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onkar

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  1. Like
    onkar got a reaction from carlhague in My introduction (I'm not a newbie!)   
    Hi!
    Few reasons why I went down the route of investing via Ltd company:
    My current personal income exceeds the 40% tax bracket, if I start purchasing properties in my personal name then I face the issue of automatically paying the 40% taxes on the property income profits. Solution to this was to run everything in a Ltd company and only pay the Corporation tax on the profits, keep the money in the company and continue to re-invest it, giving me full control. (I do not need to drawdown the profits, not yet anyway). Mortgage expense changes that were brought in a few years back where I cannot offset the mortgage interest as an expense. Solution: This rule does not apply for Ltd companies. For my own personal gratification where I have a 'Portfolio company', which I can brand etc sounds much cooler! Based on the above points, I feel they out weigh the additional finance costs associated with running properties via a Ltd company.
    Hope that helps!
  2. Like
    onkar got a reaction from carlhague in My introduction (I'm not a newbie!)   
    Hi All!
    Thought I would introduce myself, it's always good to expand your network especially in the property investment sector!
    I wouldn't consider myself a newbie, but I do feel like I am learning something new every day!
    I am 30 years old and originally bought 2 BTL properties around 6 years ago in my personal name and set on them for a good 5 years.
    Last year I decided to sell the 2 BTL properties (made some good profit from appreciation) and decided to setup a Ltd company which I would use for all property investments going forward.
    In my Ltd company, I own 1 BTL and currently have 6 off-market new apartment deals in progress (already exchanged):
    The apartments are in city centres in the following locations:
    2 x Leeds 1 x Liverpool 1 x Preston 2 x Birmingham I will be running the above apartments as Serviced Accomodation using management companies (Lease legally allows them to be run as SA and I will also be securing with SA permitted mortgages).
    I should be completed on all apartments over the next 6 months and plan to continue adding several more BTL's to my portfolio.
    I am also researching into adding a good HMO into my portfolio for that extra bit of cash flow. Interested in converting a normal property into a licenced HMO rather than paying a premium on an already converted HMO.
    Think that's about it! Look forward to interacting with some of you!
    Add me on LinkedIn: https://www.linkedin.com/in/onkarshoker/
     
    Thanks for reading!
    Onkar
  3. Thanks
    onkar got a reaction from clive edwards in Should we buy our first 2 properties personally then the rest Ltd?   
    Hi,
    Don't forget, you cannot offset the interest on your mortgages as an expense if running in your personal name. This will impact profits.
    You can offset the interest as an expense in your ltd company, so the extra costs associated with a Ltd company mortgage doesn't seem so bad in the bigger picture!
  4. Like
    onkar got a reaction from heretamas in Paragon bank mortgage   
    Last year I had an application rejected as I was remortgaging a property. It's because the property I was remorgaging used to be classed as 'Shared-ownership' and turned out Paragon does not allow for this in their criteria.
    I am currently going through another application with them for a new property, still early days but I have had to fill out a Business Plan plus a lot of other documents for them which has taken a while! So let's see how it goes.
     
    What happened with yours?
  5. Like
    onkar got a reaction from stefan_k in Should we buy our first 2 properties personally then the rest Ltd?   
    Hi,
    Don't forget, you cannot offset the interest on your mortgages as an expense if running in your personal name. This will impact profits.
    You can offset the interest as an expense in your ltd company, so the extra costs associated with a Ltd company mortgage doesn't seem so bad in the bigger picture!
  6. Like
    onkar reacted to DerekT in Property Extensions for Web Browsers   
    Hi Chris
    I use Patma and Advanced Property Insights. They seem to work quite well with Rightmove. 
  7. Like
    onkar got a reaction from jake_j_w in First timer: finding a solicitor   
    Hi Jake,
    One of the mistakes I've made in the past is deciding on a solicitor first, then finding out that the solicitor is not on a particular lender's panel of solicitors once a mortgage application was submitted.
    So what I would do if I was you is find your property, talk with a broker to find what lender you would apply with, then in parallel find a solicitor who is on this lender's panel.
    I am now in a position where I have worked with a hand full of solicitors and will pick one depending on whichever lender I deal with.
    The solicitor does not have to be local, but I wouldn't go with any old solicitor either. Based on my experience you get what you pay, meaning don't go for the cheapest!
  8. Like
    onkar reacted to Rob D in Chancellor Cuts: Stamp Duty 0% up to £500k   
    We've put together a quick Excel calculator for seeing how much you'll save, and an article here with some more of the details.
    A rare win for investors!
    We'll be talking about some of the likely effects of this on next Tuesday's Ask Rob & Rob podcast.
  9. Like
    onkar got a reaction from alex wright in First timer: finding a solicitor   
    Hi Jake,
    One of the mistakes I've made in the past is deciding on a solicitor first, then finding out that the solicitor is not on a particular lender's panel of solicitors once a mortgage application was submitted.
    So what I would do if I was you is find your property, talk with a broker to find what lender you would apply with, then in parallel find a solicitor who is on this lender's panel.
    I am now in a position where I have worked with a hand full of solicitors and will pick one depending on whichever lender I deal with.
    The solicitor does not have to be local, but I wouldn't go with any old solicitor either. Based on my experience you get what you pay, meaning don't go for the cheapest!
  10. Like
    onkar got a reaction from makepeaces in Newby - what's next   
    Hi Steve,
    Welcome!
    If I was you, I would start by re-mortgaging 1 of your properties first, pull out the money and invest that money to buy properties using a mortgage and a deposit of 25% on each.
    Then as you gain confidence, you can look at remortgaging the second property, invest, remortgage the third, invest.
    This will slowly build your portfolio and allow you to mitigate risks as you encounter them, rather than going with the big bang approach of pulling out equity from all at once!
  11. Like
    onkar got a reaction from taxantics in Individual or Company   
    Based on what you've described, if I was in your position, I would invest through a company from the get go. Especially if you have plans to purchase more in the future.
    If you get a new job in the future and jump to a higher tax bracket, then this will force you to pay the higher rate on the property rental profits too. Whereas if the property income is within a company, then you will only pay the flat corporation tax.
    Also you cannot offset the interest you pay on your mortgage as an expenses if the property is owned in your personal name. However, the interest can be offset as an expense if owned via a company. This makes a big difference too!
  12. Thanks
    onkar got a reaction from z in What would you tell your 15 year old self?   
    Wow, half my age!
    Get a part time job in a property related field. Learn the ins and outs of property, arm yourself with practical knowledge so that you know exactly what you need to do when its time to act! (Oh and save save save, obviously you need equity for properties. )
  13. Thanks
    onkar got a reaction from kacefile in Question about Mortgages in the UK?   
    Hi!
    Once you find a property you like, you make an offer. If the offer is accepted via an estate agent, you will need to provide a decision in principle*, proof of funds and documentation to support your ID. Once this is accepted, the house will be taken off the market and you will start a mortgage application to start the purchase process for that particular property.
    *You can apply for a decision in principle through a specific lender (usually through a broker). This basically proves that you are able to get a mortgage for a specific amount for a particular property. You can either get this in advance, or just after an offer being accepted. Probably better to do it once an offer is accepted, as some applications may perform a hard credit search and may impact credit score.
    A bit of a detailed answer, but in conclusion to your question, yes - mortgage application starts once an offer is accepted.
  14. Like
    onkar reacted to Stuart Phillips in Does Rent to Rent work?   
    My 2c on Rent2Rent:
    If you own a HMO and you let someone sublet it on your behalf then you are a fool.
    Firstly, if you dont have the time or experience to handle a HMO then you shouldnt own one. Being a landlord is a responsibility as much as an asset class.
    Secondly, you are responsible for ensuring things like fire safety, right to rent, modern slavery and trafficking, energy efficiency and living conditions. You are the one that will stand in court because a fire killed people living in substandard conditions, or because they turned it into a drugs farm or brothel. Your subletter? Well they dont own the property. They dont have a financial stake in the property, they are not even on the mortgage and so when a disaster happens they will slip away into the night to go scam someone else and leave you to carry the can. Honestly i think we are one awful fire away from it being explicitly banned, instead of it simply being a grey area.
    Thats not even considering the fines you might face for operating a HMO without a license or planning from the council.
    Thirdly, what are you paying for? Why let some unregistered, unqualified and inexperienced random run your business when you could pay a reputable lettings agency with registered addresses, industry certifications, trades and safety contracts and an understanding of the law and regulations to manage it for you?
  15. Like
    onkar got a reaction from nicholas_b in Realistic Goals?   
    I think realistically, if you have a steady cash input and a good chunk of time to dedicate to property,  you could plan to invest in 2 BTL's per year.
    If you hit that target, based on 1 BTL = £250 cash flow per month, you could potentially achieve £1000 pm cashflow in 2 years (4 BTL's). £2000 pm cashflow in 4 years (8 BTL's). £5000 in 10 years (20 BTL's) and so on.
    If you invested in more than 2 BTL's per year then you would hit those targets quicker.
     
    Bear in mind, the above calculations are based on quite a few assumptions and it is extremely difficult to give an accurate answer to your original question.
     
    There are also people out there that have got there much quicker. e.g. 10 BTL's in 1 year. These guys are taking on investor money and are working in property full time. So hitting the targets you've mentioned also depends on your personal circumstances!
     
    In conclusion, use 1 BTL = £200-£300 cash flow per month. And use that as the basis of your calculations.
  16. Like
    onkar reacted to grant in Crewe investing...   
    Hi there
    I am about to purchase a property in crewe with a look of refurbing and going down a Rent 2 Buy route. Anyhow I am from crewe originally and was schooled there so I can give some background to this along with knowledge of friends who have multi lets in crewe. 1st of all IMO the HMO market there is oversaturated, every man and his dog has gone into HMO's mostly congregating around the Ruskin Road, Walthall street area which consists over large Victorian, Edward style terraced villas with large rooms which can be easily made into 4/5 beds and picked up with little work for circa 100-120k. They are just not letting and friends of mine who have HMO's are selling or not getting into anymore, that horse has bolted not helped by the campus closing. 
    However on the flip side the standard lets are in high demand, put a property on Open Rent and you will have it gone in a week or less. Rent is no to bad with small 2 bed terraced fetching 495 in ok condition and with more modern 2 beds in some area getting 595pcm. 
    Bad areas, West street, Nantwich road (towards station end), Eddelston road and Side Roads of these streets, Also Leighton park Area with exception to new build estates, and timberel Avenue and smith grove are also very bad areas. 
     
    Good Areas - Barrows green, Coppenhall, Remer Street, Large Areas of the sydeny estate, Wistaston, Hungerford road not bad,  Upper end of Broad Street ok, Mablins lane Area, Bradfield road isn't to bad either. 
    There are some cheap houses to be had there, keep away from flats I have been tempted by some cracking new builds cicra 2006 builds which were sold for £120k new now transacting for 60k Mark, most have got maintence firms in running the blocks, bleeding them dry, one flat I looked at had a £125 per month maintenance charge. God knows what they were doing with the money but it was not maintained  as the place was in bad state for a 13 year old development. 
     
    If you would like any pointers on area if you go to view anything, drop me a message be happy to assist
     
    Lee
     
  17. Like
    onkar got a reaction from sijfish in Exchange before Mortgage Offer?   
    Hi,
    This is quite a common requirement with off plan purchases, especially where a % of the purchase price is required as a deposit at exchange of contracts. I am also in this position for a few purchases that are coming to practical completion over the next few months.
    This is one area that you particularly need to focus on during the reservation stage before putting down any money. Usually, it involves an initial discussion with your broker and identifying lenders that should lend based on your personal circumstances and also taking into account the specifics of the off plan property.
    Purchasers will usually start a mortgage application around 4 months (can vary) before practical completion is anticipated. This gives enough time to secure a mortgage offer and deal with issues that may have been encountered, such as having to start a new application with another lender for whatever reason.
    What date is exchange of contracts expected? And what date is Completion of the property expected?
     
  18. Like
    onkar got a reaction from stefan_k in Sell property with Help to Buy to Limited company for BTL   
    Hi,
    This makes sense. But if you sell the property to your company, this will be treated as a normal transaction. E.g. It will come with your normal costs such as Broker fees, Solicitor fees, Stamp Duty etc.
    What you need to do is calculate how much this will all cost and compare it with the savings you would make from a personal tax savings perspective. Then see if it is worth doing.
    Personally, I ended up selling my 2 personally owned BTL's and starting fresh with my Ltd company!
  19. Like
    onkar reacted to DerekT in Property Hub Sourcing?   
    Hi @paulh94, I'm not aware that they're published anywhere. I believe you have to sign up and have a chat with their team first before being added to their distribution list for offers. And yes, the asking price is just the purchase price. I only took a screenshot of my tracker and that includes the other columns for costs like stamp duty, fees (sourcing, legal etc), ongoing costs (service charge, ground rent, mortgage, etc). 
    Thanks @onkar! I originally based it off Rob D's spreadsheet, but slowly modified it overtime. Been using it for about 3 years now to track certain areas and deals that come in from various sourcers. 
    If you want an extract of the above with the full details/columns, just drop me a message with your email.   
  20. Like
    onkar reacted to michael_k in Dundee newbie   
    Challenge accepted ;D
    Thanks!
  21. Thanks
    onkar got a reaction from arjunb in Director's credit score on limited company mortgage application   
    Yes, and yes.
    You as the Director of the SPV are liable. All Credit Searches that take place upon lender application on behalf of Ltd companies are performed against your personal name.
  22. Like
    onkar got a reaction from solene in New here :)   
    Sounds good Solene. Good luck!!!
  23. Like
    onkar reacted to haf1963 in Birmingham   
    I have been doing roughly the same thing for 4 years now and know birmingham very well - there have been previous similar discussions so worth doing a search on the forum. The holy grail of good yeilds and good capital growth is always a tricky one to find and looking at some of your areas, they are good for capital growth and have strong rental demand but yields won't be great.
    Moseley, Kings heath, Edgbastion - expensive to buy in and often border some dodgier areas so care is needed if you see low sale price. I have never managed to get a worthwhile deal in these areas. Stirchley is a better bet as up and comning next to kingsheath but has a lot of low-in-demand student properties as the Uni built many purpose built blocks next door.
    Acocks Green - better balance of price and yield and i have a couple of properties in this area
    Erdington - huge area with godo and bad sub-areas. Very popular with hmo's around the town centre and increasingly getting an eastern european flavour
    Perry Barr - a notch below acocks green in desirability but i have a couple of properties here. Used to be huge fro students but less so now as Uni's have moved closer to the centre.
    Other areas I am in as a good balance of price/yield are
    Northfield - a bit further out of the centre but good route into the centre.
    Yardley & Sheldon - similar to acocks but on main route to airport and many employers around like landrover.
    Last thing I would say is that its a super competive city for property investment and very hard to get BMV.
     There have also been similar questions in the past so have a look to see if they help
  24. Like
    onkar got a reaction from neilwake in Getting started, help please   
    Hi Neil,
    I agree with Matt, speak to a specialist accountant and get their opinion.
    I'm speculating here: There may be ways around it. If you sold your current property to your Ltd company (this will be classed as a new purchase for your property), you will have to pay legal fees, stamp duty and also arrange a mortgage if not buying in cash via your company.
    This would in theory leave you with no personal property and thus, not liable for the additional stamp duty costs for the purchase of your next residential house. If this route works to avoid the stamp duty (make sure you get initial confirmation), then it would be worth doing IF the costs of selling your current property to the Ltd company equates to less than the 11k you have to fork out.
    For my current residential property, the wife and I had to fork out an additional 9k in stamp duty, so I feel your pain!!
    Hope it works out!
    Onkar
  25. Like
    onkar got a reaction from Nathan Cole in Expat mortgage Vs Waiting to return to the UK   
    Hi David,
    A friend of mine is an expat and lives in the UAE. I recently helped him purchase his first investment property in the Midlands.
    He worked with a broker who secured him an expat mortgage. The mortgage is with Tipton and i think his interest rate is around 3.25%. This may seem quite high, but as you rightly point out, expat mortgages can be a little more expensive. However, the rates may have decreased slightly since the Bank Of England recently dropped interest rates.
    If i was you, i would look at getting a 2 year fixed expat BTL mortgage, then when you get back, remortgage to a residential mortgage then live in it (thus reducing the interest rate massively). The extra you pay due to the expat product is offset against the rising property prices over the next few years that you are concerned about, and at the same time you are also getting some rental income.
    Cheers
    Onkar
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