Newbies given 200K - What to do next?

[Matt Bourke 0]

Hi everyone,

 

Thanks for all your advice in the forums - we are a young couple who are looking at investing for the first time.

 

We have a scenario where we would like to see what you would do if you were in our shoes. We would appreciate your sage advice - no matter how harsh it is!

 

Here is the situation:

 

We 'own' a leasehold property in London (South Norwood SE25 / rentable income estimated @ 1000/1100 PCM). We were lucky enough to have my parents give us £200k in order to do this on the proviso that we give them £700 (fixed) back in 'repayments' per month for 20 years. 

 

We have hopes to move to Manchester in the next few years. We would like to plant roots there. Utmost, we would like the opportunity our parents have given us (i.e. no bank attachments) to work in our favour as our retirement pot somehow.

 

So here are our questions (gleaned from everything we have taken from the forum and podcasts):

 

1. Do you save for a deposit and buy to let in London (holding on to current property as well)?

2. Do you save for a deposit and buy to let In cheaper Manchester? (holding on to current property as well)?

3. Would you ever sell the London property, get a mortgage and buy two properties in cheaper Manchester?

4. Buy land in Manchester with a mortgage (now) / stay in London earning high wage for 5 years / build a new house in Manchester with London sale. 

 

NB. Buy to sell would make our lifestyle very difficult but is still an option. 

 

We are sure that we are missing angles here where you guys would make this equity work harder for you - (we don't want to risk our parents money however!)...Any and all input is extremely welcome. 

 

M and A

[Jason McClean 65]

Hi Matt

 

I'd keep the property you've got if it is an easy rental and low maintenance. It is netting £400PCM and as London based the capital appreciation should be strong.

 

I'd then save for another property wherever you can afford it anywhere in the UK. Providing the numbers stack up, they can work. Ideally you want to be near the property, so if you move to Manchester, the property prices are lower than London, so you can save up and buy sooner.

 

I wouldn't sell London though. If it's working, then don't fix it...

[Matt Bourke 0]

Thanks for the reply Jason, much appreciated!

 

As far as our property being "low maintenance"...well this raises a good question as to what context to take into consideration.  I will explain more and move my question into a new thread called "Freeholder where are you?". Be good to see if you have any advice.

[Jason McClean 65]

Hi Matt

 

I've read the other post, sounds problematical. I have a rule of avoiding leasehold properties for just such reasons. I've never experienced them myself as I have never bought leasehold but no doubt they can be more difficult to manage as you don't actually own it, the freeholder has a say.

 

Life and being a landlord are hard enough without making them harder is my motto...