X

Sign Up

or

By signing up I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Sign Up

Sign Up With Facebook, Twitter, or Google

or


By signing up, I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Log In

or


Don't have an account? Sign Up

Forgot Password

To reset your password just enter the email address you registered with and we'll send you a link to access a new password.


Already a PT member? Log In

Don't have an account? Sign Up

  • Buy-to-Let

    What to do with my £130K equity?

    I'm aged 39 and have £100k equity in our family home and £30k in a buy-to-let.

    What would you do in that situation?

    We could invest it in our family business. Do banks let you do that? Release equity and invest the cash in our business (buying more stock to sell)

    Or can we use it to buy 2 buy-to-let houses with £60k deposit each. In my area a 2-bed terrace is £110,000 so that would be around 50% deposit.

    What would you do and why?

    0
    0

    Hi Mark,

    Welcome to the tribe!

    That's a very difficult question to answer without knowing more about your personal situation, mainly in terms of what you want to achieve by investing and also your financial situation.

    However, roughly speaking, it is generally recommended that you build a business first and then invest the profits.

    I would highly recommend that your first action is to sit down with a cuppa and watch our "Financial Fundamentals" series.  Map out where YOU are with this, see where the gaps are, and then use that to bring clarity to your direction.



    Monday -  Taking responsibility for your financial future and how to do that

    Tuesday -  Get educated!

    Wednesday - Create your "income engine" and then turbo charge it!

    Thursday -  Build your "wealth pyramid" to future-proof your wealth.

    Friday - Protect your assets within a "wealth fortress".

    Having done that, then speak to a reputable mortgage broker like the team at Property Tribes Financial Services on 01206 654444 to determine how much of your equity you can access, because it won't be the full £130K due to loan to value restrictions.  Once you know how much funds you have to play with that will also bring clarity to what can be achieved in reality.

    Once you have been through the above, then come back here and give a bit more information about what you want to achieve, and the total cash starting point, and then more prescriptive advice can be offered.

    ​I hope that helps for starters?

    0
    0

    Lots of very simple questions there and lots of complicated answers?  Oh - If  only it was so easy !!

    For me to give you answers to your questions It would take about an hour to meet you face to face and get to know your background

    BTL is complicated now Taxation has changed

    You need to sit down with someone in your area for a long chat

    You run a business so your first port of call should be your Accountant or Tax advisor - depending on what they say, I would then move forward

    A forum can fill in the answers to issues you have after you have your Tax strategy

    But you really need professional advice  to start with ....

    0
    0

    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.


    Hi Legoode,

    Welcome to Property Tribes! It sounds like you have 2 very viable options that you could do. Is there one you would want to do more or would suit your current needs? Both are great and would be good for you in the long run. As others have said everyone’s personal circumstances are different so what you do isn’t necessarily what someone else would do.

    I hope you are successful in whatever you do next and I’m looking forward to seeing what you decide on.

    0
    1

    Thanks everyone. Really good replies.

    I think the tax situation is enough to put me off jumping into another buy to let.

    Pumping as much cash as possible into a profitable business seems like my best bet. Grow the business, invest the nest egg later.  But do you know if I can release the equity from my house for the purpose of investing in our business? I'll ask my mortgage provider that one!

    Thanks again Smile

    1
    0

    at 39 I would look at your pension

    Lots of very good Tax allowances

    You may like to read a book Called Pension Magic

    You can draw pension income at age 55 so its just over 15 years which will pass quick

    best of luck

    DL

    0
    0

    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.


    Just a little tip when you read it forget the word Pension

    Think of it as your own tax free company

    Money goes in Tax Free or you claim tax back

    It will grow 100% Tax Free no CGT NO INCOME TAX NO CORPORATION TAX

    It can be very low fees to run it

    If you use it carefully the Funds in your Pension can avoid IHT and you can pass it on to anyone you like just about tax free

    The more you learn the more you will see advantages

    Pensions are now just part of my wealth building but its all tax free if you extract funds wisely at age 55

    and If you ever got into Business problems its ring fenced from all debts

    LOads of Ticks



    1
    0

    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.


    Interesting.

    I worked for an  American Company the founder of which had a principle of OPM, other peoples money!

    For example assuming that the property values are not going to fall to borrow a million at 2% or something and make a return of 7% gives you an income of 50k crudely. To borrow a million you need to gear up your borrowing to cover that finance.

    A simple way we have used was to buy a property in poor condition and do it up to a pretty good standard and them sell it into our own Ltd. at a much increased value. A 25% deposit  for theB2L mortgage gave us a profit for the next deposit.  We had 1% stamp duty followed by 3% into the limited but the profit more ths covered that and multi share owndership spread the CGT. We are fortunate to have some building skills making the doing up pretty cost effecient.

    I would say the secret is maximising the return, sounds simple but it is essntial, too many landlords just accept the status quo and miss the chance to enhance income.

    0
    0

    The problem with BTL now is fees and costs if your buying with a mortgage via a company

    even a modest 3 bed 80k house cost around 5k in fees

    I just use 8% yeild now If I make that fig I Buy

    If I cant get 8% I know I am paying over the top

    Just be very picky what you buy




    0
    0

    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.


    How do you calculate the 8% return? What is the sum?

    0
    0