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  • Buy-to-Let

    Advice - mortgage advisor

    Hi

    I am looking for advice and not sure where to go I am  53 and have been left some inheritance I want to go into btl  as a limited company and pack up my day job. I will have a business partner and not sure where to get advice on mortgages etc.

    Has any one got any ideas of who i can turn to.

    thank you in advance

    Paul

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    Hi Paul - sounds like a helluva lot of changes all at once!

    What g'teed pension do you have ?

    What savings?

    How much was inheritance?

    Which County do you reside in?

    Do you own own home and if so it[s net worth?

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    You`ve turned to PT which is a good initial smart move

    Read and absorb as there is good advice on here

    Much advice will be conflicting though for valid reasons

    So don`t just follow the first stream of advice you get however much you may want to

    Get a broad knowledge base under your belt so you can then hone in on a specific strategy

    Then ask more questions on that potential strategy 

    You will begin then to feel more comfortable

    Where are you based in the country ? 

    Then people can signpost you also for more specific  F2F local advice

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    Jonathan Clarke. http://www.buytoletmk.com

    I'm in a similar situation Paul and a lot of self education will be required, but this site has a wealth of advice.

    Near the top of the screen is a row of tabs, one of which is mortgages. That will take you to the mortgage broker that sponsors this site. Alternatively, at the very top of the screen is a pink tab, Browse All Tribes. Click on this, then select mortgages and you will find all the discussions relating to mortgages and other mortgage brokers who regularly contribute.

    You will also find it useful to repeat this process for Legal FAQS and Tax.

    Read as much as you can absorb and then you should be able to ask informed questions.

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    Paul - I would also strongly suggest that if you have a well paid job - especially one with a Final Salary Pension - you should hang on to that job as long as possible.

    Noteworthy is that State Pension equivalent needs a pension pot of £250,000 to buy a index linked annuity age 65 - and you are some 15 yrs away from being eligible for your SP.

    Of course the best way of ensuring an adequate pension is to ensure you have low outgoings at retirement - via being an outright home owner - which you may be already - failing which you need to eradicate any residual mortgage asap.

    On the other hand - if you live in a rented home - then first and only priority should be to get your own home - maybe using inheritance for outright purchase - or if too small as a deposit.

    You also need to evaluate whether BTL is a good route to grow net worth in foreseeable future.

    In ballpark numbers - the target is around 12/15% return/yield annually.

    In the South traditionally most of that target yield has derived from Capital Growth and only around 1/3rd from gross rental yield (annual rent divided by property acquisition costs)

    Property prices are at best stagnant right now for all the well published reasons.

    In the South that leaves rental yield and that has been attacked via S.24 - which I assume prompts you to look at Ltd Co route.

    You should research the complexities of incorporation very thoroughly before committing to that route - and maybe just buy in own name first to get a feel for the business

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    I would also suggest you search here regarding the Pro's and Con's of BTL via Limited Companies. This subject is discussed every week on PT from one angle or another, the reality of incorporation might not but what you think it is and requires extensive research.

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    Biggest single question you need to ask and evaluate - is will BTL be as profitable going forward - as it has in say past 20 yrs or so?

    The 3% SD surcharge alone is extra £9000 on a £300k flat in SE - plus the basic SDLT of £5000.

    In past 20 odd yrs in SE prices are up around 5 fold - that enabled many to release some of that equity increase to buy a second BTL - and repeating that process enabled many LLs to grow their portfolios fairly quickly - but there is no g'tee that we shall see that 8% plus compound growth on future prices.

    From a standing start today - acquiring a £300k property via say 75% BTL loan needs cash of close to £100k to cover SD /fees - plus any refurb needed and Gas.Elec certs.

    Buying leasehold means LL pays Service Charge of £1000 pa upwards - which in void periods means you pay that plus full CT plus mortgage from own resources.

    That goes some way to flagging the need for a sound financial base from which to start.

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    Hello Paul,

    More than happy to discuss mortgages with you, give you some idea of what's available along with associated costs etc.

    Contact details for Property Tribes FS are in my signature below.

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    You can contact me via Direct Message, or 07788 219647 or call the team on 01206 654444 for personalised quote and advice