Decent cheap areas to buy property as fail safe before living on a boat

[Jess--]

2 hours ago, rusty69 said:

Woohoo! That much eh! 

any money that we have that isn't going to be needed before the end of the month after next we dump into premium bonds between the pair of us we have a little over 70k in there.

over 6 months this earns us 3-500 which is a lot better than we could get with a savings account that gave us instant (or near instant) access

[Lily Rose]

1 minute ago, Athy said:

That's unduly dismissive. Given the choice between having £25 and not having £25, which would you go for?

That said, I have a few thousand invested in Ernie Bonds and over the last five years they have yielded only about 2% on average. But, that's better than most savings accounts currently offered by banks and BS.

You've been lucky to get 2%. Or the 5 year period reflects better returns than are on offer now. Perhaps a bit of both. The MSE article says the prize fund now represents an underlying rate of 1.4%

As this includes the big prizes the effective rate for people with average luck is therefore less than 1.4%

I used to hold £10k which, at the time, was said to result in a small prize almost every month. Which it did.

Later, when rates fell, I removed £9k. The remaining £1k probably averages one win about every 2 or 3 years. If rates had not fallen it should have been about once a year on average.

[canalboat]

6 minutes ago, Jess-- said:

any money that we have that isn't going to be needed before the end of the month after next we dump into premium bonds between the pair of us we have a little over 70k in there.

over 6 months this earns us 3-500 which is a lot better than we could get with a savings account that gave us instant (or near instant) access

Precisely.  Same experience with us. But you need to have at least 40k in the Bonds to cut down the percentages and get a regular worthwhile income, certainly keeping up with house prices, which is why we do it why living on a boat.  That is why I suggested it to the OP - so thanks Jess for backing up the idea. 

[Athy]

15 minutes ago, Lily Rose said:

You've been lucky to get 2%. 

I think that being lucky is the point of Premium Bonds!

I generally seem to get a £25 prize every few months, but last year I had a £100 win which boosted the average percentage.

It does baffle me why a country which already has Premium Bonds also needs a National Lottery, in which punters' stake money is lost each month (or is it week?) if they don't win anything.

Though he expressed reservation sabout doing so, I would recommend that Thomas at least consider buying a property and renting it out, as the financial returns can be quite pleasing Of course, he would not receive as much rent for a property in North Yorkshire as for one in South London, but houses and flats are very affordable up North, as long as you avoid Cheshire.

Edited April 19, 2018 by Athy

[Lily Rose]

19 minutes ago, Athy said:

I think that being lucky is the point of Premium Bonds!

I generally seem to get a £25 prize every few months, but last year I had a £100 win which boosted the average percentage.

It does baffle me why a country which already has Premium Bonds also needs a National Lottery, in which punters' stake money is lost each month (or is it week?) if they don't win anything.

Luck is indeed the point. It's why I keep a nominal amount in the faint hope of hitting the jackpot. But I don't do the lottery as that is also pure luck but with instant loss of the stake money.

My money is spread across a range of tax-free cash and UK and global shares ISAs. The cash accounts do earn more than the 1.4% I could reasonably expect from premium bonds, the shares produce about 2.5% a year in dividends and, so far, have done extremely well in growing the capital though I'm well aware that they can go down (not for long usually) as well as up.

The reasonable expectation of 1.4% from premium bonds does not keep up with inflation. For that you need better than average luck, something I'd prefer not to rely on with more than the nominal amount I hold in order to have a (tiny) chance of a big win.

I aim to spread my eggs across many baskets.

 

 

Edited April 19, 2018 by Lily Rose
Added a bit

[rusty69]

34 minutes ago, Athy said:

That's unduly dismissive. Given the choice between having £25 and not having £25, which would you go for?

That said, I have a few thousand invested in Ernie Bonds and over the last five years they have yielded only about 2% on average. But, that's better than most savings accounts currently offered by banks and BS.

I would go for the certainty of a bank account. Stocks and shares, if my time frame was long enough, but clearly not for everyone 

[Jess--]

premium bonds are ideal for money that you don't need right now (and probably won't need for the next couple of months) but may need at short notice.

in my case we have around 15k in personal accounts or cash that can be got instantly, another 30k in various company accounts that could also be got instantly (but would upset the accountant) and then the 70k in premium bonds, meaning that we can raise (if needed) 45k within 12 hours or 115k  within 72 hours, anything bigger would take 14 or 28 days depending on which investments we pulled cash from.

 

[Hudds Lad]

13 hours ago, Richard10002 said:

Beware of student rentals, particularly if you arent nearby... you could end up refurbishing on a regular basis. Returns may be good, but expenditure could be relatively high.

^ this

we remortgaged our first house to buy the one we're in now and kept it as a rental, paying a percentage to a well-established & large estate agent to manage everything apart from repairs.
rental agreement stipulated garden to be maintained, no smoking and no pets (wife is allergic to cat hair).

in the few years we let it out, we had;
a professional couple (garden left to go to seed, carpets never vacc'd, walls dented, kitchen damaged and generally grubby)
a young family (garden barely looked after apart from where they fitted a rotary clothes airer, too lazy to take the bins out they used the cellar as a rubbish dump which took 3 skips to clear of nappies food waste etc.)
3 sharing students (pretty much trashed it, kept pets when none were allowed (cat shit everywhere), left lots of junk furniture and non-working appliances, and skipped town owing two months rent, house had to be gutted and re-furbed)
2 University lecturers (pain in the arse would ring up to get lightbulbs changed, ruined bathroom and kitchen ceiling when a leak developed and they waited a week to inform whilst still showering up to 3 times a day, burnt kitchen worktop)

the last tenants were the straw that broke the camels back, we re-furbed it again and put it on the market. whilst we did end up making about £40k after the mortgage was repaid, the stress and hassle just wasn't worth it. we will never be landlords again.

[Tim Lewis]

12 minutes ago, Hudds Lad said:

^ this

we remortgaged our first house to buy the one we're in now and kept it as a rental, paying a percentage to a well-established & large estate agent to manage everything apart from repairs.
rental agreement stipulated garden to be maintained, no smoking and no pets (wife is allergic to cat hair).

in the few years we let it out, we had;
a professional couple (garden left to go to seed, carpets never vacc'd, walls dented, kitchen damaged and generally grubby)
a young family (garden barely looked after apart from where they fitted a rotary clothes airer, too lazy to take the bins out they used the cellar as a rubbish dump which took 3 skips to clear of nappies food waste etc.)
3 sharing students (pretty much trashed it, kept pets when none were allowed (cat shit everywhere), left lots of junk furniture and non-working appliances, and skipped town owing two months rent, house had to be gutted and re-furbed)
2 University lecturers (pain in the arse would ring up to get lightbulbs changed, ruined bathroom and kitchen ceiling when a leak developed and they waited a week to inform whilst still showering up to 3 times a day, burnt kitchen worktop)

the last tenants were the straw that broke the camels back, we re-furbed it again and put it on the market. whilst we did end up making about £40k after the mortgage was repaid, the stress and hassle just wasn't worth it. we will never be landlords again.

I have had almost the exact opposite experience. Over the years have let the flat to single women, couples, pairs of men but no families.

In each case the flat was returned in as good a state, or in at least one case, better than it was taken over in, even the pair that did a bunk owing a months rent!

Edited April 19, 2018 by Tim Lewis

[Athy]

Ee, they're rough in 'uddersfield.

[Richard10002]

13 hours ago, thomask130 said:

Maybe the better option would be to leave a decent amount in a bank, then if I ever need to buy I can, just making sure over time I keeping adding the savings to account for inflation house prices.

I always move back in my parents etc for a short term if I ever needed to.

1) Savings will never keep up with house prices.

2) Something WILL happen to tempt you to spend some or all of your savings

3) If you own a property that is rented out, you can always move back into your parents for the short term.

4) Some people are frightened of house prices falling, (which they do every few years).... but they have always rebounded to exceed the previous high in living memory. If it is rented out for the period that the market falls a bit before rising againg - So What?? (unless you are forced to sell).

[system 4-50]

I have just sold the house I live in. For 3000% more than I bought it for. Show me a boat that will appreciate that much. Or a saving account.

Unfortunately the house I'm moving to has also appreciated by as much so I'm no better off, but at least I still have a stake in the housing market.

[magictime]

1 hour ago, canalboat said:

Precisely.  Same experience with us. But you need to have at least 40k in the Bonds to cut down the percentages and get a regular worthwhile income, certainly keeping up with house prices, which is why we do it why living on a boat.  That is why I suggested it to the OP - so thanks Jess for backing up the idea. 

It's hardly 'certain' that that an investment in premium bonds will keep up with house prices in the long term, surely. In fact it seems pretty unlikely; I believe house price inflation over the past 20 years averages out at about 6%.

£70,000 invested at 1.4% a year 20 years ago would now have grown to c. £92,000; the price of the average house over the same period has grown from c. £70,000 to c. £225,000.

[JamesFrance]

You could buy a small house in my French village from 20,000€ upwards depending on condition. 15 minute drive to Carcassonne airport and we just flew to our boat via Stansted for 10€ each way.

[nipper]

1 hour ago, Hudds Lad said:

^ this

we remortgaged our first house to buy the one we're in now and kept it as a rental, paying a percentage to a well-established & large estate agent to manage everything apart from repairs.
rental agreement stipulated garden to be maintained, no smoking and no pets (wife is allergic to cat hair).

in the few years we let it out, we had;
a professional couple (garden left to go to seed, carpets never vacc'd, walls dented, kitchen damaged and generally grubby)
a young family (garden barely looked after apart from where they fitted a rotary clothes airer, too lazy to take the bins out they used the cellar as a rubbish dump which took 3 skips to clear of nappies food waste etc.)
3 sharing students (pretty much trashed it, kept pets when none were allowed (cat shit everywhere), left lots of junk furniture and non-working appliances, and skipped town owing two months rent, house had to be gutted and re-furbed)
2 University lecturers (pain in the arse would ring up to get lightbulbs changed, ruined bathroom and kitchen ceiling when a leak developed and they waited a week to inform whilst still showering up to 3 times a day, burnt kitchen worktop)

the last tenants were the straw that broke the camels back, we re-furbed it again and put it on the market. whilst we did end up making about £40k after the mortgage was repaid, the stress and hassle just wasn't worth it. we will never be landlords again.

Yep!

You spend money getting over the trashed property, sell the property later for a small profi, not taking into accound the hundreds or thousands you spend every time it was trashed, then the government take about 20% of that profit as Capital Gains Tax!

Been there, done that and never, ever again!

Nipper

[Boat&Bikes]

2 hours ago, Athy said:

That's unduly dismissive. Given the choice between having £25 and not having £25, which would you go for?

That said, I have a few thousand invested in Ernie Bonds and over the last five years they have yielded only about 2% on average. But, that's better than most savings accounts currently offered by banks and BS.

You have done well. Our bonds have yielded just under one percent over the last two years. We will keep them though as you just never know huh! 

[Athy]

8 minutes ago, ianali said:

You have done well. Our bonds have yielded just under one percent over the last two years. We will keep them though as you just never know huh! 

Yes, there is always the feeling that, the week after you sell them, one of your numbers would have won a big prize (is the top prize £100,000 now?)

[Boat&Bikes]

8 minutes ago, Athy said:

Yes, there is always the feeling that, the week after you sell them, one of your numbers would have won a big prize (is the top prize £100,000 now?)

‘‘Tis ten times that.. would settle for your quoted figure though! Best we have managed so far is fifty pounds.

[Athy]

19 minutes ago, ianali said:

‘‘Tis ten times that.. would settle for your quoted figure though! Best we have managed so far is fifty pounds.

A million pounds? That's too much; they would do better to reduce the top prize and to use the saving to create more smaller prizes, so that bond holders could win more often.

[Lily Rose]

27 minutes ago, Athy said:

Yes, there is always the feeling that, the week after you sell them, one of your numbers would have won a big prize (is the top prize £100,000 now?)

That's mainly why I held on to 10% of my original £10.

Now I have a tiny chance of winning £1m. Previously I had 10 times as much chance but even 10 times tiny is still pretty tiny given how much misrule the odds are (the chance of a very big prize for each £1 is measured in billionths).

3 minutes ago, Athy said:

A million pounds? That's too much; they would do better to reduce the top prize and to use the saving to create more smaller prizes, so that bond holders could win more often.

See section 1 for the number of prizes at each level plus the chances of winning.

https://www.moneysavingexpert.com/savings/premium-bonds

 

[Boat&Bikes]

32 minutes ago, Athy said:

A million pounds? That's too much; they would do better to reduce the top prize and to use the saving to create more smaller prizes, so that bond holders could win more often.

Agreed. Like the lottery isn’t it! Anyway, good luck come May the first. 

[Jess--]

here's the prize breakdown for April / May (april gave me and partner £25 each)

[dmr]

NSI quote the premium bond interest rate at 1.4%,which I assume is the average prize return. NSI also do a fixed interest 3 year bond at 1.9% so premium bonds look like a very bad investment, except for providing the fantasy of a huge win. House price inflation is well over 1.9%. Getting a house to rent keeps up with house price inflation (but watch out for capital gains tax) AND provides a monthly income. Maintenance costs and bad tenants are the risks.  In general cheaper houses (so maybe in not so good areas) and student houses give the highest returns but also the greatest risks. Nice houses rented to "professional couples" are lowest risk but also lowest return. High return with low risk would be lovely but is rather hard to find.

..............Dave

[kawaton]

5 hours ago, thomask130 said:

Hi

I'm aiming to keep about 30,000 to 40,000 aside away from the boat so that I feel I make at least a good deposit and can kept my options open.

 

If you haven't already...whilst thinking about buying a house.....I would at least get yourself a Help to Buy ISA.  potentially, It's a free £3000, which all helps.

Even if you only keep for 3 month's on an investment of £1600 you'd get a £200 return. .

Edited April 19, 2018 by kawaton
£200 not £2000

[Athy]

5 minutes ago, kawaton said:

If you haven't already...whilst thinking about buying a house.....I would at least get yourself a Help to Buy ISA.  potentially, It's a free £3000, which all helps.

Even if you only keep for 3 month's on an investment of £1600 you'd get a £2000 return. .

I've never heard of those. Although I myself shouldn't require one, it would be interesting to know how they work.