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  • Refurbish/Develop

    Fresh start with £150k what would you do?

    My current idea at present (still need to seek taxation advice) is to sell my current house, I live in and have rennovated, for approx £140k and use £10k of savings. (Going to rent I think (seems abit backwards but is to release tied up cash)).

    Start 2 SPV companys a buying and letting one. Buy a £70k-£100k terraced house and rennovate. Purchase on a 1 year fixed 80% LTV mortgage which would mean £14k-20k spent. Rennovation and fees would be around £6-10k adding around £10-15k to the value.  

    Total spend would be £20k-£30k. New value would be £85k-£110k. This means I am left with;

    -£120k-£130k in my pot

    -On paper profit of £10k-£15k

    -When 1yr fixed term is up remortgage again at 80% (possibly 85%) to gain access to stored sum of £17k-£22k (at 80% LTV with no capital gains inc).

    -with 5% cap gains would access £21.25k-£27.5k

    So with 1 years capital gains of 5% (hopefully) adding value through rennovation should hopefully give me a rental property with a cashflow of around £300 pcm pretty much for free.

    The only negative to this method is it's going to eat away at my pot pretty quickly so I will simulataneously rennovate a property which I will buy cash for around £80k-£100k and flip for a quick £15k- £30k profit depending on whats available on the market at the time. This profit will fund my next BTL and recyle the rest of the money into another flip.

    Any fine tuning, suggestions or critics welcome Smile


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    I had a quick check on Mortgages  available to Ltd Co

    85%  are very few and far between if any ???

    I am not a Mortgage broker so I would seek advice on this aspect

    Precise do a 80% LTV but I would say you should work on 75% to be safe

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    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 was basically in this position in 2015 having £150k to invest.

    I bought a property for £140k and did 10k of works to it (a lot of which I did myself so would have normally costed more).

    I got it valued at 280k recently so quite the uplift (helped that I bought it BMV and in an area with rising prices). I rent it out for around 16k per annum (over 10% yield on purchase price and refurb costs).

    This has been a great way to supplement my income as I am self-employed and money can vary month to month from my job. I am not planning to take any equity out of this purchase and I am going to hold it for long term.

    It is nice to be a cash buyer as I am not currently effected by tax changes etc. To expand I am saving for a deposit to buy another BTL or maybe a mixed use property within a company structure. I am a bit conflicted whether to use an interest-only mortgage (for income, still feel uneasy about possibility of negative equity) or a repayment mortgage (for a retirement pot and inheritance) to do so.

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    If you are a Higher Rate Tax Payer and I am

    BTL is only worth doing if you can add value or you are expecting capital growth

    If you only doing BTL and your borrowing money I would look else where ??

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    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.


    Really good thread and discussion I have answered the OP question last after some context. For disclosure I am an IFA & mortgage broker with 17 years experience these are my personal thoughts and not financial advice.

    The way I view things in terms of a base financial plan is to look to build assets (property, investments, pension) so you can then withdraw a 4% income from them, I don't include my own home in the assets to generate a 4% income. 4% is a widely accepted figure that you can withdraw safely from diversified assets and let the growth replace the income taken, either taking 4% from the rent account of the property or cashing out units of investment. I am also trying to pay off the mortgage on my own home as quickly as possible. So a basic plan might be to accumulate £1m of assets and own your own home outright with no mortgage. Once this is achieved you can safely withdraw 4% = £40k p/annum and then manage your assets and make plans to pass them on to the next generation.

    Now to the OPs original question. Nobody has a crystal ball in knowing what house price growth or interest rates will be in the next 10, 20+ years. Personally my belief is that capital growth will stagnate or we could see some price drops in the next 5 years, I don't think we will see price rises like we have in the last 5 years for a long time. I could be completely wrong. For me buying a property to buy to let now with 75% gearing on a 3% mortgage is not a great investment, I could be totally wrong though and in 10 years time the price could have doubled with interest rates unchanged! nobody has a crystal ball.

    If I was investing £150k now into property I would be looking at buying a small buy to sell project where I can add value. I would be look to gear it to a maximum of 50%, so borrow another £150k of development finance. Projects where you can add a lot of value with a planning gain, eg. convert house to flats, big extensions, build house in garden. The other factor here is time, how much time is the person willing to invest. To get these opportunities the OP would have to invest a lot of time, maybe go further from their home if they live in an area where prices are high.



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    I agree with you ??

    I am a old Landlord and have been in the business over 30 years

    and since we had the introduction of new Tax hikes I have not invested in Property since 2015

    I will hold what I have because I have strong yields

    My new strategy is to invest in managed funds within ISA and my Directors Pension

    I will use this year my wife and I ISA Limits 40K  from the money  I would have saved for deposits in past years

    Being a NE investor I could buy at one time good yielding property but that time has passed

    So I will stick to my new Strategy  ISA and Pension

    I don't see any point in investing  good cash in my new company with a headline tax rate of over 50% ie Corp Tax and Dividend Tax together

    Its time to move on and learn new tricks

    Fund Managers are my choice and I am seeing some great returns all tax free

    BTL was a great investment now its a only a good investment and its a below parr investment if you are a higher rate tax payer

    Golden days are over

    You are right Stagnation is with us and it will last years the same as low interest rates

    So if you are a large landlord and you have created wealth its time to move to pastures new

    Every thing has a shelf life and BTL is now in general out of date I am sorry to say

    I invest in all sectors Europe Far East Specialist small co funds and there is good money to be made if you learn the topic

    why have arrears repairs Tenant Probs ect ect when you can hand over all the problems to a fund manager and let then do there job 

    and with govt policy which changes with the wind you cant plan long term

    Taxation and Regulation are the Death nail in BTL for higher rate tax payers








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    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 partly agree with you yes but I am aware anything can happen. I remember being convinced in 2007 that we would never see 5 year fixed mortgages go below 3.99% then look what happened. I remember hesitating to buy in London in 2005, then look what happened lol. House prices could double in the next 10 years I could be totally wrong, nobody knows imo. Personally I have 2 rentals and I am selling one which was instigated by having to evict the tenant. I would like to sell the other one after converting it into flats but I may just hold onto it for now so I am hedging my bets. As an IFA I recommend a lot of low cost multi-asset funds, these funds diversify across equities, bonds, property and look to return 4 to 8% per annum depending on the risk profile of the investor. For me personally I don't like the hassle factor of rentals but then I have just been through an eviction process and represented myself in court so i am still a bit bruised. The thought of 'getting a few HMOs' fills me with dread, i know the yields are higher but the hassle and rental voids unless you are in a prime area must be a bind. A lot of this comes down to time and if you have a day job/career or business to run. For example if I had £150k and no other business or job then and I decided to do property full time then I would be looking at buy to sell development projects and build from there. On the other hand if I had a good job with career prospects and expected income progression I would look for a more passive investment which could be a mix of buy to let and ISA investing. i have learnt over time that many questions have no right answer, only choices. Some of these choices are bad ones but there can be many good ones.

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    Why are you bruised by an eviction process!?

    RGI ever heard of it!?

    No bruising occurs at all

    All for £89

    Perhaps when you invested you didn't consider rent defaulting tenants and choose the correct investment property which would attract tenants who could qualify for RGI.

    You are bruised because you made a bad business decision.

    So rather than being put off by your bad business decision why not just carry on using the RGI strategy to avoid any future bruising!!?

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    wow you are rude. Yes I have heard of RGI and I didn't take I can afford to self insure. I wasn't bruised financially it was purely the time/factor factor in dealing with the eviction and repairing the damage they made. You say i made a bad business decision but you don't know how much below market value I bought the property.

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    Not rude at all, just pointing out why you found yourself bruised which was unnecessary had you used RGI.

    Believe me I've been equally and far more bruised than you will ever be because I made very bad business decisions in taking on wronguns without RGI

    With I RGI I would be in rude health instead of smashed to pieces.

    You made the same bad business decisions as me.

    So next time use RGI and then you will be protected from duff tenants.

    It is irrelevant how much you bought the property for.

    You still lost a load of income for the sake of a £89 RGI policy

    Don't see the point of self insuring and taking the hit every time

    Won't take long for any BMV value to he wiped out by having to self insure several evictions.

    Rent is what we buy assets for.

    Not to self insure for the costs when tenants don't pay!!

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