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  • Buy-to-Let

    To sell or not to sell that is the question..

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    Hi Sks.


    I don't have answers for you of what you should do. It sounds to me like your under a lot of pressure and maybe you need to alleviate some of it. From a financial point, you need to seek professional advice to ensure you exit in an efficient way. CGT may apply if you sell. Remember you have yearly allowances so sell in a timely fashion. On the personal front, maybe look to reduce some of the pressure. Sorry to be vague but individual circumstances make it hard to e specific.


    good luck

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    Dear Phil, thank you. I agree, as someone on the outside I feel you have read between the lines. Lots of pressure, lots of decisions, life does not get any easier! Also not much help from anyone.

    Thinking I really need to reassess my priorities, seeking sound advice, however, the ultimate decision rests with me I guess.

    My advice to anyone would be to keep life as simple as possible.

    As the song says, "It's later than you think"

    Thanks again.

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    sks,

    Without knowing your personal circumstances it would be hard to know what the best course of action should be. However, as a general view maybe sell a couple of the properties and retain the other 3.

    Know one knows how things will play out and you can only assume based on past events. Maybe S24 will be modified in some way in the future following a shortage of properties to let or maybe there will be some kind of landlord incentives introduced. Would this change things for you?

    Prices in the South East are softening, but elsewhere seem to be holding up OK. Where are your properties? I don't think IMO that outside the SE prices would fall enough to make it a viable option to sell and buy back in 4-5 years time.

    I don't think interest rates will increase more than 2% for many years as the debt levels in the country are ridiculous and would result in economic death. I think inflation will steady too as spending falls.

    Most people are underestimating how much debt people are in and even some of those who look to be doing OK are just about getting by at the moment!

    By selling 2 and keeping 3 you are still in the game and could then weather any tough times ahead in the short/medium term.

    Would be good to pass on some cash generating assets to your children too - that in itself makes it worthwhile.

    Good luck anyhow.




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    If it is any consolation, you are not the only one having this dilemma!  It has played on my mind for a couple of years now and I am at the same point as you, keep or sell?

    i am in a bit deeper than you with more than 60 properties all high yielding but lower end with not much Capital appreciation.  All have been great for 15 years and the income has been good and would have continued were it not for S24!

    I asked my accountant to run my 16/17 figures taking into account S24 at full flow and my tax bill went from £18k to £86k leaving a £12k profit.  Another interest  rate hike could see me housing 60 people for no return.  What do I do????

    I feel I have created a monster which has turned on me so I need to take action but getting any real help seems impossible due to nobody knowing how to solve it.  I have spoke to a dozen accountants who have not came up with anything revolutionary which is understandable as there is no solution.c

    Yes, I could incorporate but that would be very costly and the S24 rules applied to companies to shut that loophole.  Getting the money out of the ltd co is also costly so “swings and roundabouts”. Leaving it in the company seems pointless but this is all guessing as the rules may be changed.

    I have considered the BICT route but worry that there is very little support for it on this forum.

    I think my only option is to offload a good chunk of them which breaks my heart - I told all my tenant: if they paid their rent in full and on time, they would have a house for life!  Now I am having to go back on my word which is just not me.

    I think I will end up selling 40 to 50, pay off the remaining 10 or 20 then live off the income which should see us (my wife & I own them all in a partnership) under the best thresholds and having a less stressful life.  Life was not stressful before S24 as all our flats are managed.

    If anyone knows of an escape route (preferably with sun) please let me know - we would honestly leave the country if it would solve our problems.

    Doing nothing is not an option so we must ruin most of our DSS families lives needlessly.  The last few we have sold has been to investors - We are investors, we evict a family then an investor buys it and puts in another family.  Only reason I can see for this is for the government to collect the CGT.

    What a mess - I can see people jumping of bridges because of this in the future.

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    Hi maiken

    I empathise with you. Before you make rash decisions, I would strong encourage you to have a word with Mark Alexander who run property 118. He has excellent solutions around your challenges, delivered in conjunction with Cotsworld Barristers. Good luck.

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    Yes its so hard to know what moves to make if any.

    I had decided I wasnt going to invest further and just leave the funds in the bank until the situation becomes clearer.

    Then a few days ago a house appeared on the market that seems to tick all my boxes ( 3 bed semi half renovated and a bit cheap) and is just around the corner so I couldnt help myself and I went to look at it.

    According to the agent it had attracted eleven viewings including myself in its first two days, ten of which were investors and the other was a young couple with small kids.

    They arrived all bright eyed and hopeful just as I was leaving and I hope they succeed in getting it.

    I'm not going to pursue it unless the agent approaches me first but I doubt that will happen as the seller (an alcohol dependent jaded electrician on his third divorce) says the agent intends to go for for best and final offers etc.

    The observation of note is the alleged ratio of investors to first time buyers, interesting huh.

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    Yes contradicts the 80% drop in BTL investment

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    Very interesting Layla, I know, it is hard to resist sometime, but I share your sentiment about the couple hopefully buying that house. With time I think we all change for the better.

    I just sold one property (to a family) that was sitting empty for 8 months, as the yield was not worth the hassle, time and energy put in. Was a big relief in the end.

    Investors wouldn't touch it by the way.

    I decided to stomach the cgt & redemption penalty for peace of mind. Was a good move.

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    That one sale was in 2017/18 tax year so another one post 5/4/2018 would again attract £11300 nil rate band for CGT - or 2 lots if spouse is joint owner of BTLs

    You do not say which location BTLs are in - and if little CG expected just look at net income and compare with what you could get in say a 5 yr fixed rate deposit with less hassle.


    What would you net on average from sale of the BTLs?

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    To the OP, only you will know what is right for your situation. If the properties aren't working out financially, then by all means sell, but depending on where you/they are in the UK they may not be easy to buy again at a similar price to what you paid?

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