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Found 8 results

  1. Hi all Would love views on my plan below. Im fairly new to commercial property, apart from having been an accidental AirBnB landlord over the years and renting out my flat in London with CTL on my residential mortgage whilst working abroad. Welcome thoughts on my plan below. I have found a beautiful 3 bed cottage in the Scottish Highlands, 20 mins drive from a large-ish town in a thriving touristy area; I've had an offer accepted and pondering if this is too financially uncertain. Recognising the Highlands is an unusual place for BTL but its an interesting market as there's a huge shortage of rental properties for local staff and strong demand. My objectives are long term appreciation of the asset and to use the property myself as a second home / Holiday Let after 3 or 4 years of BTL. Maybe keep it as a lovely place for my retirement in 25 years. I cannot Holiday Let immediately as the Scottish Government need to issue a licence which can take some time to get. For now, I want the rent just to pay cover the running expenses amd it be a safe place to invest my savings. I love the area and spent holidays there as a kid, so there's emotion driving this purchase (which makes me a little nervous that Im not being objective enough). The cottage needs some modernising (chimneys re-pointing and lining, kitchen units replaced, new boiler and storage heaters replaced by radiators). A local builder has estimated 10k, so I've made that 16k in the budget. Here are the figures: Rental income: 1000-1200/month, excluding bills. = 12k - 1440k/yr. ---- Upfront costs Price: 195k. Tax and conveyancing: 14k (6% second home stamp duty in Scotland). Repairs to kitchen and heating system: £16k (10k estimate plus 8k contingency). I think £15k of this will be an allowable revenue expense for tax. Total price: 225k My Deposit: 90k ---- Costs Ongoing as BTL Insurance and licencing: 50/month. Call-out fee for agent = 50/month My travel: 300 x 3 per year = £900/yr (75/month) Mortgage: 135k @ c.6% = 640/month Total standard outgoings: 815/month = 9780/yr. ____ Year 1 Gross Income: Rented for only 6 months due to renovations = 6k income. Expenses: 9780 standard outgoings Net income pre tax: -3780 Tax yr 1 Tax deductible expenses : 3636 (ongoing) One off costs for renovations: 15,000 Profit/loss: 6000- 3636 - 15000 = - 12,636. Tax due @40% = none as made loss. Tax yr 2 Income: 12k rental Tax deductible expenses : 3,636 (ongoing) Loss from previous year: - 12,636 Profit: 12,000 - 3636 - 12,636 = -4,272 Tax due @40% = none as loss made. Tax yr 3 Income: 12k rent Tax deductible expenses : 3,636 (ongoing) Loss from previous year: - 4,272 Profit: 12k - 3,636 - 4 272 = + 4,092 Tax due 4,092 x 40% = 1636. *Remortgage off 2 year fix at 6%* Tax yr 3 Income: 12k Tax deductible expenses : 3,636 (ongoing) Profit: = +8,364 Tax due @40% = 3,345. ******* Year 4. Convert to Holiday Let and remortgage. Income: 22k Tax deductible expenses: mortgage, bills, agency fee, etc: 15k Taxable profit: 7k. Less 40% Net profit = 4200. That's the plan. It'll e expensive for the first few years but should become profitable once it is able to be used as a Holiday Let. Plus, I anticipate mortgage rates coming down so when I remortgage in 2 years, I anticipate a rate closer to 4 % than the current 6%. Thanks for comments!
  2. Hi, I'm in the middle of a refurb and wondering if anyone has any good online places they use for bathroom supplies? e.g. bath, shower, toilets. I'm currently looking at plumbworld.co.uk which seems good but wondering what others have come across. Thanks Jon
  3. Hi All, Would be great if I can get some advice on the below quote: I've also attached the floor plan to add some context. In short, I've turning my flat which I'm moving out of into a BTL property, I've already converted the property to a BTL mortgage and moved the property into a limited company but it needs renovating before it can be let out to tenants. Apart from the double glazing windows which are newish 2-3 years old, everything else needs replacing as this is a very old converted victorian flat which is in need of full modernisation - No structural changes. It's probably been 15-20 years since any updates have been made to the property. I've estimated the work based on research to be around £35K-£40K including VAT with contingency of £5k-10K based size of the property and work required. I thought this was a very generous budget and was hoping to come a bit under this budget but I had a shock when I got a quote for £56K. I've put the breakdown of the quote below. From my side, the contractor is very experienced and does good work based on pictures I've seen and recommendations and I've got a good gut feeling he would do a good job and this would be the final price. However, I feel this is quite expensive based on my original expectations. I also received another quote for £36K but I feel things are missing from this quote and the cost would increase a lot. I am still waiting for other quotes but I think the question that I'm asking is: 1. Is the quote a realistic quote for the work required, if not, what be would be a fair quote? (rough estimate or range being in London, finger in the air type guess) for the size of flat and a full refurbishment required. 2. What information should I ask for to get a better understanding on the quote and to check if things are being priced up. 3. What strategy should I use to bring down the price of the quote if it's not fair. 4. Just any advice in terms of what I'm doing wrong or should start doing, would be much appreciated. Thanks again for reading or responding to this post. Floor Plan of Flat £56K Quote: £36K Quote:
  4. Hi Hubbers, Just looking for any recommendations for contractors that carry out Refurb work in or around Lowestoft Suffolk. Any help would be appreciated. Thanks in advance.
  5. Morning all Just wanted to ask for some advice off anyone who is a few steps in front of me or is where I want to be. I am a 20 year old electrician and have been studying about property investment/ development for about a year or two simply just reading books, articles, forums you tube videos etc... My best pal and I (who is also and electrician) have decided to partner up on our property investment journey as we both have very similar if not the same goals relating to where we want to be and also feel that we would work very well with each other. We both live in Caterham surrey and between us both have managed to save up around £25,000 and also can get loans if needed. We have been viewing properties in areas such as Crawley/ East Grinstead about a 20 minute drive from our homes. Our strategy is for the first three properties we buy we will sell two and hold one for rent in the hope that we would have made enough capital to afford a BTL investment. Our goals aren't for short term cashflow it is for long term wealth as we both know you cant get rich quick. We have agreed that we will live off our current wages and any money made from the property business will be reinvested back into it in the hope that over a 10/15 year period we would have large property portfolio and leave our jobs as sparkies and become full time property developers as it has always been our dream. I know I have only touched on our goals/ game plan briefly in this paragraph but have one written up going into the depth about where we will be in the future if anyone is interested. Hope you all have a good day and look forward to reading any replies as I think we would both benefit massively from it. Kind regards Will.
  6. Hi everyone My girlfriend and I live in switzerland and we are looking at a Recycling Cash strategy (buy below market value, refurb, refinance with a higher mortgage) to get started in property investment. Since we live in Switzerland, this will probably just be doable through a sourcing company. Therefore: Does anyone know a sourcing company that sources good deals and also manages the refurb process legitimately? I just had a quick glance at 1-2 companies who do this but their websites didn't give me the kind of trust you want to have when doing something like this from abroad. Unfortunately propertyhub themselves do not offer this kind of services... Thanks for your advice. Regards Bernhard
  7. Good evening everybody. I would be greatfull if somebody could give me some ideas of the best way/place to get a short term loan/finance for around 4-5k. I am in the process of flipping a 3 bed terrace property in an attempt to gain more capital with the view of buying another BTL and another flip off the profit. Any advice is welcome and would be appreciated. Regards, Jase
  8. Hi, I'm thinking about buying a property that needs moderate work (new bathroom and kitchen + painting etc) and then moving in to it for a few months. I'm eager to avoid a lengthy void after purchasing the property and since I only rent at the moment (although I have an investment property), I'm quite flexible and could save money by living there until it's ready. My question is, what could I do from a mortgage point of view? Would I need to get a residential mortgage initially and then switch to BTL once I have finished the works? I assume that I would living in the flat for approx 6 months. Could I start off with BTL and save fees associated with remortgaging? Could I still consider it a 'void' from a tax point of view even though I was living there? Basically, I have lots of general questions but imagine that this is a common approach, so any general advice would be very helpful indeed. Many thanks, Gareth
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