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dino v

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  1. Got a similar situation - tenant in a house we bought who'd already been there a few years. Rent was a bit below market rate, but then house was a bit tatty but difficult to do work with a tenant in it. As it was, they asked and have decorated it themselves. We have raised the rent once and will do again, although will probably leave it beyond the 12 months as they were furloughed for a lot of this year but still paid the rent on time (with the exception of an initial holiday when they were laid off before furlough, but they're paying that back). They're an excellent tenant, have probably added 10% to the value of the property with the work they've done to it and clearly want to stay long term. I'm therefore happy to make sure the rent stays below the market rate for the area, as just a change over of tenant would cost me at least a year's rent increase with a void, letting agent fees etc. If we charge them close to market rent, they could consider what else is in the market with that larger bedroom they've wanted etc. We're not a charity, we need to make a profit and it's in the tenant's interest that we do - if we can't pay the mortgage, or afford to fix a problem, their life is likely to be affected more than mine. But they're a good 'customer' and I'll do what I can to keep them, as that's a lot cheaper in the long run than constantly having to attract someone new.
  2. When people talk about jobs moving abroad or to AI, it's usually things like customer service - the telesales type jobs that have been moving for years. Don't want to belittle those jobs, but ones that generally do not require years of professional training are the ones that can easily be moved to cheaper labour markets. What I've been seeing for the last 10 years at least is things like civil engineering design jobs moving to the same labour markets, so work by chartered engineers being done by similarly qualified (& often better qualified) engineers abroad. That means things like HS2, motorways, airports etc being designed abroad. Not completely, but the percentage is increasing and now 25%+ of that work is the norm. What we're now seeing is that that simplest parts of those jobs are starting to move to AI. That's a small percentage for now, but will obviously increase. AI will initially take the work that's gone to cheaper labour markets, but I'd expect it'll take work from UK based staff as well. I would expect similar is happening in other industries, particularly for any job that's office based. If you're not hands on e.g. a dentist or a bricklayer, why can't your job be done elsewhere or by AI? As ever, as one type of job disappears, other jobs will appear. Maybe they'll be city centre office based as well, but for companies setting up now, will they find other ways to work - mainly remotely, but with a weekly meet in a shared office space, or even a reimagined coffee shop.
  3. Remember, you can accrue the expenses every year, regardless of whether you make a profit or not. You don't even need to have bought a property - mileage doing viewings is claimable, for instance. Dividends have to come out of profits, but the rest are legitimate business expenses. And as losses roll into the next year, the tax savings will build up for when you are profitable.
  4. Just to clarify something that Haf said, it's corporation tax not CGT that you'll pay on the profits, as I'm sure he meant. Depending on the level of profits you take out, it can be worse than just owning the property in your own name, as you'll pay corporation tax at 19% and then dividend/income tax on top. If you're not planning on taking it out until you stop work, it can be a lot better. Either way, find the other things your company can pay for - the electric car is a good idea, as Haf mentioned. Each director can also be awarded £300 'trivial benefits' each year, the company can provide you with your phone and/or SIM contact. You can claim the £6/week for working at home (even before the current situation). £150 for each director for a celebration, so a nice meal which could include travel and accommodation i.e. a city break. And if you've loaned the company the money to buy a property, you can charge them interest - tax free up to £1000 for a basic tax payer or £500 for a higher rate. Bit of a complex process, but reduces the tax further. As for future corporation tax rises, well they could and it plays well to the electorate, as 'corporation' sounds like Amazon, but it'll also put even more businesses out of business, so I don't think they will, at least in the short term. They could always raise the level for certain types of business, but that's getting even more complex
  5. Only yours. Do you hang around gold forums talking about gold constantly, by the way?
  6. Think they're both pretty good, although apparently you have to haggle with Howdens to get the right price, which can be a pain. We used Magnet for our refurb, although prices were via LNPG so cheaper than usual and possibly cheaper than the builder can get. Quality was more than good enough for a similar type of rental, with solid units rather than flat pack, soft close hinges etc. We went for a handleless design, as it saved quite a bit when you had to add all the handles on. Wasn't the cheapest range, but without the handles, came out a similar price.
  7. There's an app called 'Buy to Let' which is basically an online broker, so always useful for checking the sorts of rates available, including for BTL. I would give you an answer from it, but it's started crashing when I try and get a result, so you might get better results. Numbers wise, your deal sounds reasonable for a ltd company product. One thing you haven't mentioned that you need to consider is the fees, especially on a 2 yr deal, as you could be paying them again soon. Rather than looking at the rate and monthly payments, look at the total over the 2 years including fees. You often find that a product with a higher rate works out cheaper, but your broker should be explaining the options and total costs to you to allow you to decide.
  8. Have you seen the latest episode - Tim's bought a site in Rochdale that he's planning on building houses on. Not sure they're going to be cheap, but they at least look interesting. They won't be to everyone's taste, but at least it's different to the standard housing estates that pop up. Interesting thing is the whole show is clearly pre-Covid and I wonder what, if anything has changed. My city centre office is still shut and they've now effectively closed 1/3 of the space as they plan to move to a different model - no details yet, but feels more like popping into the office occasionally for most, with maybe 25% of staff in there permanently, based on their preference. If other businesses go the same way, what does that do to the city centre? Assuming bars etc can re-open properly at some point, it might still be an attractive place for younger people, but will they want more outdoor space? The warehouse that Tim was building looked ideal, but will anyone want the identikit boxes being thrown up?
  9. I think you need to stay away from the YouTube conspiracy theories and gold selling courses for a bit.
  10. I've been watching it, although only part way through the current episode. Feels like usual BBC documentary where they can't get off the fence and make pointless comparisons (don't want to get into the usual criticisms of the BBC, but every time they do a piece on something I have any knowledge about, I realise they're talking nonsense, which makes me concerned about the stuff I watch to learn about). Starts off with a woman in Eccles who's having to move out as her landlady is selling up for circumstances outside her control. Even the tenant was sympathetic about the reasons, yet it turned into some point about a tower block in Manchester making rents in Eccles unaffordable. Not sure of the connection, not least as Eccles is in Salford, so a neighbouring city... Considering the BBC is based in Salford, you think they'd appreciate the difference. We've then had the mayor of that city telling the residents that they wouldn't be allowing new houses in a park, despite it being on the old industrial area in the park and him being in favour of it but then seemingly happy to take the credit for refusing it. Then cut to a scene of him proudly building houses on grassland with no comment or question about why it was acceptable there! There's lots of sneery looks at the West Tower and people who'll spend £8k a month on an apartment, rather than an acknowledgement that the council tax will be huge, the jobs it's created in the area both in terms of building them and then for ongoing management and the money it brings into the city to businesses etc that generate more money for the council. Lots of comments about homeless people and sky scrapers - I'm not sure it should be down to private developers to build suitable accommodation, but the council should be using the money it gains to do more for them. There is still plenty of affordable housing stock around Manchester and brown field land that could be used for more, so plenty for the councils to do without expecting prime real estate to be given up. I do question some of the plans around the northern gateway and clearing decent housing stock in the area - there's been no mention of where those people are supposed to go. I did find it amusing to see one of the ladies affected doing the Ancoats tour and putting the academic in his place about what Ancoats was like. The land that's now flats and squares was derelict, car parks or old industrial units a few years ago and not somewhere you'd want to be yet somehow building homes was seen as a backward step. Basically, it's given me something else to tell at the telly about!
  11. Firstly, in the news section, Rob mentioned holiday lets and 'staycations'. A staycation is staying in your own home when you're off work. Going hundreds of miles away to a rural/seaside location is a HOLIDAY! Just because it's in the same country, doesn't stop it being a holiday. Making my teeth grind the constant undermining of many people's holidays. Anyway, off my high horse. As for the interview, what was he selling as he does nothing for free? I'm guessing if I look, he's got a course on Crypto or similar. He's right that a lot of jobs will disappear due to technology, but that's something that's always happened and new jobs are created because of it. It will cause a lot of unemployment but will also create new jobs, so being adaptable will be important, as ever. Constantly suggesting that the riots are due to people in America not having money is missing some of the major issues happening there that have far deeper problems. Feels like he's hijacking it to make his point seem valid. A good book for getting anyone started in realising the importance of assets over liabilities, but I wouldn't trust him with £1.
  12. Considering you've 'only' got £115k, you're going to need to add your own time in to get anywhere near, but that sounds like it's possible. Your £115k would allow you to buy 4 £100k properties (chucking in a bit of the rent from the first 3 to pay for the SDLT on the last). Something like that around Manchester would rent for about £550. After agent fees, mortgage, insurance, gas certificate etc, you're going to be left with a out £250, so £1000 net before tax. As you've only got 5 years, you're not going to be able to use capital gains to withdraw money for further purchases and the rent isn't going to build up quickly enough to pay for further deposits or to pay off mortgages. An HMO would definitely give a higher yield, but the cost of the house will be a lot more, so you may find you could only afford to buy two, but maybe netting c£1500/month. So still a long way short. One option therefore is to use the cash to do buy, refurbish, refinance. If you get the same sort of £100k properties cheaply enough, once you've done the work and refinanced, you may find your deposit is only £10k rather than £25k. That would mean you could buy 8-10 properties, increasing your net rent to £2-£2.5k, so still short. Do the same with HMOs and you may be able to get close, although £5k is still going to be pushing it. An alternative is to do some flips initially to give you a bigger pot to play with and then buy the houses you need in year 4 and 5, but that's a much more labour intensive and risky strategy, as any issues with selling the property at the end and your profit could disappear. If you're considering HMOs, is recommend having a look at Inside Property Investing, either website, Instagram or podcast, as they do HMOs and SA around Manchester. It'll give you an idea of what's possible, but will also give an idea of the costs involved and the levels of quality they achieve.
  13. I only made it as far south as Sale, although historically Cheshire so the wife thinks she's posh. Haven't heard of that networking event. Considering the increasing COVID restrictions in Gtr Manchester, I wouldn't be surprised if that event becomes either virtual or postponed, but if it does go ahead, would be good to hear some feedback.
  14. There's a lot of things at play, making it more difficult to predict the cycle 1) last year, we had Brexit, which hasn't gone away we've just all stopped talking about it due to 2 2) Covid prevented moves happening, viewings, valuations etc. When that was relaxed, there was a lot of pent up demand causing a mini-boom. That's been accelerated by the stamp duty holiday 3) Hong Kong - there's a lot of money moving from there to the UK at the moment, mainly for city centre new builds, but keeping demand high. I think stamp duty for overseas buyers increases next year, which might soften that a bit although more likely that it'll only change if there is political change e.g. a softening in the issues with the Chinese government or a clamp down on overseas investment. 4) Covid again - as we head into autumn/winter, who knows what's coming. There's already a few local lockdowns which could start to impact viewings etc, especially if the property isn't empty, so we could see the market get stuck again before jumping forwards in Spring 5) Furlough - it's coming to an end soon, so then we'll see the real impact on the economy. If there's a leap in unemployment, sales could start to dry up and repossessions could be a short time away 6) Eviction ban. That will need to be lifted soon and when it does, will we see some landlords selling up having got fed up with no rent etc? Could create an increase in supply 7) Brexit. It's starting to rise up the news agenda again, but something has to happen at the end of the year. We could leave with or without a deal and either could impact prices. Depending on your political view, you could take the view that it'll be a disaster for the economy or a brilliant thing, but feels like about 50% of the population will be nervous about whatever happens. 8) Trump. I wouldn't normally consider an American election to have a big impact, but it'll be 'interesting' to watch. If Boden wins, how do markets react? How does Trump react - if he decides it's a fake result, will he refuse to accept it etc? That all becomes an unknown, that markets don't like, causing share prices to fall. Not a big deal unless it causes a recession, which would spread beyond just America. 9) Stamp duty holiday - at some point, it gets lifted, which will have some impact. Will it cause a crash? Probably not, but it'll cause a slow down and the impact of that will depend on what else is happening. So, in short, no idea, but will be interesting to watch. I think the thing to concentrate on is the cycle, don't think about the 18 year bit which is just an average. Watch out for the ther signals if your planning on a purchase to avoid the winner's curse phase.
  15. Haven't done it, but check with a mortgage broker regarding the terms - we had the opportunity of a property that had an agreement with Serco but they had some weird lease period which meant you couldn't get a mortgage. If you're renting directly to the council, it'll be better than the same house with a tenant who's on benefits and therefore paying the same but no guarantee they'll actually pass their benefit to you (same risk as a private tenant really). LHA rates were increased in April and you can find them if you Google. They vary by council and the number of bedrooms the claimant is entitled to, but with our most recent house, we found advertising at the LHA rate for a working tenant meant we were above quite a few others because of how much it had jumped. In the right area, they can give a really good yield, but if you're getting LHA tenants direct rather than through the council, make sure you get the right letting agent who is used to it
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