 2013
quotequote all
Yes, easily.

We have 2 flats worth maybe £350k in total which rent out for a total of £1800 PCM. After fees and tax you should be closer to 1500-2000pcm for your 550k capital!

Sarnie

8,373 posts

239 months

Tuesday 16th April 2013
quotequote all
Lefty said:
Yes, easily.

We have 2 flats worth maybe £350k in total which rent out for a total of £1800 PCM. After fees and tax you should be closer to 1500-2000pcm for your 550k capital!
I don't think thats what he's asking............

fandango_c

1,993 posts

216 months

Tuesday 16th April 2013
quotequote all
Lefty said:
Yes, easily.

We have 2 flats worth maybe £350k in total which rent out for a total of £1800 PCM. After fees and tax you should be closer to 1500-2000pcm for your 550k capital!
Which isn't particularly useful if you wish to use the 550k to buy a house to live in after 6 months or a year.

http://www.money.co.uk/savings-accounts/instant-ac...

counterofbeans

Original Poster:

1,092 posts

169 months

Tuesday 16th April 2013
quotequote all
Sarnie said:
I don't think thats what he's asking............
Quite....short term investment only!

CofB

DocJock

8,722 posts

270 months

Tuesday 16th April 2013
quotequote all
NS&I Direct Saver

3% gross, £2M limit, 100% of your deposit protected.

Lefty

21,479 posts

232 months

Tuesday 16th April 2013
quotequote all
Sorry, I totally misunderstood the op.

As you were.

getmecoat

Newc

2,195 posts

212 months

Tuesday 16th April 2013
quotequote all
counterofbeans said:
Is this possible short term, given the awful savings rates available at the moment? I'm looking for about 2.2% or better after basic rate tax deduction.
I don't think there are any cash products available that will give you this. Best rates are around 2%-2.1% pre-tax. If you want a higher yield you will have to take capital risk.

counterofbeans

Original Poster:

1,092 posts

169 months

Tuesday 16th April 2013
quotequote all
DocJock said:
NS&I Direct Saver

3% gross, £2M limit, 100% of your deposit protected.
Um, only 1.5% gross?

http://www.nsandi.com/savings-direct-saver

counterofbeans

Original Poster:

1,092 posts

169 months

Tuesday 16th April 2013
quotequote all
Newc said:
I don't think there are any cash products available that will give you this. Best rates are around 2%-2.1% pre-tax. If you want a higher yield you will have to take capital risk.
That's what I was afraid of...

DocJock

8,722 posts

270 months

Tuesday 16th April 2013
quotequote all
counterofbeans said:
DocJock said:
NS&I Direct Saver

3% gross, £2M limit, 100% of your deposit protected.
Um, only 1.5% gross?

http://www.nsandi.com/savings-direct-saver
Oops, my apologies. Shows how long it is since I checked ours :blush:

audidoody

8,598 posts

286 months

Tuesday 16th April 2013
quotequote all
Buy gold .....

counterofbeans

Original Poster:

1,092 posts

169 months

Tuesday 16th April 2013
quotequote all
audidoody said:
Buy gold .....
I wouldn't want to bet my house on it

RSoovy4

35,829 posts

301 months

Tuesday 16th April 2013
quotequote all
audidoody said:
Buy gold .....
You do know it's in a massive bear market at the moment?

You need something with zero downside risk.

DoubleSix

12,568 posts

206 months

Tuesday 16th April 2013
quotequote all
You'll struggle to acheive better with zero downside thats for sure.

But a highly diversified corporate bond ETF or minimum volatility ETF paying quarterly may give you a good balance of liquidity/return/risk. Easy to acheive 4-6% with such instruments.

RSoovy4

35,829 posts

301 months

Tuesday 16th April 2013
quotequote all
You might be able to get a good return if you tie the money up for twelve months, but if you want to use the interest to pay rent then that's a non-starter.


counterofbeans

Original Poster:

1,092 posts

169 months

Tuesday 16th April 2013
quotequote all
RSoovy4 said:
You might be able to get a good return if you tie the money up for twelve months, but if you want to use the interest to pay rent then that's a non-starter.
I don't actually need the interest to pay the rent - I can do that out of my salary - but I will need access to the capital the instant the right property comes along.

CofB

Grandfondo

12,241 posts

236 months

Tuesday 16th April 2013
quotequote all
Bank of Scotland Internet instant 2.8%.

counterofbeans

Original Poster:

1,092 posts

169 months

Tuesday 16th April 2013
quotequote all
Grandfondo said:
Bank of Scotland Internet instant 2.8%.
Hmmm, currently 1.55% only

http://www.bankofscotland.co.uk/savings/accounts/i...

Deva Link

26,934 posts

275 months

Tuesday 16th April 2013
quotequote all
fandango_c said:
Lefty said:
Yes, easily.

We have 2 flats worth maybe £350k in total which rent out for a total of £1800 PCM. After fees and tax you should be closer to 1500-2000pcm for your 550k capital!
Which isn't particularly useful if you wish to use the 550k to buy a house to live in after 6 months or a year.
Isn't that the PistonHeader's way though?

Based on the above, use the money to buy 4 flats. Income £3600/mth. Carry on renting a place for yourself for £1000/mth (once you get up to a certain level renting seems to be cheaper than buying) and you've got £2600/mth spare. Retire!