Richlist Posted February 18, 2018 Report Share Posted February 18, 2018 I've been running down/ selling off some of the properties in my personal property portfolio over the past 5 years. Trying very hard to limit CGT liability by selling one property in each tax year. We are just selling property number 6 (due to complete on or after April 6th) and this will mean we will have disposed of property well in excess £1 million. I'm now in the process of building a new (residential) property portfolio (of freehold houses)within a limited liability company......there are lots of pro's and con's e.g. Ltd Company mortgages are usually at a higher interest rate & they require personal guarantees from the directors ( my three kids and me) but there are tax advantages. Anybody else gone or going down the same limited liabilty route ? Link to comment Share on other sites More sharing options...
Melboy Posted February 19, 2018 Report Share Posted February 19, 2018 Not me RL. However I am in the process of buying a new property right now more or less the same type of property that I tend to specialise in and have done so for the past 30 years now. I always go for the location first. 2/3 bedroom houses is my choice. I do have a flat and that is a lesson on how not to buy a property. Bought at the peak of the property boom in 2007 but the selling price has now recovered nicely in 2018 This new purchase property became available to me in a road where I already have property and I quite fancied it to add to the portfolio. I too have sold off a couple of my property holdings some 5 years ago which was a big mistake really as the prices have rocketed. I thought I was in retirement but I got bored I have to say. This property has cost me 3 times what I was paying for similar properties back in 1989. There is a lesson for new people entering the BTL market. Property prices may well go down but taken over a long period of time they will always rise again in capital value. Link to comment Share on other sites More sharing options...
bil8999 Posted February 19, 2018 Report Share Posted February 19, 2018 6 minutes ago, Melboy said: Not me RL. However I am in the process of buying a new property right now more or less the same type of property that I tend to specialise in and have done so for the past 30 years now. I always go for the location first. 2/3 bedroom houses is my choice. I do have a flat and that is a lesson on how not to buy a property. Bought at the peak of the property boom in 2007 but the selling price has now recovered nicely in 2018 This new purchase property became available to me in a road where I already have property and I quite fancied it to add to the portfolio. I too have sold off a couple of my property holdings some 5 years ago which was a big mistake really as the prices have rocketed. I thought I was in retirement but I got bored I have to say. This property has cost me 3 times what I was paying for similar properties back in 1989. There is a lesson for new people entering the BTL market. Property prices may well go down but taken over a long period of time they will always rise again in capital value. Hi Melboy Can you expand on the on your comment about how not to buy a (flat) property. Regards Link to comment Share on other sites More sharing options...
Melboy Posted February 19, 2018 Report Share Posted February 19, 2018 1 minute ago, bil8999 said: Hi Melboy Can you expand on the on your comment about how not to buy a (flat) property. Regards Certainly.........In the April of 2007 I bought a flat which was at the top of the price range back then. The property slump started in August of 2007 with the collapse of the banking sector. The value of my flat dropped several thousand pounds over a 6 year period and it is only in the past 2-3 years with the rise of property values that that by 2014 the flat had reached my purchase price and in the last 2 years has exceeded the purchase price and is now showing a good capital value at last. So I have gone from hating it to loving it. It has always been rented out with only 1 week void period in all those years. I have a long term tenant in there now who wishes to stay......forever it seems so I am happy to leave everything as it is. Link to comment Share on other sites More sharing options...
Grampa Posted February 19, 2018 Report Share Posted February 19, 2018 We all have our own criteria when buying property for BTL purposes some of mine are: never pay full asking price unless its a steal or you can see something in the property that others have missed. Such as ways to gain a extra bedroom, reconfigure the layout or extend etc. Do your research well on what you can legally do and potential costs involved. I only buy in areas I am familiar with. I wont even look at a property until I have clarified the lease length, service charge amounts, ground rent amount and then if the numbers stack up start asking questions such as have they had any costings for lease extensions are any major works planned is there a block management Co in place. Getting this info now can save solicitor fees because you can choose to withdraw or re-negotiate offer if there are potential issues before instructing your solicitor and incurring costs. I look for maximizing rental income by buying a property with a separate garage that could be rented. I have other criteria as well but the above is my starting point Link to comment Share on other sites More sharing options...
Richlist Posted February 19, 2018 Author Report Share Posted February 19, 2018 Great list Grampa. But, amazingly most of those excellent questions never seem to be asked by private buyers. Melboy, we all know someone who bought at the top of the market just prior to the crash. The great thing for you is that you have managed to hold onto the property to see the price recover and rise. Many sold at a loss and are still paying the price. Interestingly enough Steph Mcgovern who covers economics & business news for BBC1 breakfast bought a flat just before the crash and like you has been waiting for years for the price to recover. It could happen to anyone. Link to comment Share on other sites More sharing options...
Melboy Posted February 20, 2018 Report Share Posted February 20, 2018 I read about Steph McGovern as well. I know how she feels. If anyone had bought the flat I bought for BTL they may well have struggled a bit. Yes, I know a lot of people got caught out in the down-turn and they lost money. Rental income covered mortgage payment on my flat but only just and repairs or incidentals was extra cash to pay out. I did have a Northern Rock mortgage on it is as well which, at the time, was a bit worrying. I cleared the mortgage 3 years later when a company took over NR mortgage debts. I'm quite relaxed about the new property I have just bought now and I am not too concerned what property prices do over the coming years........down or up I don't care. Link to comment Share on other sites More sharing options...
bil8999 Posted February 21, 2018 Report Share Posted February 21, 2018 On 18/02/2018 at 7:30 PM, Richlist said: I've been running down/ selling off some of the properties in my personal property portfolio over the past 5 years. Trying very hard to limit CGT liability by selling one property in each tax year. We are just selling property number 6 (due to complete on or after April 6th) and this will mean we will have disposed of property well in excess £1 million. I'm now in the process of building a new (residential) property portfolio (of freehold houses)within a limited liability company......there are lots of pro's and con's e.g. Ltd Company mortgages are usually at a higher interest rate & they require personal guarantees from the directors ( my three kids and me) but there are tax advantages. Anybody else gone or going down the same limited liabilty route ? Hi RL I have some properties in my wife's name, some in my name and some in Ltd company. I also have several plots of land that I have owned for quite a long time so have set up a Ltd company in my daughters name so that we can sell the land to her company and then develop the land for rental lets. Has anyone done the same, any pitfalls etc? Regards Link to comment Share on other sites More sharing options...
bil8999 Posted March 4, 2018 Report Share Posted March 4, 2018 Can I take it that no one has done this in the past? Link to comment Share on other sites More sharing options...
Richlist Posted March 4, 2018 Author Report Share Posted March 4, 2018 Just a few observations.... 1. I don't see any advantages in owning property as an individual when you have the opportunity to own it jointly with your spouse, there are obvious IT and CGT benefits. Transferring into joint names is easy and cheap. You just need to agree the percentage split of legal and beneficial ownership. 2. Selling existing property into a Limited Company will attract SDLT and CGT and legal fees. 3. Building property for investment needs professional advice. You need to check your IT and VAT situation...which may be totally different compared to building property for your own personal use. Link to comment Share on other sites More sharing options...
Melboy Posted March 5, 2018 Report Share Posted March 5, 2018 22 hours ago, bil8999 said: Can I take it that no one has done this in the past? I looked into this a few years ago and I could not see any advantage in forming a Ltd. company. I am happy just to bumble along as I have done for a long time and whatever I am doing it works for me as a choice. Link to comment Share on other sites More sharing options...
bil8999 Posted March 6, 2018 Report Share Posted March 6, 2018 Thanks for the reply's, I will continue as stated above. Link to comment Share on other sites More sharing options...
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