620k - buy house or put on deposit

I have 620k to invest. Thinking of buying a two-bed house in Portbello area for 380k with view to renting. Already have two rental properties with no mortgage. Work part-time as a nurse, and have two young children. Was looking at another property so that income could make up a decent income, so that I could give up work for a few years if necessary. Own my own house in midlands. Also looking for properties as possible long-term pension for 20 years time - have missed a lot of work years due to children and their illnesses also. Have thought about putting money in high-interest deposit account, but concerned about affects of inflation, and now, safety of bank deposits. I', 42. Any advice greatly appreciated.

You could try diversifying a bit to spread the risk.
Put some into gold for example.

What return would you realistically expect by renting out the property.

Would it beat deposit rates?

Which is more likely to devalue? The property or the savings on deposit?

If you're going for deposit you should spread it around to minimise risk.

you are already highly exposed to property as an investment class and it would be foolish to increase that exposure

I would suggest putting precisely none of your 620k into property.

Maybe some into a Eurozone equity fund and some into precious metals. If you want a bank deposit, why not Northern Rock - safest bank in the world right now!

You should be looking for general investment advice, not just property advice. Also for that level of money you should be looking for professional advice. Have a look at some of the key posts, some useful info there.

Hi,

How about investing in a foreclosed property??, you can invest the rest in high-interest deposits

Ok forget about property for the moment and if you are considering property at least do it through you're pension fund. That way you'll be able to get a deduction against Income Tax etc...

Forget about inflation. Does inflation matter if the house you purchase has lost 25% in the next five years? I think you'd be quite happy to be getting your 5% return from a bank.

Are you paying tax at 41%? Maybe you should look at buying yourself some Capital Allowance that you can offset against all income....

Go for the deposit accounts, taxable at 20% and very safe. Naturally spread it around for safety and to maximise your interest rate.