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Everything posted by haf1963

  1. You really need an accountant but basically you have to treat the company's profit/loss totally separete to any direcors loans and assetts. So essentially you make 24k in 'income/revenue' and minus all your expenses of which the interest is just one (advantage of ltd is you can claim everything from car allowance to stationary to salary to pension to working-from-home as well as property maintenance related expenses). Anyway you will then pay tax on what profit is left at corporate tax rates. On the directors loan side, that has nothing to do with your profit and you keep a totally separate account of loans and loan repayments. i.e you will pay the tax whether or not you use the companies money to repay some directors loans. You are correct in that once the property is in teh ltd company then your next purchase in your own name will become your only property and you will not have to pay any stamp duty. Transferring the property to the ltd company is no different to you just selling it to anyone else. from SDLT perspective.
  2. I go with 1 months deposit and most tenants seem quite happy with that
  3. Your solicitor shoudl be helping you with this as part of the purchase. He will need to check whatever agreements are in place with the tenant and the agent to make sure you are not exposed and that any 'exit' penalties are covered by the seller.
  4. without much to go on i would favor loft conversion and kitchen extension as the most bang for your back - assuming they are do-able
  5. It seems to me that if you ar ethinking of becoming serious about property investment as a long term strategy then you need to sell and re-invest based on your new goals/strategy. If you can't remortgage then selling is pretty much the only option - especially if you wan to improve income/yield. I suspect you will need to be looking at the next growth areas (north) as the south seems done for the short term.
  6. I am not sure this will work. Basically you setup a ltd company with you as the Director and then you 'sell' the property from your personal name to the ltd company as a normal transaction via your solictor. If you are saying you need a mortgage then the ltd company will apply for the mortgage and I suspect you will still struggle to get one as the mortgage provider will want you to personally underwrite the mortgage which means they will look at you salary etc - ie there is a fair chance that you will get turned down or you will only get a mortgage with high fees/interest rates. The price of the property needs to be 'fair market value' so you will be paying 3-5% stamp duty as well. I would definitly get a professional opinion and at least verify you can get a ltd company mortgage befor eyou go too far down this road. I have transferred from personal into ltd and then got a mortgage and there were a lot of checks and hoops to jump through Directors loans is just referring to any money you put into the ltd compnay to get up and running or for investment so the deposit for the new mortgage will efefctively be a Directors Loan.
  7. i know many investors who wouldn't go anywhere near a modern auction so i would go traditional auction if you want speed and certainty or normal agents if your not rushed
  8. The point about tax is very valid and if you are both HRT then you need to do some proper analysis on the side effects of extra income eg will it put you in the 60% tax bracket?
  9. If you have the architect drawings and building regs specs then that should be enough to get like for like quotes. the only other factor is the groundworks so you may need specs for them if they are non-standard grounds eg big slopes etc
  10. All depends on the deal versus rental value with and without parking. Parking definitely preferred but if the deal is attractive then worth considering
  11. 100% yes you would - as the ltd company is effectively buying the property - and the fact that it was residential makes no difference
  12. I am just in the process of doing a new build on an old lock up garages site and had to pay the usual stamp duty on purchase + 3% extra (LTD). Not sure abouit land but suspect the same
  13. i think i am wrong on point 2 and its just income tax if you are buying in own name and corporation tax iof ltd company - i only do ltd company so not totally upto speed on personal ownership. on point 3 there is not a simple answer as bot have positive and negative implications hence you have to look at it alongside your personal scenario - for example if you need the profits as income then personal may be better as you will pay tax twice on ltd. If you are a high rate tax and not fussed about taking the profits then Ltd - and many other options so no-one can give you a proper answer without knowing lots more about your situation.
  14. 1. depends if you already own another property as the extra stamp dtuy is reqd on second homes regardless of flip/btl or anything else 2. yes CGT is payable 3. i would say personal if you are doing 1-2 a year and ltd if you are going bigger.. but there is much more to factor into the decision - plenty of info on this site under free courses
  15. I would at least wait a week to see whats in the budget as govt may well come after BTL sector again..
  16. Your numbers look decent and leaving 10k in is a good result in my books. your 2 options for taking more money out are 1. add more value with extension/loft-conversion/layout-change etc. will cost you double your 10k refurb but add another 10k in value 2. buy even lower - difficult these days with many people chasing fewer deals
  17. the challenge you have is that mortgage companies have a strict criteria for BTL so unlikely they will give you a loan in your name if your salary/finances don't stack up. Similarly your OH will have tax problems if he buys in his name. I have been through all this a few years back and went Ltd with both me and OH as joint shareholdes/directors. Ltd only works if you are going to do multiple properties rather than 1-2. Theres a lot to factor in - even without your extension element. Also bear in mind that even a LTD mortgage will have to be underwritten by the directors personally so they will look at all your finances to determine if you are capable to handle both existing mortgage/extension and ltd mortgage.
  18. If there is a tenant in the property and you are replacing roughly like for like then you are good to claim i.e similar numbers of kitchen units etc
  19. Property development is completely different to BTL and I am learning loads on my first project. When i started BTL a few years ago it was easy to find lots of really good content and advice (especially here) on every angle from refurb to tax to tenants whereas i am not finding anything close for development when it comes to land/utilities/planning etc. Hence I am having to guess at things and learn as i go by networking - its all good stuff and i'm not complaining btw...
  20. I would get some advice on what you can claim in terms of refurb once a tenant is in versus doing it before hand. My accountant reckons only like for like can be claimed so you have a shot at getting some elements of kitchen/bathroom etc claimed but anything considered 'enhancing the property' should not be claimed. To be honest I doubt you will be showing any profit anytime soon in a ltd company so there is no need to try to claim lost of additional things to keep the profit/tax down. The advantage of a ltd company is that you can claim all sorts of expenses (eg i drive 10k miles viewing properties, visiting agents/auctions etc) so thats around 5k of expense not to mention costs of phone/use-of-home-stationary/etc plus you can pay someone/spouse/partner a small wage for admin duties etc. Its actually quite difficult to show a profit until you get a good few properties under you belt. I started where you are now 3 years ago and am still finding it difficult to show a profit after all legitimate company expenses and multiple properties.
  21. I have not found a decent source of free information on development that goes to a reasonable depth - its mainly high level (inc the above podcasts) so will be interested if the OP finds anything decent
  22. solicitor fees seem high but that may be the norm down south dont forget you need to cover the ltd company accounts eg 1000 accountant fees for annual accounts getting 2k rent on 200k property is impressive but assume you have verified this locally obviously you will have 12 months or so between buying and refinancing also if you buy 200 and refurb for 20k to then refinance at 230 it seems like you are paying 2 lots of fees for very little gain and may as well buy a 230k house that doesn't need refurb and just get the one mortgage. i would say either buy cash and refurb then mortgage or refurb but add more value via small extension/loft conversion etc so you get a decent gain
  23. no question a downstairs loos adds value and i also try and stick one in if i can. main issue is always drain access so if thats not far then i would do it for sure
  24. birmingham depends on budget as mosley/edgbaston/harborne and all prime but not cheap.. kings heath/hall/green/kingsnorton/acocks green are next in line. generally speaking south birmingham is more prime than north but there is flip value in also in places like perry barr, yardley/etc As with most cities its not as simple as just nailing an area