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Buy to Let investment Properties.


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I am considering becoming a landlord but it is not definite,i am just considering do it.My son is i the proceeds of buying a flat to rent out in Southampton.This will be his first investment and i am tempted myself as it looks to give a better return than a bank account.

I am concerned at having to much money in the bank in the coming couple of years as the world is looking very shaky at the moment banking,shares and currency wise.

Maybe putting my inheritance into bricks and mortar as part of my pension portfolio is a better option and will give me a better return and a monthly income,I will have to have a mortgage again also depending on how much i put down as a deposit.It is nice not having a mortgage now so it is a big step for me to go back into debt all be it as an investment .

I have looked at shed loads of videos on you tube at being a landlord and it does not look inviting if you get a bad tenant,but rewards can be very nice.

Have any of you taken the plunge and become buy to let investors and how have you got on with it?

Please share your do's and don'ts with me,if i do not do this the tips will come in handy for my son.

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My tip is, go & see & accountancy firm that has a specialist in buy to let properties before you do anything. It will be the  best £100 - £200 or so you spend. 

The problem with common sense is, its not that common.

 

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I am concerned at having to much money in the bank in the coming couple of years as the world is looking very shaky at the moment banking,shares and currency wise..

Would those financial apocalypses also cause issues in the housing market? You could be dodging a bullet to face a cannonball.

Keith is your man to ask on here.

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Would those financial apocalypses also cause issues in the housing market? You could be dodging a bullet to face a cannonball.

Keith is your man to ask on here.

Well yes i can agree with you on your comment because of the mortgage.The mortgage could be a nightmare in a banking disaster and i could end up in trouble that way.It is difficult to protect your wealth.

Splitting up ones accumulation on wealth to minimize risk is the only way IMO, loose on one, gain on another, stagnate on another etc etc,i am doing my home work i suppose to see what i can do to protect  my family's financial future.

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Is there anything to be gained by going 50/50 in a property with your son and splitting the costs this way you avoid having to take out a mortgage?  Are you both investing in property to safeguard your cash, fair enough it's only half the return but it's also only half the outlay if you both trust each other.

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Hi HH

I own 4 properties now one we live in one the other 3 are rented out, BUT two are for my sons who are buying them and the other one has my sons partner in. So we know all the tenants.

I think the government are taking away some of the benefits on the tax side for landlords you will need to check this out.

I agree if you get a bad tenant it could be nightmare. I had composed a list of questions to ask prospective tenants ask them all the same questions and note their responses, then you have to make a call as to who you let it to.

Be careful but yes the rewards are very very good hence why I am retired!!!!

If you want any more info PM me.

Keith

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It is a tricky one as house prices are obviously a massive bubble when you compare wages to the cost of property.

But baby boomers are retiring in their droves and will be most likely using their pensions pots to gamble on the asset class that never goes down.

If the volatility in the stockmarket continues more money could find its way into property.

It is probably best not to follow the herd.

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Is there anything to be gained by going 50/50 in a property with your son and splitting the costs this way you avoid having to take out a mortgage?  Are you both investing in property to safeguard your cash, fair enough it's only half the return but it's also only half the outlay if you both trust each other.

I have proposed this idea to my son and he has not ruled out the idea,maybe we will go in together,but it is something he wanted to do on his own, which i can understand. 

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It is a tricky one as house prices are obviously a massive bubble when you compare wages to the cost of property.

But baby boomers are retiring in their droves and will be most likely using their pensions pots to gamble on the asset class that never goes down.

If the volatility in the stockmarket continues more money could find its way into property.

It is probably best not to follow the herd.

With the shares taking a hit today alternative investments might be pushed into property as you said,might have missed the boat already,with gold going up as i type at least i have some of that.

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with the possibility of interest rate rises.

I'll have reservations about going into an

investment area that I've not yet tried

before. especially at a time of potentially

high risk. the minimum realistic investment

amount is quite big. it's not like you can get

out of it quickly either. I'd rather stick to what

I know, even if I know it's likely to make me

a loss.

 

HH

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I speak from experience. I bought an apartment in Cape Verde in 2006 and the resort still hasn't opened.

If I'd waited a another couple of years and bought a property here I would be so much better off now.

And beforehand I almost bought a very nice four bed coastal property just south of Cape Town for only £40k in 2001.  :(

So this is a bit of a sore subject for me.

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I speak from experience. I bought an apartment in Cape Verde in 2006 and the resort still hasn't opened.

If I'd waited a another couple of years and bought a property here I would be so much better off now.

And beforehand I almost bought a very nice four bed coastal property just south of Cape Town for only £40k in 2001.  :(

So this is a bit of a sore subject for me.

Crikey.

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  • 2 years later...
  • 2 years later...

Just wondered if any people on this thread decided to dip their toe Into BTL after consideration?

like @Keithoil i also have 5 properties - if you do it right it can work very well but we are in unprecedented times at the moment and I actually pulled out of my 6th purchase which was due to complete. Also things have changed considerably with tax rules etc since the original post so it is a bit more of a minefield. Surprised myself that interest rates continued to fall.

I love stumbling across old threads, it is so interesting to see how things have played out in 5 years, who knows what the next five years hold!

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I have 3 - two residential flats and a commercial space below one of the flats.  One of the flats is my wife’s that we kept after we moved in together.  We run our business from the commercial space so our limited company pays rent to us and the flat above is on a standard residential let.  We were spending a lot on commercial rent before so now most of the rent paid by our company comes back to us.  It’s also only a few minutes walk from home compared to a 20 minute drive from the previous rented space so has saved more on petrol and time.

I was considering more but the change in tax rules (section 24) put me off.  Between rental income and business income/dividends I can keep us both below the higher tax bracket so that section 24 doesn’t have much of an impact.  Another property would have made that harder to do.

Its been a bumpy ride at times but overall I don’t regret it.  The profit we have made from my wife’s old flat alone has helped to pay off a large chunk of our own mortgage.  I have plans to retire early which will hopefully be easier to achieve due to the rental income.  Although I’m sure goal posts will be moved again when the government start to work out how to pay for the Covid-19 fallout 🤷‍♂️

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Thats good @Goldhooked. Any future purchases i make will be through a ltd company. This along side my own ltd company is a good way of managing income and keeping within tax thresholds. Excess money can then be put into a Sipp - which can down the line be used to buy commercial property also. 
 

Another benefit of purchasing through a Ltd company is when i want to leave the houses to my kids i can just transfer the company to them so no inheritance tax is paid. By the time this happens I’m sure we will be in a different world when it comes to BTL and ever changing gvmt policy but you can only do your best to keep up and adapt.

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  • 2 weeks later...

im in the process of changing my own property into a buy to let having moved in with my partner late last year. I put it on the market early march so did not get rented out in time before lock down. My plan is to release a chunk of money to put down as a deposit to buy another. Hopefully in the next few years I can get about 4 houses in total and eventually just work part time. Im getting a 5 year fix interest only mortgage to see me thru the current period and then look at what happens after that to remortgage.

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  • 3 weeks later...

In the UK, you need to bear in mind that many people believe, probably wrongly, that buy-to-let landlords are responsible for high house prices, and so they are the bad guys. As a result, all the political parties, including the tory governments of recent years, are adopting policies of clamping down on BTL, because it is a vote-winner. The most recent change that is coming along is that landlords will not be able to set their mortgage interest costs against their rental income before tax is calculated. This will be a huge deal in determining whether BTL is worthwhile. You could form a company and keep the property inside the company, in which case the mortgage interest becomes an operational expense of the company, but it is definitely worth getting some professional advice.

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4 hours ago, Bumble said:

The most recent change that is coming along is that landlords will not be able to set their mortgage interest costs against their rental income before tax is calculated. This will be a huge deal in determining whether BTL is worthwhile.

It’s already here.  Section 24 has been phased in over the last 4 years.  This tax year it is now fully in force.

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If/when you do buy always go through a letting agency, they protect you from bad tenants and them from bad landlords. Sometimes it can be worth getting in touch with the council just to ask if everything is up to standard or or do you need do do anything before letting out (this should be done by an agency, yet this can give an extra level of protection)and can put you in their good books before you even start.

Are you willing to 'lose' £50 a month or spend £X if anything goes wrong?

I don't rent out myself but me parents, brother and sister do.

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