We'll_live_and_die
Super Moderator
Looking for some advice on finance options for getting into Property developing or BTL if anyone can help?
Anyone know about property developing/BTL? (10 Viewers)
- Thread starter We'll_live_and_die
- Start date
We'll_live_and_die
Super Moderator
No problem mate, still in the early stages of planning this venture.
Sky Blue Pete
Well-Known Member
My wife has spent the last furloughed months looking into this for our own venture into holiday house in Cornwall
speedie87
Well-Known Member
is harder to make money doing this now compared with a few years back if you are a higher rate tax payer as interest on mortgage can no longer be offset against rental income like you could before.
Can if you do it as a limited company.
Kneeza
Well-Known Member
Does my head in tbh.
We had a house and a flat in Nuneaton, and a house in Cov. Now down to the flat only and thinking of offloading that too. I still have another house in Cov too, but my mum lives in that, so no rental income, but at least she pays for anything that needs doing there!
Think long and hard, would be my advice, as it can be quite stressful in my experience.
On the mortgage front, when we were a bit more enthusiastic, we always used Town and Country Mortgage Services Free Mortgage Advisor & Brokers | Town & Country Mortgages
Can't recommend them too highly from past dealings with them.
We had a house and a flat in Nuneaton, and a house in Cov. Now down to the flat only and thinking of offloading that too. I still have another house in Cov too, but my mum lives in that, so no rental income, but at least she pays for anything that needs doing there!
Think long and hard, would be my advice, as it can be quite stressful in my experience.
On the mortgage front, when we were a bit more enthusiastic, we always used Town and Country Mortgage Services Free Mortgage Advisor & Brokers | Town & Country Mortgages
Can't recommend them too highly from past dealings with them.
We'll_live_and_die
Super Moderator
Why have you reduced the properties so much if you don’t mind me asking?
Kneeza
Well-Known Member
Not
We had them for about 12/13 years (since just before the 2008 crash) and obviously the value hadn't grown too much, and they weren't making much at all in rental income (the Keresley one in particular).
It seemed like we were spending a lot on maintenance too, on top of agents fees.
We have both suffered mental health issues in the past (I don't mind admitting it now, but it's not something I used to be able to square up to easily) and we really felt that things were getting on top of us and didn't want to end up in that awful spiral again.
The flat in Nuneaton actually returns a reasonable income - certainly enough to cover maintenance and a little over on average - so we decided to stick with it for a while, but we're considering dropping it now even though it's close to being in negative equity.
Not at all.
We had them for about 12/13 years (since just before the 2008 crash) and obviously the value hadn't grown too much, and they weren't making much at all in rental income (the Keresley one in particular).
It seemed like we were spending a lot on maintenance too, on top of agents fees.
We have both suffered mental health issues in the past (I don't mind admitting it now, but it's not something I used to be able to square up to easily) and we really felt that things were getting on top of us and didn't want to end up in that awful spiral again.
The flat in Nuneaton actually returns a reasonable income - certainly enough to cover maintenance and a little over on average - so we decided to stick with it for a while, but we're considering dropping it now even though it's close to being in negative equity.
Wouldn’t bother with an agent. They basically charge you 10% to answer a phone then phone you to ask do you want to sort it or do you want one of their contractors.
If you confident at most repairs or know sufficient good trades people and making assessments of potential tenants you can do it all yourself. It can be stressful for sure but in my experience good landlords end up with good tenants.
KersleyDigs
Well-Known Member
BTL was f*cked up by George Osborne. Not worth it as an income in my opinion unless you set up a limited company which is a hassle. I sold all but 3 of our properties (good capital growth investments), if I was to get back into BTL property again, I'd look at commercial properties as the tax situation is different.
SBAndy
Well-Known Member
If they’re owned personally then you’d have to effectively sell it to a Ltd Co and face the stamp duty hit, though given the reduced rate currently it’s something that’s been prevalent in the last 9 months or so. If starting, make sure everything is done via Ltd Co. Also easier when it comes to CGT/IHT planning further down the line.
Sky Blue Pete
Well-Known Member
Furnished holiday letting interest is an allowable business expense
We'll_live_and_die
Super Moderator
Yes mate, but it seems the resolution is too low for it to work. I've decided to leave it as I can imagine people sitting there trying over and over to scan it. Simple pleasures mate.
Corrado
Well-Known Member
Ha ha - your logic worked hence me asking you! Feel like a prat now
mrtrench
Well-Known Member
Yes, but it would then be a business loan... harder to get and more expensive.
I agree with others on here - have sold two BTL houses since Osborne's tax-offensive and there's no way I'd buy now. There's also an extra 3% stamp duty to pay on a BTL house. It's no longer economically feasible. Osborne has moved the market towards large companies who can fund it themselves and away from lots of small landlords. I'm not convinced this is better for renters... I guess it reduces the risk of a bad landlord but ultimately it will lead to higher rents IMO.
shmmeee
Well-Known Member
Commercial is definitely the one to get into if you can raise the funds. Or student lets.
mrtrench
Well-Known Member
It's student lets I do. A lot of hassle if you want to keep your property in decent condition. They moan about everything for the first few months; leave the place like a pig sty and moan when you try to recover some of the expense of putting it right through retaining deposits.
I had one guy go mad with a ball-bearing gun one year. He did over £3k worth of damage: windows; kitchen units; his bedroom wall and bed (which had also been attacked with a knife). Plus they'd bent a lot of the cutlery into what I assume from the shape and colour something to heat drugs on - the garden was full of the steel gas containers they sniff. He then denied, denied, denied and took my deposit retention to arbitration - which took me about 15 hours to prepare for (on top of the 4 weeks repairing all the damage). Fortunately, I had lots of photos before and after and could prove my case to the arbitrator. Still lost over £1k on the transaction as you cannot replace old for new.
Another year I had a kid who was in a top club's football academy. He never told me why but he'd completely destroyed his bed and slept on the mattress without sheets for a year so it was filthy.
You have to accept that things you'd expect to last for years are good for far fewer. I have to paint several rooms every year due to God knows what splattered all over them; carpets are good for about 3 years before you have to replace; mattresses (and I buy good ones) are seldom good for more than 3 years as they are stained and torn... the list goes on. Yes, on the face of it the yield is good - but I spend at least £1k per house every summer putting things right under tight timescales before the next lot move in.
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robbiekeane
Well-Known Member
bang it in a ltd company so you can still offset mortgage interest, and pay corporation tax. dont give yourself an income. stick your kids as directors and jobs a good un
shmmeee
Well-Known Member
Got to be honest, sounds like you give them way too much! I don’t think I ever had a student house that came with cutlery!
mrtrench
Well-Known Member
Why would having kids as directors help? Shareholders maybe...
Brylowes
Well-Known Member
We run a pub that we rent, we then own 2 houses 2 flats and 1 shop, all are mortgaged except 1flat and shop.
No limited company and the rental covers the mortgage costs, the rest we bank and put toward our tax bills.
We do it purely as a type of pension scheme.
robbiekeane
Well-Known Member
Inheritance
mrtrench
Well-Known Member
As directors they do not own the company, so it doesn't help. They need to be shareholders.
clint van damme
Well-Known Member
I've mentioned this before on here but we had representatives of London letting agencies knocking on our doors in Earlsdon offering to buy houses the week Osbourne announced his tax changes as it didn't really change anything for them.
The only thing I would add Mr Trenchs post is how much equity would you have in the property? If it's high then you could still make it pay but the days of 25 to 30 percent deposit and mortgage for the rest are over.
Obviously a lot of people go down the HMO route but you need to put a lot into getting the property in to fit shape and then there's the hassle of managing multiple tenants.
I have one other property which my daughter is living in at a reduced rate so not really making anything. Once her and her husband get their own house I'm thinking of selling though I might put another bedroom in first.
Not sure where I'll put the money though, are those wasps bonds still available?!
shmmeee
Well-Known Member
clint van damme
Well-Known Member
Buy GameStop
had to Google. I don't know anything about stocks and shares but that's got major crash imminent written all over it!
clint van damme
Well-Known Member
Buy GameStop
well this is turning in to some story.
Uber free market capitalists crying like fucking babies because a load of gamers used free market capitalism to stiff them for a fortune.
shmmeee
Well-Known Member
I have no idea what’s going on or what it means but all the right people are freaking out.
clint van damme
Well-Known Member
I am prepared to be corrected here but I think it's something like this - basically a hedge fund shorted on shares in this company which means they bought a shit load of shares in it and needed the price to drop.
These geeks and gamers then started buying shitloads there foe pushing the price up and the hedge fund is in dep shit. They're now trying all sorts of dirty tricks to stop these gamers and get their money back. Beaten at their own game and fucking blarting about it!
Basically there are trading platforms restricting trading in the company by individual traders while carrying on allowing hedge funds to do what the fuck they want.
All hail the free market ,(unless it doesn't go our way then make it not free!)