Plan B - Next project - BTL and?

[MarillionFan]

The westcountry is different - if it's a nice bit.

What town MF?

I'll tell you after I buy (or not).

(And to your previous point, when I get a chance I'll post up the Excel BTL models I use somewhere on the net for those who are interested)

[DimPrawn]

The great thing about BTL is it is a proven recesssion/depression/doom proof investment. If property looks like it is starting the fall, the property rich ruling elite that control whichever govt is in power pull the interest rate/money printing/immigration levers to ensure constant wealth.

Boomed!

Fill yer boots!

[MarillionFan]

The great thing about BTL is it is a proven recesssion/depression/doom proof investment. If property looks like it is starting the fall, the property rich ruling elite that control whichever govt is in power pull the interest rate/money printing/immigration levers to ensure constant wealth.

Boomed!

Fill yer boots!

The present mechanics of a BTL are

1) Rental Yield (and % of occupancy)
2) Type of Property
3) Location
4) Stamp Duty Thresholds
5) Capital Growth / Loss

Dependent on the Rental Yield, you then have to decide on cash purchase or BTL mortgage and counter balance that with Capital Growth / Loss. Significant movements in % rates will impact.

In addition, type of property, age etc are contributing factors.

For me, previously, I had student property thay I actively managed. The cost or repair/maintenance was offset by the capital growth. Now a more savvy approach is required.

Personally. I think BTL are an interesting addition again, as long as you're not borrowing to heavily to do so. Borrow no more than 60% IMHO.

[TimberWolf]

The great thing about BTL is it is a proven recesssion/depression/doom proof investment. If property looks like it is starting the fall, the property rich ruling elite that control whichever govt is in power pull the interest rate/money printing/immigration levers to ensure constant wealth.

Boomed!

Fill yer boots!

All the levers have been pulled down and are bent around their fulcrums now though.

[Lockhouse]

I wouldn't start any building project I couldn't drive to in 20 minutes. Find something closer to home.

[d000hg]

I'll tell you after I buy (or not).

You sound like an agent scared of sharing the company name.

(And to your previous point, when I get a chance I'll post up the Excel BTL models I use somewhere on the net for those who are interested)

What a treat.

[ChimpMaster]

The present mechanics of a BTL are

1) Rental Yield (and % of occupancy)
2) Type of Property
3) Location
4) Stamp Duty Thresholds
5) Capital Growth / Loss

Dependent on the Rental Yield, you then have to decide on cash purchase or BTL mortgage and counter balance that with Capital Growth / Loss. Significant movements in % rates will impact.

In addition, type of property, age etc are contributing factors.

For me, previously, I had student property thay I actively managed. The cost or repair/maintenance was offset by the capital growth. Now a more savvy approach is required.

Personally. I think BTL are an interesting addition again, as long as you're not borrowing to heavily to do so. Borrow no more than 60% IMHO.

We made the mistake of buying in cash a while back, but back then it wasn't such a problem because my wife has no income so we could attribute all rental income into her name. This saved on income tax.

Now that she has more properties in her name, the income/tax situation becomes complicated and it's far better to have mortgage payments that you can offset against tax. This of course also means you can buy more properties with less money down on each house. Then you can decide whether to do a repayment mortgage or go into BTL pro-style and just leave it as interest-only.

Personally I prefer to go with repayment so that the rent pays off the mortgage over time.

[Paddy]

Offski tomorrow to see a Buy to Let property in the West Country. Decided to get back into BTL if the right property comes along and been looking for a while.

This one could be right one. Two bedroom end terrace house, 15 years old, presently rented at £595 per month for £147500. A 4.8% return. Pretty modest.

But this one also has full planning consented, both outline and detailed to build another 2 bedroom, identical house at the end, turning the first one into terraced.

Estimated build costs around £55-£65k. Then planning to rent out both properties after the build.

No point doing things in halves.

Anyone done anything similar and have any advice?

(Plus - is there anything I can use my LTD company for to gain a tax advantage? ie. Get the LTD to finance the build / own)

If it's cash, I know of one better, in fact if you have cash I may even know one to get you a short term 6-12 months very high return. All surveys etc done and waiting at solicitors.

[geoff from contracta IOM]

Cheers Minsky, I know you've done a few.

I was looking at £147k to buy, £60k to build a second. That gives me £207k for two identical properties giving 2 x £595, which is 6.9% return and properties worth £115-£125k and £125-£135k respectively. Build time around 16 weeks. With a plan to start in March/April 2012 to allow me to draw down from the LTD company dividends over the two tax periods to finance the build.

Would then look to place one house in my name, one in the wifes. That seem reasonable???

Assume a build cost of 80 per sq ft for a reasonable finish , 16 weeks is unrealistic for this type of new build that is not straight forward assume at least 20 weeks . Allow for the solicitors costs of splitting the title and check very carefully if there are covenants on the land just because there is PP does not mean you can legally build there, it means the council will allow you to build there. Is a new build 2 bed end terrace going to be worth 180 K ? If not why would you build when you can just buy one without the risk .

[geoff from contracta IOM]

Should have mentioned I bought a repo'd 3 bed flat for 44,000 and the council are paying 400 per month for it . There are much better deals for BTL's out there if you look for them focusing solely on yield.