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  2. I don’t think many people will have the time, inclination or knowledge how to find you through companies house but using a registered office service provided by an accountant or other provider will help you keep anonymity if that is important to you.
  3. If you have a limited company, there are filings that are uploaded to the HMRC website. If someone is willing to spend the time, then they will learn some information about your business. Have you considered buying property via your pension? It's possible to buy property inside a SSAS pension, I wrote an article about it here. As your pension is a trust, there's no disclosures on the HMRC website.
  4. Interesting OK.. Is it possible that the stated liabilities are monies that you owe yourself by way of an initial loan you made to your company? And perhaps the assets are director's loans made from your company to yourself which is effectively a loan (asset) that your company owns? I would be interested to here from anyone else who is also skeptical about this. Thanks
  5. No idea. But I can tell you none of the figures for Aalto Mortgages ltd are true. I've no debts, cash is about right, and as a services business, I've no assets to speak of save a couple of laptops. I think it's a scam frankly.
  6. Hi @russellshire, Thanks for the article. I think this is an important point to consider for anyone wanting to manage risk in their investments. In order to put some numbers to risk, it is helpful to be able to put a number to a maximum anticipated drop in prices. I would quickly caution though that the best number to arrive at might not be the average price drop from a previous recession, because there was a large range between different properties in terms of how much their value dropped. Now turning to what might happen next, I think we are in uncharted waters! As a country and as a world, current debt levels are historically high and interest rates historically low. So the economic theory goes, a government can sustain as much debt as they want as long as the economy is growing at a higher rate than they are paying interest. For the last 14 years that has been easy because we've had negative real interest rates, so the economy doesn't even need to grow in real terms to exceed the interest rate. Meanwhile, the 30 years we've had of falling real interest rates have pumped up all asset prices including property, in both real terms and nominal terms. The situation seems stable then, as long as these real rates stay low. And on top of that, today we have better mortgage health as well (no silly 100% LTV mortgages like in 2007). Of course though, nothing is ever that easy and unfortunately we have a pandemic and major regional war causing inflation higher than we have seen in many of our lifetimes. What's interesting is I think a lot of people alive today don't appreciate the potential for high inflation to cause instability and major market disruptions.I include myself in that, I'm living through this for the first time like many others. I don't think inflation in itself is necessarily going to cause a crash, in theory rents and prices will rise. Interest rates will of course rise, but as long as real interest rates remain where they are today, rents and prices will simply keep up over the long run*. This would mean no concern for unencumbered property owners as everything will balance out and good news for leveraged investors who's mortgages get smaller in real terms. So I think an important question to grapple with is whether these negative real interest rates can be sustained. To shine some light on this I found data for the last time there was an inflation spike. Here I plot data from the worldbank.org showing that the inflation spike in the 1970s was followed by a rise in real interest rates and these high real rates were sustained around 5% for the next two decades while inflation was brought under control. That's 7% higher than the real interest rates of -2% we had last year!! An important differences between then and now is that real asset prices are much higher, so they have a long way to potentially fall. A common argument is that central banks cannot raise interest rates very much at the moment because governments are carrying a lot of debt. That makes sense but I'm not sure I am convinced. Sure they don't want to raise rates if they don't have to, but their job is literally to control inflation and raising real rates above zero the only tool they have to do this. What would be worse, governments getting crippled by debt repayments or inflation spiraling out of control? My point is that interest rates might have to rise a lot more than people are expecting. This is the opposite to what happened during the 2008 financial crisis and the opposite environment to which everyone is used to operating in. This is almost certainly going to mean real price decreases, I can envisage real prices reducing more than in 2008. But for the leveraged investor, that might not be a problem as long as nominal prices hold up (which is what people normally think of when thinking of the property market). I'm concerned about this but my prediction is not for a big crash, because central banks seem to be reacting slowly. And that leaves me worried about inflation... Things could get messy! Q: What do you think, is it bizarrely real interest rate changes that is going to control nominal prices? * I like to think of this relationship between interest rates and inflation like running on a treadmill. The speed of the treadmill is inflation and the speed you walk at is the nominal interest rate. Whether you are moving forward or backward on the treadmill is the real interest rate. A tread mill speed of 1mph (eg. 1%) is quite easy to keep up with, you just stroll along and all is fine. If you are going a bit too slow you have plenty of space to react before you fall off, by adjusting your speed (AKA the real interest rate). In real terms, life is stable. Up the speed a bit to 4mph (4%) and you have less time to react, but it's still pretty stable. Now up the speed a lot to 12mph (12%). You can still keep up with inflation here by running at 12% nominal interest rates, but it's a lot less stable, you don't have much time to react to mistakes. Up the interest rates too much and you'll crash into the front (recession), go too slowly and you'll fall off the back (spiraling inflation). The treadmill in my gym doesn't go above 12mph, but there's no reason inflation couldn't go higher and higher if it sets in and real rates don't tick up.
  7. Thank you both for your for replying so quickly. That's very helpful and I hadn't realised about the accountant's address, that sounds convenient. That's interesting. I thought one could just look up on, for example, companycheck.co.uk and see the reported total value of assets, liabilities and net value of the company. I've done this myself before to check out other people... Even without an accurate asset valuation, anyone in the know would realise that for every £300k of loans you have, you're likely to have at least £100k equity. What am I misunderstanding then, does one not have to report these figures publicly? And if that's the case, why can I see them for other people on companycheck.co.uk? Thanks again!
  8. Unless you are a large limited company you dont publish anything that would confirm your net worth, however you will show which lenders have a charge over the company. Even then there are no figures published. You can use a virtual company, or as @EvolutionBlogger says, use your accountants address. Both are perfectly acceptable.
  9. Many people use their accoutnant's address for their business address. As a company director, you have certain responsibilities that you need to uphold. As such, you need to be accessible and your details need to be publicaly available.
  10. I'm thinking that any future property I purchase should be in a Ltd company structure. The only thing I don't like is that anyone would be able to look my name up online and see that I own a property investment company and how much it is worth. I don't mind a lawyer being able to find what I own, I'm just not sure I'm comfortable with my friends and colleagues being able to look me up and say "ooh they're worth £X". Not least because they might not even understand what they're looking at, and possible think I'm far wealthier than I am 😆 Furthermore, there seems to be resentment towards landlords which other investors don't have to suffer. I don't suppose there is any practical way anyway around this..? Also, for the Ltd company's registered address, I was thinking of using a 'virtual trading address' such as those that UKpostbox offer, just so I don't have to give my home address to tenants. Is this something others are using? Thanks!
  11. I do agree with you about the general feeling towards investors and second property owners, but I think that those points need to be looked at separately (second homes, serviced apartments, and personal BTL's) as each is very different and contributes in different ways to society, be it positively or negatively. Second home owners can cause big problems and destroy local economies in areas popular with holiday homes. In some locations, properties are left vacant for much of the year and only used during the peak holiday seasons, which can force local people away and create an unsustainable labour market. This is a problem for local councils and government to solve. I think that most people would agree that it's fair for second-home owners (people in the privileged position of affording another home for personal use) to shoulder a higher tax burden. Serviced apartments can cause disruption to local residents, as there is a continual turnover of people coming and going. Most people will be on holiday, maybe some are stag and hen parties for example, and so there's a higher chance of drunken or anti-social behaviour or just general noise. Obviously not always, but it happens. The main factor though, is that both serviced apartments and second homes take properties that could otherwise be used as full-time homes away from the market. The government has a responsibility to ensure that there is enough housing for everyone in the country to have a permanent home, so both of these go against that objective and I agree are likely to face heavier taxation. BTL's are very different, regardless of whether they are owned personally or via a company. The private rental sector provides a vital service that the government relies upon to ensure that there is enough housing for everyone who needs it. Without private landlords, as things stand currently with a shortage of council-owned properties, huge numbers of people would be made homeless. So even if some people may feel negatively towards landlords, they are necessary for the country to function. That's the reason why I can't see BTL being aggressively targeted, even if second homes and serviced accommodation end up facing heavier taxation. I'm not saying tax won't increase on BTL landlords, I'm just saying that there's a distinction to be made between BTL and other forms of second property ownership. I own BTL properties in both my personal name and in a company, so I have experience of the taxation on both, and how that has changed over the years. Based on my situation at the time, each way of holding properties has been more advantageous at one time or other. The properties owned personally (since before Section 24) were hit hard by the loss of mortgage interest relief when I was employed as a higher rate taxpayer. At that point, I started investing in a company, and that was much more tax efficient, paying 19% instead of 40%. However, since I left employment last year and now live off the rental income, the properties I own personally are far more tax efficient, as I have a tax-free allowance and pay only 20% on the rest. The income from properties in my company are taxed at 19% + 8.5% dividend tax to extract from the company, plus the mortgage interest I pay is far higher. Based on my situation now, personal tax would have to increase by a huge amount for a company to become more favourable. As EvolutionBlogger rightly said, the cost to move a property from one to the other once you own it is huge, so it's important to consider lots of factors before making a decision. Your current situation is obviously one, and maybe your opinions of what might happen in future with taxation and regulation is another. From my own personal experience, I can say that your goals and future plans are certainly an important consideration too, if not the most important. Chris (www.fintentional.co.uk)
  12. It is an interesting talking. Ultimately you do have to speculate at some point, and take opinions about what will happen in the future. It's what makes life fun! My personal view is that atmosphere around 2nd home owners, serviced apartments and personally owned buy to lets is toxic. The Government is going to be coming back for more tax rises. For that reason, I wouldn't go anywhere near personally owned property. Taxes are already very high for personal property. I know many people that have personally owned property. They getting whacked with taxes at 40%/45%. But they can't move the property into a ltd co, as that would attract CGT and SDLT.
  13. Just been listening to Rob & Rob's podcast this week and you mention a 'Buy now pay later' property strategy - Are you able to provide more information? Thanks, Tracy
  14. Last week
  15. Cheers Mark. I was thinking mortgage, stamp duty, legal fees. Also ongoing mortgage costs and service charge. My idea is to get a picture of how much this purchase has truly cost me over this period. Then I can contrast it with renting or work out whether it’s been long enough that I can buy a new place - because stamp duty was quite a hit. So I need to wait a couple of years for it to even out.
  16. Hi Andy, You are most welcome. With £350k to invest, a monthly profit of £1000+ would be easily achievable, without compromising on capital growth potential. You're in a great position and have lots of options. Ultimately, you should be able to reach your goal and enjoy your retirement abroad without taking too many risks. I'll be happy to have a chat to talk through your options and guide you in the right direction when the time comes. Have a great time in Cyprus! Chris (www.fintentional.co.uk)
  17. I am overwhelmed with the responses thank you all so much … I am flying to Cyprus tomorrow on a one way ticket I plan to stay for 2 months or so as I want to have a think about if this is the right move for me and have a good look around. The house I currently live in will be on the market by December and after all out goings I will have a total of 350k my plan is to invest all of the money in uk and rent in Cyprus as I have family over there and I have dual citizenship . I will need a minimum of £1000 a month from rents coming in to help support me but I also have my eye on capital growth .. CHRIS Thanks for offering me a free call I will take you up on that once I am back in uk and have decided if Cyprus is where I will be moving too and everyone else thank you all.. MARK total return formula was also very helpful .. 🙂
  18. It's an interesting perspective, EvolutionBlogger. I agree that there's no right or wrong answer here because there are so many unknowns. I hope that nobody makes a decision purely off the basis of what they read on a forum, but just in case they do, I think it's important to show balance. Limited Companies will be great for many investors, but they won't be right for everyone. My belief is that the government has deliberately incentivised landlords to move into Limited Companies, partly to professionalise the sector and scare off small landlords who may not always understand and comply with regulations, and partly to create more visibility for HMRC as there are estimated to be a lot of private landlords who don't declare their property income for tax purposes. Remember, limited companies used for property investment can be identified by their SIC code (and you'll need the correct SIC code to obtain a mortgage), so if any government really wanted to attack or penalise landlords, it would be very easy to raise taxes on Ltd Co investors as well. Once the majority of investors have moved to limited companies and the government need a way to raise more tax revenue, I certainly wouldn't bet against them doing this either. The rate of corporation tax has already been increased from next year for companies making over £50k in profit, so there's no reason why landlords should feel immune to tax changes just because they are in a company. . Punitive council tax increases only really affect second-home owners, not landlords, as tenants would usually pay the council tax. So unless your strategy is HMO's it shouldn't be a worry. What the government do in future is anyone's guess, I don't like to speculate on unknowns, but I do agree it's sensible to plan for worst case scenario. However, with a general shortage of quality rental stock on the market, the government needs private landlords to provide homes. Therefore although some small tax increases on landlords are generally an easy win that most of the electorate will vote for, they also can't afford to go overboard. Even if taxes were raised significantly in future, I believe there would also be some positives for professional landlords with a long-term perspective. In any scenario where taxes go up, the end result is usually less of whatever is being taxed. So if tax increases on private landlords leads to a reduction in the number of landlords in the market, this reduces supply and competition, which puts upward pressure on rents. The resulting increase in rental prices then likely makes up for any lost revenue from taxation. It also potentially leads into a period where property prices drop (or at least growth flatlines due to less buyer demand), which makes it easier to acquire a bargain and further grow your portfolio. My approach is therefore to make a decision based on what we know is the situation now, rather than what media speculation would have us believe could happen in future. The market has changed in countless ways over the years, so all any of us can do is the best thing at the time with the knowledge we have, and be ready to react if the market changes. Whatever happens, it's an interesting discussion point! Chris (www.fintentional.co.uk)
  19. Your landlord can't increase your rent unless you agree to it. You should go back to him with a counter offer, and explain what you can afford
  20. Zone 1 in London is a law to itself. Most of the property is purchased by (extremely) wealthy foreigners - who think nothing about spending £15million on a house. Since 2008, the UK has offered golden visas. If you have enough money, then the UK Government will give you a visa The house prices in zone 1 don't seem to follow any conventional rules
  21. Inheritance tax is a complex subject. There are certainly many things that you can do to mitigate and eliminate it I was making a general point, that the loan principal doesn't have to be paid back if you have a buy to let property. As long as the rent covers the mortgage costs (which it really should be), that is what is important. You can hold the investment forever
  22. £100k is a great budget in some parts of the country. It's chicken feed in other parts of the country. In the north of England, you could buy two buy to let properties with 6% yield. As properties are lower priced there, you pay far less stamp duty. Given that you want to go travelling, a hands off investment managed by an agent could be the way to go. I wrote an article on long distance property investing, there's nothing to be afraid of! I drive up on Friday night and stay the night in a hotel (~£60). Then I spend all Saturday, looking at properties In Devon, I think you guys are suffering from Londoners owning 2nd homes. You might struggle to find a decent return there
  23. My gut still says that limited companies are the way to go, even if you are moving abroad. I read this fascinating article in The Times (paywall). It describes how the The Government has turned against small time landlords and 2nd home owners. They are looking at eliminating tax relief entirely on mortgage payments. Also, councils are talking about increase council tax 4x on some landlords. There's also a good chance that the next Government is a Labour one, who will surely attack landlords. In my view, Landlords who own property in their own name are absolutely #1 in the firing line for tax rises. Thus far, limited companies haven't been attacked in the same way. There is no right or wrong answer. But my view is that limited companies are a safer bet. I would much rather own shares in a limited company, rather than own a buy to let property directly.
  24. It's so crucial to know what your goals are before making a decision, as the best thing to do is different for everyone. If your plan is to move abroad like you say, then a limited company is almost certainly a bad option. You would end up paying 19% corporation tax, plus 8.5%+ dividend tax to access your cash. Whereas if you are based overseas with no other UK income, you would be far better off buying personally and just paying 20% income tax (in fact less, because you get a tax-free personal allowance). There will also be less admin costs. However, if you are staying in the UK and intend to continue working, a limited company could be a good idea. Nobody should give you advice on this without knowing your full situation, goals, and future plans. EvolutionBlogger makes a good point that buying 3 or 4 properties instead of 2 gives you more diversification and security of cashflow. It's also generally the case that cheaper properties will produce a higher yield than higher value properties. However, that assumes that your goal is cashflow. If you don't need cashflow now, it's likely that buying fewer properties, but higher value better quality properties, will be less hassle and have more capital growth potential long-term because they are likely to be more desirable. You risk having to cover costs in the short term if you have a void period, but if you are in a position to afford that, you will make more money from growth in the long-term than you would from rent. I hope this helps to show how first knowing your goals is so important. Lots of people will give advice based upon what they do themselves and their own biases. My recommendation would be to ignore any advice unless someone has first asked what you are looking to achieve, because what works for one person won't necessarily be right for you. Chris (www.fintentional.co.uk)
  25. Service charge could be double the council tax at the top end. It shouldn't be move than that That's a rough rule of thumb that I've seen from my personal experience
  26. I would buy 3 properties rather than two. If you only have two properties, then what happens if one of the properties is empty? Half your income has gone. If you have 3 properties, or even 4. Then if one property is empty, it won't cause so much damage to your bottom line One thing I definitely suggest is to set up a ltd co. You pay corporation tax, which is normally lower than income tax. Section 24 doesn't apply. It's also easier to leave a legacy to your loved ones. I talk about the benefits of a ltd co in this article. Most new investors are opting for limited companies
  27. Hi there! Attention present advisors! I am a complete Preston novice and need help on location advice I am looking at both off plan and new build already build 1 bed apartments from £115k-£125k. Letting looks strong and fast from desk top research, I am looking close to Preston station is that a good area? Can anyone recommend good letting agents? All advice is welcomed.
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