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I've been selling some of my properties over the last few years. As I get older I'm planning ahead and have decided I don't want to be managing as many properties. So, it seemed prudent to start to sell them off ......this has been working quite well.......up to now !!!

With Interest rates now at an all time low I'm starting to ask myself what am I going to do with another £170K if I sell another property. I don't need the money and I will definitely get a very low return where ever I invest/save it......but there is an alternative.

If I keep the property it's currently providing around 4.5% after tax.......can't get that anywhere else without very high risk.

I'm thinking I might just not sell ......yet.

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Premium Bonds. 50K Each.

No capital growth but you may get the big one and tax free..

A friend of mine had a chunk of money not knowing what to do with it. He got 50k of bonds each for his wife and himself and he said he used to win something nearly every month and get a a number of envelopes which was his kids job to open up which was a bit of excitement for them.   Most were just the minimum prize but he said he got a few bigger ones  

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I feel very fortunate that I have never really been a gambler. I have played the stock market and made more than I lost, which is generally the idea but the only thing I do now is a few charity lotteries & lotteries linked to savings accounts....but I've never won anything.

Don't think I have ever bought a scratch card or done the national lottery or the football pools.

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This was a bit of a problem for me as well just over 2.5 years ago (March 2019) when IR were around a mighty 2.5% back then.

I had a feeling it was going to get worse with IR getting lower and like RL I did have a wedge of built up cash doing nothing by way of return so when a nice 2 bed semi detached modern property came up in my favourite location and favourite road I went in like a bull in a china shop and bought it.

                     I did pay slightly over the top for it by around a couple of thousand pounds and of course the dreaded SDLT for second homes purchase was a very sizable chunk of cash as well.... but you cannot stop a charging bull.  😃   I like to think that I did realise that there would absolutely minimum growth in the capital value for a few years and that has more or less been the case but if I were to sell it now I would realise most of what I spent back, but I'm not selling so it's an academic argument.

                The important bit is that my return on my investment has far far exceeded any savings IR or stock market investment and that is after all considerations like HMRC tax paid and property repairs and the initial improvements I made to the property to tidy it up for letting.  So did I do the right thing?  I like to think so and even Mrs Melboy who was not too happy back in 2019 about me buying this property does now accept ( grudgingly   😄  ) that it does appear to have been a good course of action to take.  The raging Bull is now peaceful.

So go for it RL!

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I am in the same position myself at the moment. So am in the process of buying a 2 bed ex-council flat (service s/charge £150 pa) generating £800pcm for 160k and a 3 bed terrace house for 215k which should achieve £1050 pcm and possibly the option of renting the garage out separately. Though the house will need about 8-10k work.

The flat will be the first one I'm putting into a Ltd Co.


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Just bought a job lot of heaters......winter is coming.....I sense a healthy profit on the way.

Lawnmowers are a good buy this time of year....buy, hold & sell in the spring. It's the same with garden furniture and air conditioning, all can be picked up for a song.

Don't recommend suitcases as nobody is travelling so sales can be slow.

Don't recommend bicycles either.......seems prices have gone through the roof as people have more time on their hands.

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Back in April 2007  I foolishly bought a nice modern 1 bed garden flat right at the height of the property boom which turned out to be be one of my not so very good brilliant ideas of rental property expansion......at that time.

By the August of that year the property boom was heading for a bust situation and Northern Rock was leading the way.

Sure enough my overpriced flat was plunging in value, in fact over the next 3 years it would drop by at least £25,000.

I sucked it up and let the flat out at a good market rental price. This flat did not achieve my purchase price until around 2017 and even now in 2020 it is only around £10,000 more in value than I paid for it.  However this flat has been continuously rented out for the past 13 years with only a 2 weeks void period and that was mainly because I needed time to install double glazing and other property upgrades. The queue at the door for prospective renters soon formed and off we went again.

I always said that once this flat got anywhere near what I paid for it I would sell it on and conveniently forget my financial mistake of 2007 but I have not, in fact this flat is now a nice little earner and that is mainly due to the collapse in interest rates which nobody thought would ever get to be so low and lasting for so many years. The prospect of zero interest rates is looming up very fast if you read the financial papers forecast and I do believe that may well happen as well.

So is this a lesson to be learnt for everyone who is a landlord considering selling up? possibly, but remember when you bank your profit wedge of cash don't expect to make any money from the day you bank it. You may even have to pay the bank for keeping it in there!  I shall be keeping this flat on for the foreseeable future in fact, this weekend I am installing new fencing (might put some pictures up) and some other upgrades for my long term tenant.

I have fallen in love with this flat again.  😄



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