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Dino V

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  • Location
  • Areas I invest in
    The north west, concentrating around Manchester
  • About me
    Working full time, but looking to be in a position to retire at 55. Whether I do or not is up to me, I just want to be able to.
    Owner of Lynn Properties. Find me on Instagram: @Lynn_Properties
  • Property investment interests
    Single lets to date. First refurb underway at the moment, so looking forward to seeing how that goes
  • My skills
    MSc in Project Management that I haven't used in a long time.
  • Interests outside property
    Personal finance, football. Oh and the family.

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  1. Have a Starling account for our limited company and really happy with them. We already had a business account and a property before transferring to them, so didn't have any issues setting it up. If it's a problem without an existing running business, try opening an account with another bank first - we had Santander for a year whilst it was free and transferred from there. It's all automatic with any direct debits etc transferred over, so not an issue for the business
  2. Considering the value of your flat has probably gone up several percent since you agreed the offer, I'd set a date for exchange of completion in reasonably short period, say next Friday. If that's not done, tell them you'll put in back on the market.
  3. The terms of the loan usually suggest they can, or can at least ask the borrower to repay enough of the loan to get back to the original LTV. But why would they want to call the loan in, assuming the borrower is still making the payments? Most likely it couldn't be repaid, as you wouldn't be able to borrow what was required, so they end up with an asset that's potentially worth less than the debt, especially when they try and dispose of it. Most BTL is now 75% LTV originally, so even though the property value may drop, it's still likely to be in excess of the loan as long as they don't disrupt the market by calling lots of loans in, so they'd still be protected if the borrower stopped making payments.
  4. Overpay for any property and you risk negative equity. The closer to the top of the market you buy, the greater the risk. My last purchase was December 2020, so I could now take a fairly hefty correction just to get back to what we paid let alone into negative equity. That doesn't mean we wouldn't buy again now, but I'm not seeing the deals at the moment so need a bit of a slowdown to make it feel worthwhile. The yield depends where you're buying and how you calculate it. Working on gross yield, as simplest assuming no mortgage, I'd be looking for at least 6%, plus any capital growth. For areas with more dubious growth prospects, I'd want 8%. That makes it worthwhile doing, especially with leverage. Might need rents to rise a bit in most areas to get back to that. Are the prospects better than a simple index fund? Maybe, maybe not. I don't choose, I invest in both as I feel that gives a more diversified portfolio. I'm also more interested in the rent than the capital growth as a future retirement income. Rent is therefore a bit smoother than stocks, so allows me to feel comfortable getting the income I'll want in times like now when the market is going through a correction. But that's where having a strategy aligned to your goals is important.
  5. Not to worry you, but the PG would be 100% of the loan - if the house was somehow worth nothing, you'd still be liable for the full mortgage. With that out of the way, how realistic are your examples? 2008 certainly shows that if you buy at the peak, you could find yourself in negative equity for quite a while - we've got a property that's still worth less than it originally sold for in 2007! Are we still on the same situation as 2007? Not currently for a number of reasons. Prices haven't reached those sorts of levels, yet, but mainly that credit is still nowhere near the same levels. Back then, you could have got a 90%+ mortgage easily and you'll still hear stories of same day mortgages for an increased value etc. We aren't anywhere near those levels of madness yet. So is there a risk with a 75% mortgage? Probably. If you bought a £200k house and it almost immediately dropped by 30%, you're in negative equity. But is that a problem? The bank could in theory enforce any clauses about maximum 75% LTV, but that would mean they'd need to know the price had dropped that far and then what - they insist you pay them £10k to reduce the LTV, you refuse, they take the property back which is now worth less than the mortgage, have to sell it, have all the associated costs and then try and get any shortfall from you?! As long as you're making the mortgage payments, are they really going to think that's a good idea? And that last bit is the key. Negative equity is only an issue if you want to either sell or remortgage to improve the rates. As long as the property has a tenant who at least covers the mortgage and other costs, there's no need to do that and you can just ride it out. The advantage of more properties is the reduced risks relating to voids. If you've got one property and no tenant, you're covering the mortgage, insurance, potentially service charge etc. If you've got ten properties and one is void, it's not a big issue. You can also have some unencumbered properties in a larger portfolio, so if needs must you can quickly sell to pay off a debt elsewhere. Remember as well you don't need to use leverage or at least to levels that make you uncomfortable. You could buy a property for cash and then there's no risk, other than potentially losing some of the capital or you could save a bigger deposit and get a 65% LTV mortgage etc.
  6. I once went to a free two day course. Still wasn't worth the money and nothing that hadn't been done by the same person on YouTube. That's bus fare I'm never getting back...
  7. There will probably be easier and cheaper ways to get to a C rating. It's not a requirement yet anyway, but start with LED bulbs everywhere; thermostat including room thermostats and; loft insulation. If that lot plus double glazing doesn't get it to a C, it's likely to be exempt if they ever bring the legislation in, as the costs would be prohibitive I'm looking forward to how they propose heat pumps on back to back terraces, or £20k of works on a £50k house. Even better if you can't evict the tenant as not their fault, but you also can't rent to them as illegal due to EPC. Guess the councils and Shelter will just have to house people themselves...
  8. Anything you can claim now is always better than longer term. Say the roof is £1k, how much will that be worth in 20 years or more? If you never sell, you'll never see the benefit. I'd question why it would be a capital expense though. It's currently a roof and will still be a roof, just with modern technology. Same as changing single glazed windows to double. We also had a flat roof replaced a couple of years ago and changed it to a pitched, tiled roof. Not sure about planning/building regs, but one of the roofers we got quotes from suggested it, so I chose not to ask... Now hopefully maintenance free for many years to come and looks so much better than any flat roof.
  9. I've got one that was part of a package bought from Rob Dix's Property Geek website about 5 years ago. It's really simple to use and throws out all the numbers in the right way for filing a return, whether personal or limited. Looking on his website, I can't see it anymore, so not sure if still available, but if he's not selling it, it would be a good resource to provide may through the University, as it was a Google sheet you took a copy of and could use in Google or Excel etc. There were also workbooks for analysing deals and refurbs etc. If you don't gett one, may be worth sending an email on his other website (propertygeek.net) to see if it's still available
  10. That's usually the simplest and cheapest way forward. Solicitor will be able to sort
  11. Everything's going to be ok... providing you're clear on a few things. The main on his what you're trying to achieve ie your goal. If you're after capital growth, Hull may not be the best area although there will be nicer parts which are more expensive and will probably grow the fastest. If you want cashflow, then Hull's probably a good place. You've got the university, so students are an option and with the port, there will always be some level of employment regardless of other businesses. As you're local, you'll know the places to avoid ie those areas you wouldn't want to be at night or leave your car parked. That's a huge advantage over someone from another city who's seen the yields but doesn't know what's good or bad. Also, avoid the cheapest areas, even if they're not the same as the worst areas, even if they yield very well. Move up a price category from that and you should still get the yield, but you'll also get better growth and you'll probably have slightly higher rent. My main recommendation would be to find a good, local letting agent and you may need some recommendations on that. A good agent isn't going to want property that's hard to let or that is likely to have problem tenants who don't pay etc. Like you, they want a tenant who stays long term and pays on time, as they get their percentage for doing very little. I've found the local, single office agents are better than the national chains as the staff seem to stay longer and everything is local rather than centralised in a different city. In terms of flat or house, either works and has pros and cons. I prefer houses but also have a flat. A 2 bed terrace will always be in demand, but if you can find a 3 bed, ideally with a garden, you've got a family home and are likely to have longer term tenants, especially if it's within the catchment area of a good school. You're looking long term, so even a bad buy will probably turn out alright. A good property doesn't even need to be that cheap - people can get obsessed about below market value, which has been very difficult recently, but even if you pay 5% too much, if it's rented out consistently for 15 years and has probably increased in value by 50%+, will you remember that you overpaid a bit?
  12. That level of base rate would take it back up to what it was during the financial crisis and that period was a low base rate. Go before that and you were generally looking at about 6%, with periods of >10%. What's my strategy? Hope I can time taking out an annuity when base rates are 10%+, as will have a comfortable pension without having to use a lot of my capital 😉 As for property, it only really affects flips if the market stalls or very low yield properties which wouldn't work at higher rates. If your plan is longer term and cashflow positive it doesn't really bother me, as higher rates just means more renters
  13. The company can repay the loan you made to it without tax, e.g. you pay in £50k, it can repay you the £50k once it has the money available. It can't pay you for your financing costs directly e.g. you're personally paying £100/month on the remortgage of your home, the company can't pay that. It could pay interest on what you loaned them, although there is tax to pay on that. You mentioned dividends and yes, the company can pay you dividends from any profit after tax, but you'd be getting that regardless of the loan.
  14. It should just be repayment of a director loan, so should be simple for your accountant to show.
  15. No, the company can't pay your personal mortgage payments related to your deposit. However, it can pay you interest on the money you've lent it. Speak to your accountant about that and you'll need to complete CT61 forms.
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