Hello. Apologies for this being long winded!
What should we do - pay down mortgage or buy another property? I like the idea of owing nothing on our house, but my wife thinks we should buy another property.
Here's our situation:
We live overseas (in Malaysia)
We have a one bedroom flat in the UK that is mortgage free and rented. It is in a great location and has always been rented (except for 1 month here and there) for the last 20 years. The original purchase price was GBP 54000 and it now has a value of ~ GBP 200000.
We also have a 3-bedroom house that is also rented. It is also in a great location and we had no trouble renting it at all.
Original purchase price was GBP250000. We still owe GBP 140000 on this property with 22 years remaining on the mortgage. Its market value is ~ GBP315000.
We live in Malaysia and our employer pays us a housing allowance that we are currently using to rent a house.
We have an investment that will mature soon. It's around GBP 80000. We could pay that down on the mortgage of the house and use the money that we were paying into the investment monthly to make extra mortgage payments. Doing this, we could pay off the entire mortgage in 3-4 years, saving ~ GBP 80000 in interest.
The other possibility is to use the money to buy a property here in Malaysia and use our housing allowance to pay the mortgage monthly. We will definitely be in Malaysia for the next 5 years at least, so our employer would be paying the mortgage for us. As we would be the tenants, we wouldn't need to worry about the property being vacant. When we leave Malaysia, we could then either sell the property or rent it to other employees in our company.
What would other people do in this situation? I feel like continuing to rent is just throwing money away. But I also like the idea of having 2 properties in the UK mortgage free.
We have had our fingers burned with the stock market in the past, so we are reluctant to go down that road again.
Thanks,
Sean