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DL am reviewing my properties at the moment and made me think of you. I know you set an 8% ROI* threshold for new purchases. Can I ask whether you apply the same measure to your existing portfolio?
*my assumption this is a post tax no cg measure.
My own business runs a double digit yield overall and, when I am buying, I look for a yield over 8%
Have I answered your question ?
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
I think so, so there are less good yield also in there but you have accepted them in the mix? I have a property that’s not doing quite as well as the others. It still has positive cash flow, but was wondering what I should do with it. Any thoughts?
If you own a property I would look at three things
1 is your yield high enough to pay all the bills and S24 if your effected and give you a positive cashflow
2 over the long term say 10 years plus would you have capital growth
3 If you were to sell how much profit would you have after all costs and if you profits elsewhere how much profit would you make
If you feel the First two adds up i would keep long term
Personally I dont favor the sale of any of my property because the First two points are achievable
Thanks DL.Answers below:
1 - yes it is
2 - I don’t know, I don’t normally consider cg. It’s a standard Victorian house in a middling area in Norwich
3 - I think I have a small gain. Circa £15k So guess most of that would be chewed up by stamp duty and fees on a new purchase?
I am the same as you CG is a plus not a right going forward
Best of luck DL
Would you consider paying the stamp and popping it into a company?
Well Have done this a number of times
I call it the Landlord Shuffle It can work well if you dont have a lot of CGT to pay
You will have stamp duty and costs of selling and buying of course and the cost of running a company
But as I have said Ive done it
Once I have my Pension income coming in in 5 years I will start and move more of my property into the Company
So as Pension income rises BTL Income will drop as I do the Shuffle over the next seven years
I reckon it’s a 5-6 year payback to pay the stamp and fees. CG would be covered by personal allowances.
Seems ok, but then it would affect my gearing as I’d need to use my cash reserves.
I understand fully where your coming from its not easy and its a personal call
I know I have done some sole searching too
I have tried to do a Balance in my business adjusting and changing things
It has made me think hard and I think long term my Business will be the better for it
age is a major factor for me being over 60 I need to think hard about the future and I think the Company strategy is a good thing
if a Landlord is 30 or 40 years old there strategy will be a lot different from mine
Well I fit into that age group (just) what would you differently in my situation if you were 30-40?