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  1. Hello Guys, What is the industry norm for floor plans? is there a certain tool or software that Agents use to do floorplan? I've messed around with some software but found it extremely time consuming, thats before measuring each room. Thanks!
  2. Hello, Is there any advice on the best way to create floor plans (for quite a sizeable house), so ideally a fast method! What are the tools and best software(s) used in the industry? Thanks!
  3. Great thank you! Good points about expenses. It seems an accountant will probably be the best option (depending on cost) and also less timely.
  4. Thanks! Yes, clueless when it comes to personal taxes.
  5. Hi, well you won't be making a loss according to this so that's good! I am not sure what area you are looking in, so don't know about demand etc. But are you confident that it will only take you 1 month from purchase to let it out? Is 650pm achievable? Stamp duty break? Also a £100,000 property with yearly services charges of over 10% of the value of the entire property seems high to me. (I am in London so can't relate to an asking price of £100,00). IMO you should look to cut some of your monthly costs.. £936 p/y in management fees.. plus £300 p/y on tenant set up fees.... really eating away at a decent income. Your £1,155.00 is before tax (e.g. 40% if you earn above that bracket) so make sure to account for that. Also, I presume you are buying it with the prediction of capital appreciation? As you will be running it as a BTL, you will also be liable to pay capital gains tax when you sell it. Reasonably tight margins if interest rates were to surge, but interest rates will remain low for the quite a while IMO- but who knows what will happen in today's world. https://www.thetimes.co.uk/money-mentor/article/interest-rates-rise/#:~:text=UK interest rates currently stand,and then again to 0.1%.
  6. Hi, I am about to start renting out a property. However, I don't do my own tax returns and I work for a corporate company. 1. As far as I can work out I will have to pay 40% tax on the rental income (seems you may be able to get some sort of relief from the interest I pay on the mortgage) and when I sale I will then have to pay 18% or 28% of the sale price. Is this correct? 2. This is a fairly hefty hit to what are already quite tight margins. Any way to reduce this expenditure? Such as running it through a registered business? 3. Also, would you recommend I do my tax returns or get an account to do it and will I have to submit my tax returns for my corporate job as well (this is done automatically atm)? Appreciate some help! Thanks
  7. Hello, Are there any penalties for overpaying on a repayment mortgage? For example if I took out a 25 year mortgage and my earnings increased exponentially, to a point where I wanted to pay more pm, in order to pay less interest in the long run. Thanks!
  8. @EvolutionBlogger I made an offer on Wednesday just gone by, the property hit the market Monday. By the time I made the offer there were also another 2 offers and still on going viewings etc. I made an offer just below asking but did say to get back to me if someone were to offer a lot more before selling it to them, as I am paying cash, with no chain etc. Anyway, the agent hasnt let me know about the offer I made on Wednesday, they did say yesterday after I contacted them that they would hopefully have an update by yesterday afternoon, as they were discussing what the vendor wanted to do due to the high interest. But I didn't hear anything. Do you think it's worth giving them a call today or following up on Monday?
  9. @EvolutionBlogger I have seen you have very good knowledge on the London area on previous posts. I was wondering if you had any advice for me? I have never brought in the London market before and it seems competitive.
  10. Thanks for your reply @Adam Hosker. I would be on a repayment mortgage. My question was more in relation to the benefits of maxing out the term length for a repayment mortgage i.e. 25 years. i.e. Option 1 I purchase a £320,000 property I put up £200,00 in cash I mortgage £120,000 My term is 25 years I can get a repayment fixed rate mortgage at 1.5% for 5 years my monthly repayments are: £480 I sell after 5 years. Option 2 I purchase a £320,000 property I put up £200,00 in cash I mortgage £120,000 My term is 15 years I can get a repayment fixed rate mortgage at 1.5% for 5 years my monthly repayments are: £745 I sell after 5 years. The only difference being my term length. in a high interest environment and if I were to hold long term I can understand the reasons for try to pay it off as quickly as I can afford, as to not pay tonnes of interest on it, but as I am only holding for 5 years is there any reason why I would go for the 15 year mortgage over the 25 year mortgage? Especially if I could use the 'overpayment' method @Stuart Phillips recommended. Thanks!
  11. Thanks @Stuart Phillips. This is a great. Realistically, as you said, I will just pay the minimum amount as it won't be a home for life, but for 5 years or so, so won't be worth 'overpaying' etc because I won't occur much interest on the loan if I can lock in on a 5 year fixed at around 1.5% and sell once that term is ending. So I guess it is best to try and max out the length of the mortgage to reduce the monthly payments (overpaying if I want to shift it faster) and lock into a 5 year fixed rate mortgage, this enables me to fee up cash for other investments etc. My only concern was if I signed up to a 25-30 years term, if there would be any issues getting out of it in 5 years when my favourable fixed interest rate of 1.5% ends and I sale the property?
  12. Your spreadsheet is kind of hard to follow. For example I split my assumptions like this: Acquisition Purchase Price Stamp Duty Legal Cost etc Net Initial Yield Operations Rent PCM Rental Growth p.a Service Charge CapEx etc Exit Hold Period Sale Date Estate Agents fees Exit yield etc Senior Facility (mortgage)- I have assumed fixed rate mortgage that pays both principle and interest. LTV: Loan Amount: Term: i.e 25 years Length of Fixed term interest rate: i.e 5 year fixed rate @ 1.8% All-in-rate: 1.8% Rate after assumed after fixed term 5 years period: if you dont want to look for better terms e.g. 4.3% Product fees etc etc. This is a good grounding for an assumptions worksheet on excel. You should then ideally build out a model with a discounted cash flow to truly understand what you are getting into. I would ideally then create some more sheets on excel- Mortage calcs, Lease calcs and then a monthly cash flow.
  13. Did you go through with it? Not enough details to build a comprehensive model: Would be good to include information on lease type (interest only, principle and interest etc) and also what interest rate you will be paying on it. Hold period (how long do you think you will hold the property for, this will change ROI) Exit Yield- you have a current yield of 6.67%, but after the 5 years (or how ever long you hold it) what will the yield be for the purchasers. Yield has an inverse relationship to price, the higher the price in relation to the rent the lower the yield. A yield is also correlated to risks, the higher the yield the more risk you are taking on (value-add, opportunistic). Rental growth- you know your market if your buying a BTL, so what do you expect to happen to rents over the coming years i.e. because of covid you may assume a conservative rate of growth. Void Periods- you have assumed a 6 months void period for works at the start I presume. But you should also include potential void periods for when tenants leave the property. For example in London, lower end rentals will likely have tenants on a 12 months contract, it should be assumed there may be some void period when they leave, depending on market conditions. Scenario Analysis - ensure you do worst case, base case, best case for you assumptions i.e. what happens if the markets is slow and suddenly you have to make a monthly rent of £600 not £675 etc. I don't know your location or what your market is so can't really comment on a 6.67% yield, but a lot better than 0.4% from an ISA or 0% leaving it sitting in your bank. It could be worth learning how to build a basic model for your investments that take into account a broad range of assumptions, because you will find out a lot more.
  14. Hello, I am making an offer on a flat in the London area. There are already 3 other offers and reckon it will rise to 6 or so over the net few days. I have submitted my offer to the agent, I went in quite a bit lighter than I am prepared to buy it for (£10-15k below my max). The agent informed me it will most likely go to best and final. The one benefit I have is that I have no onward chain and I would be paying 100% cash for the property, so I have the ability to move very fast (or slowly, depending on the vendors situation). Any tips on how to play out this situation to try and secure the property? I know you should never put emotions into a deal, but it's hard not too and I think there is good scope for value-add and it is priced low.
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