Hello! I am new to this forum but I have heard it is a good source of info so hopefully I will be able to get some opinions 
Just a disclaimer, we will obviously get professional advice etc etc before actually doing anything with our investments, but I still would like to hear from people who have had personal experience.
So the situation is this:
My widowed mother has sold her house and has $540,000 cash in the bank. She is happy to downgrade to a house in the $350k bracket. In addition she receives around $25k per year from overseas (UK) pensions. Obviously this changes slightly with the exchange rate. I am currently living rent free, and will probably continue to at least in the short term and may work overseas etc so am not currently looking at purchasing property to live in. FWIW I'm 28, earn about $70k, no real debt, own a car outright worth $35k and some various other assets worth about another $40k. In the next 10 years or so we would expect to inherit at least another $300K++ cash which would go into the existing savings account/mortgage/round the world trip etc depending on the circumstances at the time. I'm an only child and will inherit everything eventually but I want mum to have the best lifestyle she can atm (i.e. I'm not planning on hoarding everything for my own benefit lol!)
So my mother isn't very good with money (in that she doesn't like the idea of owing anything to anyone and would rather just pay cash for a house and be done with it, and numbers freak her out) but has said if I can come up with a better plan for the money then go for it. She will not allow any investment in shares/businesses etc (that risk thing..) and is non-negotiable in that. Neither will she allow multiple property purchases until the first is pretty much paid for and there is money in the bank. So I have to play it pretty safe
I have been doing a bit of research and have come across a few options, and I would love some feedback from those with more experience.
Option 1) Mum gets a mortgage for the 350k property, puts the 540k in a high interest savings account (6.5% 540k = 33k p/a + 25k income = 58k p/a) and uses her income to pay the mortgage indefinitely. The main issue here is tax and if interest rates for savings decline.
Option 2) I get a mortgage for 350K property and rent it to Mum and use her payments to pay part of the loan. She puts the 540k in the high savings account for a few years and lives off her other income. I get to claim tax back on interest etc etc. We invest the interest gained in the savings account on paying out the mortgage later, buying addition/better property or whatever.
Option 3) Mum gets a mortgage for the 350k property, puts say 200k in an offset account and $340k in a high interest savings account (6% 340k = 21k p/a + 25k income = 46k p/a) and uses her income to pay the mortgage indefinitely. The interest paid is lowed and she still gets gains on the cash. This can be changed to other amounts in each account, but the general point is the same.
Option 2) I get a mortgage for 350K property and use $? any amount in an offset account and let mum live in the house for free. She puts the remaining $ in the high savings account for a few years and lives off her other income. I get to buy property with minimal to no interest.
So what are the thoughts? Im sure there are issues I haven't thought about and probably better ways of doing this so hit me haha!
Just a disclaimer, we will obviously get professional advice etc etc before actually doing anything with our investments, but I still would like to hear from people who have had personal experience.So the situation is this:
My widowed mother has sold her house and has $540,000 cash in the bank. She is happy to downgrade to a house in the $350k bracket. In addition she receives around $25k per year from overseas (UK) pensions. Obviously this changes slightly with the exchange rate. I am currently living rent free, and will probably continue to at least in the short term and may work overseas etc so am not currently looking at purchasing property to live in. FWIW I'm 28, earn about $70k, no real debt, own a car outright worth $35k and some various other assets worth about another $40k. In the next 10 years or so we would expect to inherit at least another $300K++ cash which would go into the existing savings account/mortgage/round the world trip etc depending on the circumstances at the time. I'm an only child and will inherit everything eventually but I want mum to have the best lifestyle she can atm (i.e. I'm not planning on hoarding everything for my own benefit lol!)
So my mother isn't very good with money (in that she doesn't like the idea of owing anything to anyone and would rather just pay cash for a house and be done with it, and numbers freak her out) but has said if I can come up with a better plan for the money then go for it. She will not allow any investment in shares/businesses etc (that risk thing..) and is non-negotiable in that. Neither will she allow multiple property purchases until the first is pretty much paid for and there is money in the bank. So I have to play it pretty safe
I have been doing a bit of research and have come across a few options, and I would love some feedback from those with more experience.
Option 1) Mum gets a mortgage for the 350k property, puts the 540k in a high interest savings account (6.5% 540k = 33k p/a + 25k income = 58k p/a) and uses her income to pay the mortgage indefinitely. The main issue here is tax and if interest rates for savings decline.
Option 2) I get a mortgage for 350K property and rent it to Mum and use her payments to pay part of the loan. She puts the 540k in the high savings account for a few years and lives off her other income. I get to claim tax back on interest etc etc. We invest the interest gained in the savings account on paying out the mortgage later, buying addition/better property or whatever.
Option 3) Mum gets a mortgage for the 350k property, puts say 200k in an offset account and $340k in a high interest savings account (6% 340k = 21k p/a + 25k income = 46k p/a) and uses her income to pay the mortgage indefinitely. The interest paid is lowed and she still gets gains on the cash. This can be changed to other amounts in each account, but the general point is the same.
Option 2) I get a mortgage for 350K property and use $? any amount in an offset account and let mum live in the house for free. She puts the remaining $ in the high savings account for a few years and lives off her other income. I get to buy property with minimal to no interest.
So what are the thoughts? Im sure there are issues I haven't thought about and probably better ways of doing this so hit me haha!
