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Steve Brown

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Everything posted by Steve Brown

  1. Hi both, thank you for the information and advice. Please rest assured I am trying to get them a better return on their cash than it gets in premium bonds! I certainly wouldn't be seeking to get them to stump the up front costs, I just want to them to have a share that pays them from day one and hopefully eventually returns their capital and some. Carrie your situation sounds similar to what we are hoping to achieve and that idea is definitely something I could put to a solicitor to make sure we and they (the kids) are on solid ground. Thanks again for the help Steve
  2. Hi I am considering our next BTL purchase. Between them my children have around £10k saved from family gifts over the years, I am the trustee to their money. To improve their return and to enable our next investment purchase I would like to use their funds as part of the deposit and pay them profits accordingly. In years to come should we ever sell then of course I would wish them to profit accordingly. I understand that children cannot legally own land so am wondering how to set this up correctly. Our properties are privately owned not limited company and I have no plans to change that arrangement. Has anybody gone through a similar process? Steve
  3. You are bound to be a bit nervous, its a big deal but have some confidence as you are ahead of most. Don't get me wrong I am no millionaire but once you have bought one, the rest get easier! We bought one in lockdown and frankly it had more problems than any I have had before, it was a bit fraught but its sorted now, my cashflow was tight for a few months but now all settling down back into regular cash flow. The more you have the less impactive a problem is. Good luck!
  4. I think there is a good point here - next years crash could become the self fulfilling property. I don't know if it will happen or not but I think most evidence is that whether it does or not there will be recovery and in the meantime cash-flow will still be there. For me that means keep looking for good deals and buy when appropriate.
  5. Hi Mara Yes we did buy the property, seems like a long time ago now, we still have it. As the sellers were friends of our family we were able to do the transaction in pounds sterling which suited them as they were returning to the UK, it was also a fairly relaxed process for that reason too. We had a solicitor (abogado) who was recommended to us and he was very good. The whole process was pretty efficient and there were no problems. There were some documents we needed to sign which we were going to do whilst on a trip over there but for reasons I forget that could not happen, so we had to find a "notary public" in the UK who was able to officially witness our signatures and certify them as if they had been done in a Spanish legal office. A small extra expense but nowhere near as pricey as an extra trip to Spain! Since then we have rented it out a bit using a holiday lets site, and also by word of mouth to friends and friends of friends. Clearly this year we haven't been able to do so, and we haven't been out there ourselves either. Fortunately my parents in law live nearby so can keep an eye on it for us. My main advice to you would be: 1) Get recommendations for a solicitor and make sure they can deal with you in your preferred language. 2) Watch out that the particulars are accurate - a year after we bought our house the local authority charged us extra property tax as their satellite imagery indicated we had more space than declared by way of a rooftop balcony. It would have cost more to get an architect to prove them wrong so we just paid the extra. 3) Take asking prices with a big pinch of salt, I think a lot of advertised prices are somewhat inflated for the foreign buyer market. Pay what you think its worth not what they are asking for! 4) Try and stay for some time in the area you think you are going to buy - we like our little place but the area is much noisier at night than we expected. Its harder to get the feel for an area you haven't lived in or visited regularly. Good luck with finding a place. Steve
  6. Hi Nicholas_B Personally I am not waiting for a house drop and don't agree that we all are. I agreed a purchase at the start of 2020 which at that time looked like it should go through quickly. It is a relatively straightforward refurb. A couple of potential concerns arose from the survey which got resolved by a builder I know but by the time that was done the lockdown kicked in. The upshot of this was that the trades I had lined up to get some work done could not proceed and that the solicitors opted to pend all their transactions to reduce the risk of exchanges taking place that could not then complete due to banking problems (which as far as I know haven't materialised). How did I feel about this? Frankly whilst I remain perfectly happy to buy the house, I am glad that it is now delayed. The alternative is that I would have completed and then suffered a much longer void than planned for waiting for trades to be able to get up and running and also for potential tenants to be able to start looking / applying. Has it crossed my mind that I should renegotiate the price I am going to pay? Yes of course it has. If when the lockdown starts to lift it becomes apparent that there has been a major price drop then I daresay I will try to renegotiate, but if it looks like things are going to recover within a few months then to be honest I remain happy with the price agreed. An imperfect deal is better than the perfect deal that never comes As soon as restrictions begin lifting, short of a major change in the property market I will be looking to complete the deal and crack on so that i can get the new deal added on to my long term portfolio. Somewhere once I read that what you do is less important than making sure you do it quickly, action beats reaction. Steve
  7. Richard your response is a really interesting and thought provoking account - many thanks. Steve
  8. I don't agree that additional taxation on BTL market is likely to be a government target after this. I think that time will show that renters get more heavily hit by the economic impact of the pandemic, as many (not all of course) renters are not as financially stable as home owners with less cash in the bank and less scope to borrow. They are therefore dependant on being able to rent their home and accordingly if that market is made more difficult for landlords then it becomes more difficult for tenants. Maybe the government would counterbalance that with an actual increase in social housing provision which I personally think would be a good thing to achieve some better balance but I don't see this as likely at this time, regardless of the colour of the government. I think it is likely that house prices will show some variation attributable to this pandemic, probably downward but I think this will be fairly brief due to the underlying fact that there is insufficient stock out there. Steve
  9. I think it is very prudent to consider that there may be good opportunities coming up. However bear in mind that if you take a personal loan, this will be a credit commitment that has to be declared when applying for a mortgage. This could reduce the lenders view of your ability to afford the mortgage and therefore hamper you in getting it in the first place. Also in terms of leveraging whilst this strategy may help avoid the property itself being over leveraged, and so not increase the chance of negative equity, remember that if you take a personal loan to use as a deposit and then get a mortgage you are in effect at that moment buying the house at 100% LTV. Worth the risk? Maybe, maybe not. Good luck Steve
  10. Hi Conrad Sorry for not coming back to you sooner, I appreciate the advice and lines of enquiry to follow. I satisfied myself with the title in the end, I think as you say it was a case of things getting lost in translation at some point in the distant past. I have decided not to proceed with the property anyway as overall its looking a bigger job than I can take on for now but I will watch it with interest when it is auctioned (again)! All the best Steve
  11. Hi A couple of years ago I pulled out of a BTL purchase because of a serious roof problem however before that was discovered we were aware there was potentially some asbestos as the property was heavy on the art ceilings. It was never confirmed and I never got as far as a survey for it as the vendors would not agree my new offer based on the roof problem. I am viewing a property next week that I can see has polystyrene look ceiling tiles and I am aware from the previous aborted purchase that these can be a source of asbestos too. The property will need modernising so there is some chance of disturbing any asbestos containing surfaces. Does anyone have experience of the very approximate costs of asbestos removal for say artex ceilings / tiles? I literally have no idea where to start when factoring it in. Thank you Steve
  12. Hi, I have been looking at a few upcoming properties at auction recently. I have noticed on three properties with one auctioneer that each has a special conditions contract which I understand is quite common. However each of these with this particular auctioneer includes a requirement for the buyer to pay the seller £3000 towards their own legal fees and £9,999 as a "buyers premium", for which invoices would not be provided for either! Is this normal / typical? Steve
  13. Hi Despite the rental being very profitable, to pass the stress testing rules I think you would need to be achieving rent of at least £930. You might get a lower stress test if you have a 5 year product but this may be counterbalanced that as a higher rate tax payer this may also take you into more extreme stress testing. You are not far off it with a £900 rent of course so a bit of tweaking with the product might get you there. I think you would be better off reinvesting in a more profitable rental.
  14. Not all tenants would want 3 years minimum commitment, some are bound to like shorter tenancies as they might be on a temporary contract in the area or renting for a short period due to a major life change such as relocation / divorce or whatever. Should they be forced on to a 3 year tenancy? I say not. They may be more incentivised to buy if this becomes the requirement, which could drive up demand and prices and would be counter to the presumed aim. I get that a longer contract could give tenants the security against a S21 eviction which families for example might appreciate. Perhaps a better change would be to give tenants the option of opting for a 3 year tenancy but with the option for the landlord to decline this in certain circumstances, for example the intention to sell earlier than this to close the mortgage or because the landlord is living abroad / another part of the country for a fixed period after which they wish to take possession back for their own residence. I have families who rent for me that started on a 12 month AST 5 years ago which has then just rolled into a monthly AST. They've never asked to renew it. They get their confidence we won't S21 them from being told by us that we have no plans to sell up or evict them. Its a relationship that builds trust. From my point of view as a landlord, I want good tenants that stay a long time. If they are non payers or damaging the property or breaching the contract then regardless of how long the AST is I will be going for eviction. As far as I know nobody is advocating the removal of the right to remove for breaches. If on the other hand I have other no blame reasons why I need to evict the tenants, for example selling up or taking up residence in the property myself then this is something I would just work into my long term plan. S
  15. Hi Even though this is your first BTL purchase, I would like to encourage you to follow your instincts somewhat. By getting to the stage you have you are more property savvy than 99% of the population. You are fearful / doubtful about the quality of the tenant. It could well be that they haven't paid rent in months, but that being the case is it likely that they would have kept the place immaculate in the interim? Or that they would temporarily allow the landlord they are presumably in dispute with to come in and spruce it up for a days worth of viewings. I personally think that is unlikely though of course not impossible. I also think it unlikely that if the landlord was having problems with them that they would sell to shake off the problem, unless the sale was going to be very easy and make them a significant profit. Do you know how long your sellers have owned the property? Maybe if they have inherited it some time ago they will be sitting on a good profit, but otherwise it might be more trouble than its worth to sell compared with evicting their tenant. (£3 spent with the land registry will tell you when they obtained it and how much they paid) On the other hand there could be a hundred other reasons why they are selling, none of which relate to their unfortunate tenants. May I suggest that you enquire as to whether the tenants would like to remain. If they do then instruct your solicitor to request the records of the credit and character referencing work that was done on the tenants when they moved in, to include all the other associated papers for example checking their right to rent and that the deposit was properly placed with a protection scheme. Your buyer should see it as a bonus that he or she is also selling you good quality sit in tenant and therefore be keen to provide all that. If that stuff cannot be provided then seek vacant possession but by all means invite the tenants to apply to whichever agent you choose to use to let it out (make it a different one to the current one I'd suggest). If they pass the new agents referencing process then they are in the same position as any other new tenants but you have the advantage of at least knowing that on the day of their viewing it was in good order which is some intel that they may be good eggs. I have been letting a small number of properties for about 8 years. In that time I have had no nightmare scenarios. I have had one tenant who went off the rails a bit and didn't leave the place great but it was a quick clean and repaint job, no worse than that. One of my current tenants has proved to be a bit mishap prone and this has caused me a bit of work and one significant insurance claim but on the whole even that tenant has been fairly trouble free. Overall tenants are normal people looking for a quiet life, good agents with a through vetting process will generally have a good success rate at filtering out trouble. Every tenant is however something of a gamble, this is a part of the business you have to accept. Good luck! Steve
  16. Hi all, Thanks for your information and advice. I have checked the title deeds for the property I think is being sold and the one next door. They are definitely separate properties with land registry but for some reason the one being sold soon does include the number of the neighbouring one, e.g. instead of "10 High Street" it says"10-12" High Street but the entry for 12 High Street is simply "12 High Street". I suspect its a hangover from when they were connected to each other, maybe they were one entry at that time. There are some shared access covenants and covenants about the party wall as its terraced housing so probably legit and maybe some kind of quirk. Thanks all Steve
  17. Hi, I have seen a property that is coming up for auction soon. It is an end terrace. The property was previously up for auction last month as was the house next door, which I assume was the same owner. Both sold at last months auction but the end terrace has come back up for auction again. It is not yet clear why but it is a total renovation required so maybe finance issue. Or maybe to do with the deed. On some prelim work I have done there is apparently only one title deed for the end terrace and the adjacent one (which sold last month and to my knowledge has not fallen through). I am also aware that some years ago when my partner was looking for a house she viewed the property and there was a shared door between the two houses, reinforcing that it has been owned by the same person. I am assuming that steps have been taken to separate the titles of the two properties (otherwise how could they be sold individually) but it appears that land registry still has it as one property. Is there a time lag between splitting a title and it becoming clear that this is the case on LR searches? The advert for the one that has come back to market is definitely only for the end terrace, they are not describing the adjacent mid as included. The legal pack has not yet been published online and I await it eagerly. Anybody have any ideas what could be going on here? Steve
  18. Sounds like a fairly specialist area to me, have you searched for the answer online and/or sought legal advice?
  19. Sounds like a noble aim, good luck! It is very disturbing how many homeless people there are in major cities these days. I live near Leicester myself and see this there. I am aware that many publicly funded hostels were closed in the last 9 years and this has to be a factor, Leicester certainly struggled with this. Whatever brought those, often challenging, people to their situation, it is clear that there are few escape routes for them, very much a tragedy being played out on the streets. A lot of cities seem to commemorate wealthy benefactors from decades / centuries ago who helped the poor, maybe we need to find this kind of conscience again.
  20. Hi Tam I know nothing about PBSA. Why not keep your life a bit more simple and buy a straightforward BTL? Find a property - make sure its of a standard suitable to rent - get it rented out for a modest profit - treat your tenant well - repeat. You'll learn lots, and be in a better place to assess PBSA or other areas then. Steve
  21. Well done for getting started, thats what its all about, taking some action. There is loads of great learning material out there, who knows where to start first but for what it is worth I am currently reading "RESET: HOW TO RESTART YOUR LIFE AND GET F.U. MONEY: THE UNCONVENTIONAL EARLY RETIREMENT PLAN FOR MIDLIFE CAREERISTS WHO WANT TO BE HAPPY". I am only 20% through it but like a lot of these books it does provoke some thought about what you want out of life and sets some reminders about why many of us (me) are in the rut of employed work to get by. The best line in it so far is the idea of finding your meaning in life by asking yourself what problems you couldn't live without (i.e. devote yourself to these). Not heard that insight before. I would also recommend The Entrepreneur Revolution. I think there is a bit of an industry around these types of books and some regurgitation of material but despite this I do tend to get one or two nuggets out of them so what harm can they do? Kindle Unlimited gives access to a wide library for £7.99 a month - thats pretty good if you use it.
  22. The podcasts produced by the people that run this forum are very informative and you would do well to start there. Steve
  23. Hi folks, We are looking to move residential property. I was initially very hopeful that I could use a BTL mortgage on our current house to keep it on as a rental and purchase the new house using existing cash for a deposit. It looks as though the stress test rules will prevent this however as an individual. The cash flow however would be positive and in my view with plenty of breathing space for interest rate increase. I am exploring whether the stress test would be easier to pass if I formed a limited company to buy our house. I wasn't going to do this previously as we don't have enough properties in our portfolio to warrant this but I would consider it as a means to an end to avoid selling the house as I think if there is a chance to keep it on as a rental then I would like to. I know that the company would have to pay stamp duty but then we would have done so at the higher rate as individuals anyway. I daresay the mortgage rates will be higher too (waiting to hear from the broker) but does anyone know what the other costs are like compared to a private individual, e.g. legal costs / arrangement fees etc? Also has anyone else had experience of this sort of process to avoid selling a house with the potential to rent? Steve
  24. Hi all, A friend of mine is looking at a deal which we've been discussing. It is a 2 bed terraced house in a good location, with a typical terraced house garden. straightforward so far. However at the end of the garden it leads out into a 10 metre by 10 metre plot which forms part of the same property. This is currently an overgrown area that has previously been used for car storage, repairs and general storage. It is apparently an Aladin's cave of bric a brac but that is by the by. The 10x10 plot would be big enough and ideally placed to tidy up and rent out parking spaces to the neighbours - parking is very limited in the area as there is likely to be good update. He would be buying using mortgage. I have suggested that during the sale process he should consider getting the land split in two as I imagine that mortgage companies would be reluctant to have a BTL and a commercial use on the same property and therefore the same risk. By splitting it he may also be able to buy the 10 x 10 plot for cash and just get mortgage on the house itself. Does anyone have any experience of a plot of this type and of how mortgage companies view them or what restrictions if any they place on them? Thank you Steve
  25. Hi I currently have an offer accepted on a house that we will rent out. After our initial offer was agreed the survey indicated a problem with the roof and only agreed to mortgage up to a slightly lower amount (difference of £2500). The vendors agreed to reduce the price by that amount however as the survey was quite vague I arranged for a roofer to inspect and advise what is needed. It appears that the problem is quite extensive and long story cut short the cost of repair will be closer to the region of £6000 (the whole roof will be removed and the rafters replaced and the purlins replaced and remounted. I think that the vendor is likely to accept an extra reduction however in terms of my own cash flow I don't think I will be able to find the extra cash for the new value of the repair. We are buying with a mortgage at 75% so even if the sale price is reduced by £4000 this only release me an extra £1000. So my question is whether it is possible / permissible to have a scenario where an asking price remains the purchase price but the contract stipulates cash back to the buyer to an agreed amount - in this case £4000. So the mortgage company would have lent the money and I get some back to allow me to do the work. My only other alternatives will be to borrow from elsewhere to get the work done, which was not in my plan or to offer a severely reduced amount so that the reduction is big enough to leave me with the full extra £4000 in my pocket for the works. I might get away with that of course but it would be a significant reduction in the asking price as its only a 2 bed terrace so they may not fancy that. And of course option 3 is abandon the purchase. The vendors are not willing to get the work done themselves before selling. Thanks for your advice, Steve
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