Turbocharger Posted February 28, 2007 Share Posted February 28, 2007 as opposed to taking some advice off random forums Don't worry, I have the phrase 'Free advice is worth what you pay for it' firmly in my mind. We intend to see a proper advisor recommended by a friend but most are angling for a sale of their favourite product or reticent to give advice in case we sue! Quote Link to comment Share on other sites More sharing options...
ciderman Posted February 28, 2007 Share Posted February 28, 2007 Take it to a FA , They are there for your interests and theirs , and will advise you of the many pitfalls and gains that are to be expected on this kind of dilema , They are the professionals ,so dont rely on hearsay that you might read on the forums . Quote Link to comment Share on other sites More sharing options...
pugwash Posted February 28, 2007 Share Posted February 28, 2007 Don't worry, I have the phrase 'Free advice is worth what you pay for it' firmly in my mind. We intend to see a proper advisor recommended by a friend but most are angling for a sale of their favourite product or reticent to give advice in case we sue! they aren't qualified adviser then- you want an advisor that you pay up front really- they have to tell you what products they recommend and why my advise (and i have more experience of commercial rather than residential property i'm afraid) would be to find a Tax accountant, NOT an IFA- IFAs are only useful when you know WHAT you want to do and want the best product! Quote Link to comment Share on other sites More sharing options...
rtbarton Posted February 28, 2007 Share Posted February 28, 2007 If you sell and buy another with the money you'd only pay CGT on the profit (less the threshold) surely? Shares would count as a capital purchase in the same way as another property would. If you don't form a Ltd Co make sure your arrangement is cast iron. Personally I'd be inclined to form a company, but there are special rules for property companies. There is a fair bit of admin to do, but the ownership of the house is with the company, and the ownership of the comapny is with the shareholders - completely unambiguous. I would see an IFA, if anything goes wrong it's one more person to blame! Quote Link to comment Share on other sites More sharing options...
Yostumpy Posted February 28, 2007 Share Posted February 28, 2007 as they all say you need to speak to likeminded individuals, try this one for size www.bbc.co.uk/lifestyle click on talk (top right) and then homes and property (top left) let me know how you get on. there may also be a link to others! Quote Link to comment Share on other sites More sharing options...
Guest MJG Posted February 28, 2007 Share Posted February 28, 2007 Take it to a FA , They are there for your interests and theirs , and will advise you of the many pitfalls and gains that are to be expected on this kind of dilema , They are the professionals ,so dont rely on hearsay that you might read on the forums . Yes I remember, I did the same when I bought our house 12 years ago. The fat sponging, weazel 'advised' me to get an endowment mortgage...... Pity we won't have enough in our endowments to pay for our house at the end of our mortgage term...... As far as I am concerned I wouldn't trust a fat four eyed financial adviser as far as I could throw the leeching b@ast@rd...... You'd be as good getting your advice here, it will probably be as good and when you call it into question you will get about the same result as I did with the Financial Services Ombudsman..... Diddly squat...... But I'm not bitter or anything....... Quote Link to comment Share on other sites More sharing options...
rtbarton Posted February 28, 2007 Share Posted February 28, 2007 Bear in mind that's illegal for non-qualified people to give financial advice Quote Link to comment Share on other sites More sharing options...
Mark90 Posted February 28, 2007 Share Posted February 28, 2007 whatever you do do NOT put the property in a limited company. Keep the property in private names. Why do you say that? It's something I'm considering, although will also be taking advice from the very nice accountant who helped me evade avoid a tax bill from it this year Quote Link to comment Share on other sites More sharing options...
Guest MJG Posted February 28, 2007 Share Posted February 28, 2007 Bear in mind that's illegal for non-qualified people to give financial advice Yes, but it is likely to be better than the advice I got from a so called FA 'registered with the FSA' You'd stand a better chance talking to our fat @rsed retriever. I'm still not bitter though..... Quote Link to comment Share on other sites More sharing options...
Turbocharger Posted February 28, 2007 Share Posted February 28, 2007 ... and this is the issue I face. I need to get info from someone I trust, ideally from lots of people I trust. Frankly, I trust you guys on here more than someone I meet once or twice through my bank/accountant/from an advert. If he was so good, how come he's not making his money that way, instead of advising me with mine? The idea of mortgaging, reinvesting and using a management company has been tried before, but when I get calls at 4am from the 'management' company saying the boiler's bust and asking me to travel 200 miles to fix it, I lose my faith somewhat. Where to get a decent manager or estate agent? You'd do better looking for sensible legal advice... Thanks for the info so far guys - it's good to get another perspective, and especially from people who've been there before. Quote Link to comment Share on other sites More sharing options...
simonr Posted February 28, 2007 Share Posted February 28, 2007 You can trust me - i'm kind of a Doctor. (kind of a made up kind ) How about fitting the top floor & attic with lots of sodium vapour lamps, cultivate your gardening skills a bit and turn the ground floor into a drugs den? The income would largely be tax free and you would be providing a service to the community as well! You might have to eat a few more pies and wear a long coat though to keep the customers in order. Tell you what - you could run a bus shuttle service too!? Si Quote Link to comment Share on other sites More sharing options...
Steve Hiatt Posted March 1, 2007 Share Posted March 1, 2007 John When I was looking at selling a rented home I searched for 'buy to let' and tax on Google. There is a fair bit of information from a number of sources. Once I was better informed I asked my accountant and he pretty much concurred with what I understood. I would only use a financial advisor to raise money, again you can research the different products online to make sure you are not being shafted. I have always used a chap in Bristol, Steve Mears. I have known him since the late 80's, he's one of the good guys. Quote Link to comment Share on other sites More sharing options...
Guest diesel_jim Posted March 1, 2007 Share Posted March 1, 2007 Puggy-no mates!!! Quote Link to comment Share on other sites More sharing options...
Stephen337 Posted March 1, 2007 Share Posted March 1, 2007 When using a financial advisor you need to remember who is paying the bill. You have two options: 1 - Being charged for the advice (per hour!) 2 - The advice is 'free' and the bod takes a kick back from any products they sell to you. If you are being charged for the advice then make sure you ask what happens to the commissions for any products they end up selling to you. Good firms will tell you that they dont take the commission to give you a discount. If the advise is 'free', check their marital status, if they are divorced and having trouble with the payments then it may sway what they sell to you (ie bigger commision!). This type of advisor have an incentive to sell you the most expensive policies. Remember Im not qualified in anything... Quote Link to comment Share on other sites More sharing options...
SteveG Posted March 1, 2007 Share Posted March 1, 2007 And after all houses are far better than any Pension you can get. I wouldn't agree with this advice. This is based on recent history in an extremely artficial housing market of the UK. The blind faith that house prices can keep going up year on year is unfounded and any economist will tell you so. The average ratio of income to housing payment is fast approaching 40% and it will reach a point where it can not be maintained and a price correction will happen. I'm not predicting when, but it's pretty safe to say that it will happen. I would spread your investments elsewhere as well as housing and look at using as many tax free saving options as possible to offset the capital gains tax. There will probably come a point when one of you will need the cash for something and you'll have to sell. Mark's advice of talking to an accountant is a good one. Cheers Steve Quote Link to comment Share on other sites More sharing options...
Jen Posted March 1, 2007 Share Posted March 1, 2007 Have to agree with Steve on this one. We've been renting my old house out for the last 18months and recently took the decision to sell, it's going on the market next week. The costs can seriously add up with the odd thing, running repairs, tax on the income, tax on the capital gains when you sell, insurance this, insurance that etc. Common practise and knowledge suggests a long term gain of about 5%, about the same as a high interest savings account! And of course the worry that you'll get a bad tennant and having to stump up for repairs then and there no matter if the Landy's cost you a bit that month or not. Those that make the serious money brought and sold when the housing market was good... of course predicting the housing market is about as reliable as my SII Practically it wasn't worth the risk for us, but something worth considering. As for your dilemma, proffessional advice has to be the way to go, for the money you'll potentially save it's gotta be worth the small investment. Quote Link to comment Share on other sites More sharing options...
Mark90 Posted March 1, 2007 Share Posted March 1, 2007 Common practise and knowledge suggests a long term gain of about 5%, about the same as a high interest savings account! : But the advantage with rental property is that on top of the gain in capital value, you also have the rental income which either provides you with some extra income or if you have a mortgage it pays that off so essentially somone is buying the property for you. Yes there are risks and drawbacks, bad tennants etc (we're in the middle of evicting our current tennant). Hopefully by the time I retire the rental flat will have been bought and paid for and will be providing income to top up my pension. Quote Link to comment Share on other sites More sharing options...
Jen Posted March 1, 2007 Share Posted March 1, 2007 But the advantage with rental property is that on top of the gain in capital value, you also have the rental income which either provides you with some extra income or if you have a mortgage it pays that off so essentially somone is buying the property for you. No - those figures were taking into account rental income *and* that total gain at the end. I can't remember which reports suggested it, but I know they were numerous (I read alot whilst I was making this decision) all giving around a 5% p/a gain at the end, below the majority of other investments. That's not to say we won't get another rental property in the future, but I'll give it a few years yet. Quote Link to comment Share on other sites More sharing options...
Les Henson Posted March 1, 2007 Share Posted March 1, 2007 http://forums.lr4x4.com/index.php?showtopic=12208 Quote Link to comment Share on other sites More sharing options...
Mark90 Posted March 1, 2007 Share Posted March 1, 2007 I find that hard to believe. Just done some compound interest sums. Take a £20k investment over 25 years... 5%pa equates to a future gain of £48k giving a total of £68k. But invest that £20k in a £100k property. After 25 years the rent has paid off the mortgage and assuming no increase in property value your investment is now worth £100k, so that's £32k better off than a 5%pa increase. However if we assume that the property values remains the same in real terms and goes up with inflation (realistic?) and lets take a conservative inflation figure of 2% the the property would be worth £164k. So you are now almost £100k better off than a 5%pa return on your initial £20k investment. To better that with your basic £20k investment you need a reliable 9% return year on year for the next 25 years. However if the ecomomy is doing that well then then there is every possibility that the property would have done even better. Ok this is all rather simplified and doesn't include tax, and I am in no way a qualified IFA or accountant. Quote Link to comment Share on other sites More sharing options...
Turbocharger Posted March 1, 2007 Share Posted March 1, 2007 The issue I've found is mainly just the hassle factor. The income and asset appreciation are significant, but so is driving 200 miles to evict a tenant, only to find he's fled and taken your carpets and interior doors! The management company were hopeless (they gave the deposit back) and it makes the tidy return on investment less attractive. Some food for thought here guys, thanks for your views. I think independent advice may be money well spent, especially if it explores options outside property investment too. Since this is so far off topic, I guess it can go to the graveyard now unless anyone else is interested? Quote Link to comment Share on other sites More sharing options...
will_warne Posted March 1, 2007 Share Posted March 1, 2007 I had this before. Can't remember ho it happened but it was something along the lines of opening PM's on differant windows. It disappeared after logging off and loggin on again. Quote Link to comment Share on other sites More sharing options...
rtbarton Posted March 1, 2007 Share Posted March 1, 2007 Just one more point - approach some letting agents on the PRETEXT that you'll be using their services. You may may be able to glean some good info for free. Quote Link to comment Share on other sites More sharing options...
Jen Posted March 1, 2007 Share Posted March 1, 2007 Ok this is all rather simplified and doesn't include tax Exactly, or insurance costs, agents costs, running costs, repair costs.. the list goes on and on. Like all investments it's a personal thing, as long as you're happy with your choices. Peoples experiences will vary. Quote Link to comment Share on other sites More sharing options...
white90 Posted March 1, 2007 Share Posted March 1, 2007 time for some entries Quote Link to comment Share on other sites More sharing options...
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