Plan B - Next project - BTL and?

**Churchill** · 1 November 2011, 16:29

Originally posted by MarillionFan View Post

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)

What do your articles of association say?

**conned tractor** · 1 November 2011, 16:33

Sounds too good to be true....

....still not for me though, the repairs, the tenants, the hassle, the risk. I couldn't be arsed with that, and it's all so naughties.

Rents being market driven, as soon as we start building some houses (unlikely) or a net emigration (unlikely) then rents will fall generally. Then there's affordability by the average family and what the DHS will pay. I'll lend you my crystal ball for a monkey.

**minsky1** · 1 November 2011, 16:51

I've developed a portfolio of property over the years, some owned personally, some via the company.

First off, you mention your "off" to look at it. How far away is it from your base and can you manage the tenants yourself? If your out of the area and have to rely on a letting agent to collect rent/inspect/maintain you can kiss goodbye to a large proportion of that rental income.

Secondly those numbers would not add up for me, 147k pulling 595pcm? ...... I would be looking at finding 2x two bed renovation projects (local to my home base) for refurb. Today's market would easily see 147k covering the total cost for me.

Regarding the company implications, its usually beneficial to put through the company if your carrying out building works, or its a commercial property.

You need to have a chat with e3Consulting, they are pretty good with property tax and have saved me a fortune in the past. Not affiliated in any way - E3 Consulting - Property Taxation Specialists - E3 Consulting - Capital Allowances, Land Remediation and VAT. Speak to Alun Oliver, the main man.

**northernladuk** · 1 November 2011, 16:53

Originally posted by MarillionFan View Post

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)

Come and ask in the Professional pages. Bolshie and Mal gagging to have a go....

**MarillionFan** · 1 November 2011, 16:55

Originally posted by northernladuk View Post

Come and ask in the Professional pages. Bolshie and Mal gagging to have a go....

You'd only get upset when you lose any arguments. :-)

**northernladuk** · 1 November 2011, 16:59

Originally posted by MarillionFan View Post

You'd only get upset when you lose any arguments. :-)

Notice my name isn't in that list my bestest bestest bestest buddy MF

**MarillionFan** · 1 November 2011, 17:00

Originally posted by minsky1 View Post

I've developed a portfolio of property over the years, some owned personally, some via the company.

First off, you mention your "off" to look at it. How far away is it from your base and can you manage the tenants yourself? If your out of the area and have to rely on a letting agent to collect rent/inspect/maintain you can kiss goodbye to a large proportion of that rental income.

Secondly those numbers would not add up for me, 147k pulling 595pcm? ...... I would be looking at finding 2x two bed renovation projects (local to my home base) for refurb. Today's market would easily see 147k covering the total cost for me.

Regarding the company implications, its usually beneficial to put through the company if your carrying out building works, or its a commercial property.

You need to have a chat with e3Consulting, they are pretty good with property tax and have saved me a fortune in the past. Not affiliated in any way - E3 Consulting - Property Taxation Specialists - E3 Consulting - Capital Allowances, Land Remediation and VAT. Speak to Alun Oliver, the main man.

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???

**northernladuk** · 1 November 2011, 17:03

Originally posted by MarillionFan View Post

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???

How does the 147K stand up against other properties in the area? Has the planning permission factor been added on to that price?

**Pondlife** · 1 November 2011, 17:05

Originally posted by minsky1 View Post

First off, you mention your "off" to look at it. How far away is it from your base and can you manage the tenants yourself? If your out of the area and have to rely on a letting agent to collect rent/inspect/maintain you can kiss goodbye to a large proportion of that rental income.

Can't comment on your numbers MF but as for distance, WMS.

You really think you can manage builders & tennants from a distance.

It's got PITA written all over it IMHO and will become a right drag if you find yourself having to drive there every night to check stuff out after a hard day spent on here antagonising suity.

On the otherhand. He who dares Rodders. He who dares.

Plan B - Next project - BTL and?