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As a property investor (I'm not a landlord):

For example, I found a BMV property, then apply for planning permission to convert into an HMO property depending how many bedrooms and use the bridging finance to refurb it, then use the property to rent it out to potential tenants if that makes sense. This is a buy to let. 

Someone mentioned that property management/ Rent2Rent is a trading business.

Which of these codes are applicable? It is really confusing. 

SIC codes 

SIC code 68100 is for the buying and selling of own real estate; so, if you’re going to be flipping and trading, this would be the code for you.
 
SIC code 68209 is for the letting and operating of own or leased real estate. In other words, for buying and holding property and renting it out.
 
SIC code 68320 is for the management of real estate on a fee or contract basis. So, for example if you’re going to set up your own management company, then this would be the right classification for you. (As an aside, if you’re going to manage properties for other people or third parties, you should definitely do this in a separate company, and for tax efficiency purposes, you may also consider managing your own properties for yourself but through a separate company).
 
SIC code 68310 is for real estate agencies. In other words, if you’re going to do deal packaging, i.e. if you’re going to source properties for other people.

 

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I would always recommend simply using SIC code 68100

You dont need more than one SIC code, and it both makes the company an SPV, therefore non trading, and is accepted by lenders universally as such.

If you want to do anything other than collect rents and pay mortgages then do so through a separate company. Property management would be considered a trading company. Rent2Rent isnt something any legitimate landlord should be considering.


Stuart Phillips
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AALTO Mortgages Ltd

Independent, Whole of Market, BTL Specialist.

 

http://www.aaltomortgages.com
sales@aaltomortgages.com
0207 183 1101

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What code would you propose if for example, you purchase a property to flip (within a company), however once the work is completed you struggle with the re-sale so you rent it out and refinance with a company BTL mortgage?

I have always wondered whether you would require 2 separate companies ie. one for flipping and one for refurbishing.

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