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Anyone still looking at buy to let?

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    Anyone still looking at buy to let?

    Hi All,
    I've already got a B2L place which I intend on keeping, but I was just wondering if anyone is still considering B2L as a solid investment? Prices in and around London are out of control, but up north there seem to be reasonable deals to be had, for example ~ £150k for a decent 3 bed semi in Doncaster (close to where my folks live).

    Anyone still considering buying new places? How are you planning on doing it? Through a shell company? Personally? Something else?

    Cheers....

    b0redom
    And the lord said unto John; "come forth and receive eternal life." But John came fifth and won a toaster.

    #2
    Looking into it still, more than likely via an SPV as a subsidiary to my main Ltd co so I can loan the money across.

    Problem is my accountant just fobs me off when ever I mention a subsidiary saying it's too complex so either need to see how feasible it is to buy through the main Ltd co or find another accountant that's clued up on purchasing via an SPV.

    Comment


      #3
      Originally posted by b0redom View Post
      Anyone still looking at buy to let?
      Simple answer: Yes still looking at BTL

      More complex answer: The numbers are shifting so there will be some higher costs, will take a bit more jiggling and juggling but still looking to be long term viable.

      At simplest level:
      a) Does potential rental income (at least) break even
      b) Does potential capital increase provide better/same return as other vehicles
      c) Are risk of above better/worse than other vehicles
      Result: Go/No Go

      If I make wrong guesses I get burnt/Right guesses its all good

      NB My BTL have always been mid-long term capital increase investments - I never try to aggressively maximise rental income.
      ie I don't buy derelict tulipholes and rent out rooms to students/immigrants/DHS at high weekly rates, I buy nice little properties to lease out to nice people for a few years and they pay their way (cover mortgage/agency/upkeep etc) meanwhile the capital cost of the houses, ideally, increase above other options.

      Comment


        #4
        Originally posted by Dactylion View Post
        Simple answer: Yes still looking at BTL

        More complex answer: The numbers are shifting so there will be some higher costs, will take a bit more jiggling and juggling but still looking to be long term viable.

        At simplest level:
        a) Does potential rental income (at least) break even
        b) Does potential capital increase provide better/same return as other vehicles
        c) Are risk of above better/worse than other vehicles
        Result: Go/No Go

        If I make wrong guesses I get burnt/Right guesses its all good

        NB My BTL have always been mid-long term capital increase investments - I never try to aggressively maximise rental income.
        ie I don't buy derelict tulipholes and rent out rooms to students/immigrants/DHS at high weekly rates, I buy nice little properties to lease out to nice people for a few years and they pay their way (cover mortgage/agency/upkeep etc) meanwhile the capital cost of the houses, ideally, increase above other options.
        Personally or through the business?
        If through the business have you bought cash or mortgaged?

        Comment


          #5
          Originally posted by Murder1 View Post
          Looking into it still, more than likely via an SPV as a subsidiary to my main Ltd co so I can loan the money across.

          Problem is my accountant just fobs me off when ever I mention a subsidiary saying it's too complex so either need to see how feasible it is to buy through the main Ltd co or find another accountant that's clued up on purchasing via an SPV.
          Does a SPV give rise to the Associated Companies restriction?

          I have looked into setting up a Ltd and transferring our properties into it, seeing as that is the way the government is forcing property investors to operate. Reminds me of when contractors were forced into Ltd Co structures years ago.

          Comment


            #6
            I just had an offer accepted on a 2 bed. Will be on an interest only mortgage to benefit from low rates, and create additional monthly income.

            Comment


              #7
              Well my understanding was that transferring an existing property into a ltd was a no go as you get a massive capital gains hit. If it is possible though that would be great, as I would prefer the cash from my B2L to only be liable for corp tax and reinvest it in additional properties.

              I've got a bunch of cash sitting in my Ltd, so if I could spin up a 2nd ltd to operate additional b2ls through and lend money to it from myco that would be a preferred way of doing it. Not sure if that's possible though.

              My ideal scenario would be that a new property co just ticks along, and I wouldn't take any profit from it until retirement.

              How does an SPV work though? If YourCo is VAT registered, is the SPV bit also VAT registered, that would make rental incomes much less competitive no?
              Last edited by b0redom; 19 March 2016, 11:26.
              And the lord said unto John; "come forth and receive eternal life." But John came fifth and won a toaster.

              Comment


                #8
                Originally posted by b0redom View Post
                Well my understanding was that transferring an existing property into a ltd was a no go as you get a massive capital gains hit. If it is possible though that would be great, as I would prefer the cash from my B2L to only be liable for corp tax and reinvest it in additional properties.
                Incorporation relief is available but there are restrictions and precedent is that the property 'business' must bed your main activity (or your wife's).

                Originally posted by b0redom View Post
                I've got a bunch of cash sitting in my Ltd, so if I could spin up a 2nd ltd to operate additional b2ls through and lend money to it from myco that would be a preferred way of doing it. Not sure if that's possible though.

                My ideal scenario would be that a new property co just ticks along, and I wouldn't take any profit from it until retirement.

                How does an SPV work though? If YourCo is VAT registered, is the SPV bit also VAT registered, that would make rental incomes much less competitive no?
                I'm thinking along the same lines here. Will be making a move on this next year, and have been thinking:-
                - Perhaps to MVL and cash out completely from IT, and move into property investment full time.
                - A 2nd Ltd is not the way forward because we would be impacted by Associated Companies jurisdiction.
                - I have yet to understand how a SPV would work alongside our IT Ltd.
                - As an outer-option, I wonder if I could keep the IT Ltd but then when I stop contracting next year, change the SIC to a property business and use the funds to kickstart property investment.

                Comment


                  #9
                  I've just completed on another one. Took the tax hit on higher dividends to extract up to the £100k mark for personal income and paid cash for the property. Should return ~400 a month with no mortgage to worry about. The new rules are making it progressively less attractive, but the incentive to take dividends this year rather than next was good. The money was earning ~£5 a month so, additional tax aside, it didn't take too much thinking about.

                  Prices have been pretty static around here for the last few years, i'm not expecting a large capital gain from it so the passive income element is the main factor.

                  Comment


                    #10
                    100k? You bought a suburb of Huddersfield or something? With Golcar thrown in as spare change?
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

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