14:19 PM, 8th September 2014, About 7 years ago 9
We live overseas and will return to the UK on retirement in 2018.
We are cash buyers about £500k, but not yet ready to invest in our retirement home – we’ve only narrowed the area down to the SE
We are looking for an investment to park funds allocated for the 2018 house purchase. We would sell the BTL to fund the retirement home in 2018.
I thought that a BTL would be a good option since the value would obviously track house prices, so even if they go down, so would the price of our intended retirement home. However if we don’t get on the ladder and house prices are up 30% as some are predicting we would be in trouble.
We really want to be completely hands-off, we are very adverse to hassle and stress so would pay an agent to take care of everything
My rough conservative calculation would be 4% of the value as rental income, 20% of which would go in taxes, 20% to the agent and 10% in repairs and misc fees. Leaving us with a 2% yield plus capital appreciation. Does this sound reasonable?
It sounds like a lot of hassle (with is not being in the UK) but the range of alternative investments is so slim – we can net 2-3% on bonds, but that’s no help if house prices keep on increasing albeit at a slower pace as interest rates rise, whenever that may be.
Any advice would be much appreciated.
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