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130k to start in property & many questions!

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Hello Everyone,


A little background info on myself, I am a 28 year old electrician & I want to be financially free through property.


I & my partners have listened to what feels like millions of audiobooks & done hours of researching into property & have decided on starting a LTD company in which to do our business through.


We are currently in the process of getting the company set up with a property accountant (who himself is a property investor), we also have a mortgage broker a couple of us have used before (who is also a property investor). We have a 130k starting pot between us, we live in the Bournemouth area and are hoping to start purchasing properties with the buy, refurb & refinance strategy. Eventually, we would like to shift towards FHL's as well. 


As such to help us analyse potential properties easily I have made us a "deal calculator" in excel ( I can easily geek out & lose hours of my life in excel it seems!)


I intend for us to be able to put in as much info for a property as possible & then to using "stock costs" (fee's, refurb costs etc) churn out the initial annual net profit, yield, ROI & then the refinanced ROI & net yield. Most importantly it will estimate the capital we hope to be able to recycle out of the property as at the moment we do not want to add to the pot.


We really do not want to put ourselves in the position of having bought a few properties & then be stuck waiting for capital growth before we can make another move. 


The point at which I am unsure of at the moment is what the "stock costs" should be for the calculator, of course, we want to air on the side of caution but I also do not want to mistakenly disregard a property because I have been too harsh with the costs involved.


Currently, I have them down as:


Initial purchase costs

Initial LTV 75%

Initial mortgage interest 3.5%

Initial mortgage cost PA

Stamp duty (calculated from purchase price)

Mortgage arrangement fee £3000

Initial Solicitors fee’s £1500

Initial surveys £300

Initial Mortgage broker fee’s £300

Refurbishment months void (this will depend on the extent of the refurbishment)

Refurbishment Expense (calculated on another spreadsheet!)

Lease Extension cost (if applicable)

Property sourcing agents fee (if applicable)


Refinanced costs

Refinanced LTV 75%

Refinanced mortgage interest 3.5%

Refinanced mortgage costs PA

Refinanced mortgage arrangement fee £3000

Refinanced mortgage broker fee’s £300

Refinanced Solicitors fee’s £1000


Ongoing costs

Insurance £300 PA

Safety testing gas £100 PA

Ongoing months void PA 1

Service charge (if applicable)

Ground rent (if applicable)

Council tax £180pm (during voids)

Utilities £100pm (during voids)

Letting agent management fee 10% PM

Letting agent tenant finding fee £250 PA

Ongoing maintenance 10% PM


I have also included a part that works out if the rent achieved will cover the mortgage costs both initially & after refinancing for a 6% mortgage at 125% & 145%. 


I have included a screenshot with as an example to hopefully make things a little clearer.


I will ask about estimating refurbishment costs in another post :lol:


Please let me know if you think I might have missed some costs or if my estimates are off! I'm assuming prices do vary all over the country but hopefully as we do more & more deals I will be able to perfect the numbers better. 


For now though before our first deal any help would be much appreciated!


Thank you if you read this far & thank you even more if you reply :) 









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Hi Doug, it all looks well planned out.


My only comment is that the mortgage arrangement fees seem high, as does your interest rate, I used these people through an agent last time https://www.bmsolutions.co.uk/products/buytolet/


I also talked to my agent recently and the buy to let refurb mortgages he has said are hard to get now, can you get one?


Also our letting agents also charge 10%pm but this includes finding a tenant and a gas safety test.


Good luck best regards





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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

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Labowski & haf1963 thank you so much for both getting back to me :)!


The property in my sheet was only an example, finding a 200k property that would let for 2k PM would be great! 


Haf, good point about the accountancy fee's I will have to factor them into my business spreadsheet! I put in two refurbishment's into the calculator because I was hoping to do a minimal refurbishment to get the property to a lettable standard & then after 6 months of a tenant being in there begin the larger renovations etc to add value to then property & then after that refinance. The point being to try to ensure as many of the refurbishment costs as possible would be able to be claimed back as revenue expenditure once a tenant has been in, rather than doing a large renovation straight away & all the costs going towards capital expenditure. 


Lab what do you mean by a "buy to let refurb mortgage" ? I was planning on simply getting a normal buy-to-let interest only mortgage?


again thank you both for getting back to me it is really appreciated! 







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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.

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