richard brown

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About richard brown

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    Obsessed member!

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Profile Information

  • Property investment interests
    Value-adding refurb
    Single let
    Holiday / short-term let
    Trading / Flips / Development
  • My skills
    Commercial & strategic approach
    Knowledge sharer & mentor
    Blogger / writer
  • My goals
    I have 3 principal aims (my SMART goals are more specific):
    1. Through property to generate an income stream that would allow me to chose my lifestyle, location and daily activities that would include fun-filled 'work', helping others to grow & develop and lots of travel, leisure pursuits and that kind of stuff!
    2. To write at least one book...more likely 3 ;)
    3. To coach and mentor others - enjoying thanks & 'likes' for the free content along the way
  • Interests outside property
    My family, sport, travel, music and occasionally throwing myself out of an aeroplane at 10,000 feet, free-falling for the first 7,000 :)

Recent Profile Visitors

992 profile views
  1. A little ray of sunshine from Taylor Wimpey...which hopefully will set a precednt for the others here: How is your case going? Richard
  2. Hi David I know your question is more about financing, but it does raise other questions too...such as capital to continue invest and working capital to undertake more significant works, assuming you still want to grow. As for the financing, you would effectively become a 'professional landlord'. There are mortgage products our there that would take you property profits into account when deciding to lend to you. You need to be self-employed with enough net profit to meet the lender criteria, usually at least £25k per year. I guess if £1500 per month is net profit, then it might or might not meet the lender criteria...they may need £2100 per month depending on how they define earnings (before or after tax). You could also set up via a limited company and receive a salary & dividends (for what worth now!), but you would still be classed as self-employed. Not whole of market but you will have some lending options therefore. What a lot of people overlook is how they will continue to invest once they reach this point and also some of the larger, but less frequent works like boiler replacement, roof repairs, upgraded kitchen / bathroom and those sorts of things. You will need money for deposits and fees on new investments and a fund to cover these larger but essentially irregular expenses. In reality, it usually means you actually need a higher income from property than that you need to fund your lifestyle costs alone. Some people fudge the last two requirements by constantly refinancing but that system is somewhat flawed for a number of reasons, especially if you are investing in personal names. So, there's some good news and perhaps some not-so-good news in there. Best Richard
  3. I was feeling left out, until I also received this 'opportunity' today I really can't say why I did this, but a 10 mins browse found the following info... Similar property advertised by the developer at £120k minus the furniture pack (I assume off-plan): Best sold price comparable is £109k from April 16 but also has a garage, so adjust for that and date sold: I found a couple of other sold comparables at around the developer price or higher but they had a garage and one also a conservatory. Best rental comps are this one at £625 pcm but has a garage, so discount the achievable rent for that: or this one, also with a garage at £550 pcm: Best to check with local agents whether renting furnished is in demand and commands a premium (also that the furniture is actually useful, especially the bed sizes!). There are a 12 x 3-bed properties advertised for rent on Rightmove within 1/2 a mile and only 1 is let agreed, which perhaps suggests weak rental demand / high rental supply locally. Hope that helps, Best Richard
  4. Expat-friendly banks, yes HSBC for resi and simple BTL, also Skipton International and you can also try Shawbrook for more commercial arrangements including BTL.
  5. Hi Matthew Rogerh is right but there are several ways to make this strategy work aside from renting by the room (multi-let). You can make a margin between the rent you pay and the rent you receive in a few ways, such as: Single let - by agreeing to pay the owner a lot less than the market rent and / or by charging a premium in the rent you receive. You can achieve the former by taking over the management and some maintenance or just the hassle from the owner (a non-landlord may be happy to rent it out simply to cover the mortgage payments say). You can acieve the latter by changing the tenant type (e.g. LHA or corporate let) or by upgrading the appeal of the property such as by decorating it or furnishing it. Muti-let - as Rogerh suggests by converting it into a room rental instead of a single let. Short-term let - by converting it into rental by the night / week instead of on a regular AST. This is a variation of a hotel model. A variation is a hybrid with a mix of short-term letting in part of the year and a longer-term let for the remainder, such as students for say 10 months and occasional visitors for the remainder. There is a lot more to it and there are risks and compliance matters to consider, but this deals with the principle at least. Best Richard
  6. Hi Trevor Yes, you are correct as the restriction will be introduced on a phased basis over 4 years. For everyone's benefit, see Example 3 on this HMRC website: Note, that in this example, total income to determine this taxpayer's (Jennifer) tax rate is bumped up by 25% of her mortgage interest costs or £2,000 in this tax year. Next year it would be bumped up by £4,000, then £6,000 the year after before the full £8,000 in tax year 20/21. Jennifer would only be classed as a higher rate tax payer if the restricted allowance pushed her into a higher tax bracket (i.e. 'earning' above £43,000). Of course the £2k, £4k, £6k & £8k interest relief penalties are not actually income at she would be taxed as a higher rate taxpayer on income she did not actually receive...either at her basic rate if this is her actual position, or at a higher rate if in fact her earnings to determine her tax rate pushed her above the £43k basic rate of tax limit. So, if she earns over £35k (ignoring mortgage interest) by 20/21 she would then be classed as a higher rate tax payer. Note that £8k in mortgage interest would be equivalent to around £229k in mortgage debt based on a 3.5% interest rate. The current average house price in the UK is around £217k, so it does assume Jennifer has more than one 'average' property. I know I am labouring the point but there are two things going on with this tax change: paying more tax on mortgage interest if you are already a higher rate taxpayer and also the potential to be pushed into a higher tax bracket from being a basic rate taxpayer due to the way mortgage interest effectively gets added to income to calculate your tax bracket. Jennifer clearly won't be affected by the second point or the first one due to her generally lower total earnings, even after allowing for the mortgage interest being classed as income for tax rate calculation purposes. The idea of the phasing is to give time for people to plan and make changes. However, by making it a relief rather than a restricted tax deduction, it will inevitably push landlord's income for tax purposes up as well. But, yes in summary - the phasing does ease the pain just a little Best Richard
  7. Hi there a1terrier! How about 30 ways to fund your property investments? An unashamed plug for the latest The Property Voice Podcast series; In your case, I would take a look at commercial finance / loans, crowdfunded loans and explore expat mortgage options with your bank (or change to an expat friendly bank!). Best Richard
  8. Hi James No problem! I am aware of lots of regeneration taking place in Hull and so it does give a good indicator about future growth prospects I agree. My comments were aimed at helping to 'future-proof' your investment more than anything. I am sure you can achieve short-term profits without getting a licensed, large HMO (with planning approval) in a boutique style...but for how long? Some property strategies achieve profits with a quick in and out (e.g. trading or development), whilst others require careful planning, nurturing and defence (e.g. BTL in all it's guises). In fact, this discussion has probably prompted a blog or article on the thank you for that! Anyway, it's your train set as I recently heard someone say All the best Richard
  9. Hi John This is the second time in a short period that I have heard about this offer. I was asked about it by a mentee. The big questions to ask before deciding are these: 1. Can you get a mortgage on the purchase with the developer being both vendor and then tenant? You may need to wait until next March before you can raise finance on it if that's what you want to do. This will mean you cannot increase your returns through leveraging if you cannot get a mortgage...which you may be ok with? 2. What is the market value of a one (or more) year old property in the local area? Claims of BMV fall on death ears for me unless it can be realistically evidenced by recent and similar sales comparables...don't forget that your show home will have some wear and tear by the time you get to take it on and will you actually rent it fully furnished anyway (i.e. what is the furniture pack actually worth anything to you in reality when compared to buying a one-year old property say)? Again, you may need a mortgage valuation, so make sure it will stack up to a hard-nosed valuer. 3. What is the realistic rental income potential once the developer may get £731 / 8% net for up to a year but then what? Work out your calculations as if you were renting to a regular tenant to see if the project still stacks up long-term or not. 4. Don't forget to check the affordability of the developer for the rental payments along with the usual checks around the developer quality, NHBC guarantees, etc. on the purchase side of things. Each person has their own objectives, criteria and KPIs to meet, so after all it's your call. Personally speaking, I am not a big fan of off-plan in general as you can see here: but that's just my personal view Best Richard
  10. Hi James I am aware of Hull as an investment location and have some local interest and knowledge, albeit starting to become quite dated...but as a result I do try and pay attention to what happens there. The first thing I always say is to look for any personal motive when someone tells you to do or not do something. If they are not selling you the idea for personal interests then you can probably have more trust in what they are saying (ignorance excepted!). Even so, do your own checks but some sales people do actually tell the truth I would say that the student market in general is becoming far more professionalised and is more and more being operating by larger corporates (with or without the direct involvement of the Unis). This means higher standards and greater competition as a a result. Does it mean that you cannot profit in such a market as a smaller landlord /, you can still. But it does suggest that you will need to up your game to do so and the long-term picture may prove to be trickier. There is also a shift in general to professionalise the PRS more generally, but outside of the student market, this has not so far really been targeted at multi-lets but single lets instead. There are exceptions, especially in London, but in Hull I would say that working tenant HMOs have some legs yet still. My final point is that anyone can pretty much create a multi-let e.g. a 2/3-bed house with living room as a bedroom becomes 3/4 people sharing, with very little in the way of conversion and no planning or licensing requirement. I do believe that the days of this type of multi-let will become more limited and that the market will move toward more en-suites / less shared facilities, higher spec, superfast broadband, and so on. From a profitability point of view, it's usually the 5th room (or more) that brings the real profit! Finally, there is a Gov consultation around making all 5-bed HMOs licensed regardless of how many floors are in the building...which would mean higher standards for the profitable ones and leaving the unprofitable ones to have a race to the bottom. So, if I were to venture into multi-lets in Hull, I would aim to do more than simply buy a big house and rent it by the room. I hope that helps, Best Richard
  11. Hi Lee Thank you for sharing your personal journey over the past decade...I can relate to many elements more than perhaps some people might think. As a result, I found myself restarting with no assets, no pension and very little in the way of capital to invest, along with a divorce and similar challenges with my children. Fast forward to today and let's just say the contrast in my life is like night and day, I am very happy to say. Part of what I did to turn around things with property was to use OPM (other people's money) in the form of JVs. This allowed me to take on bigger projects than my modest personal funds at the time allowed. I also undertook value-adding strategies to make my funds go further and be recycled to a large extent. So, that's perhaps something for you to consider. However, perhaps in your case, you also have a skillset that may be of greater value than even straightforward professional fees may suggest. For example, if you could find projects with planning gain potential, you could potentially use this as part of your 'skin in the game' in a project and attract JV investment to share between you. I have other ideas, but I suspect the £15k to £20k figure could be used up pretty quickly as you are currently thinking, so I thought I would suggest something a little more entrepreneurial for you to consider. I hope that helps your thought process, Best Richard
  12. Hi Ken Simple answer: yes, but only against the capital gains tax and not income it's only any use if or when you come to sell in other words. Best Richard
  13. Liking the access 2 view link Jayne, have you used them from a potential buyer's point of view to undertake viewings on a potential purchase (most of their pricing seems to be targeted at owners and agents)? If so, I am seeing a new resource to add to my list
  14. Hi Andrew I travel...a lot! So, I know all about this one... It's a case of risk mitigation really. Here are some of the things that I do here: 1. Do as much research remotely and pre-visit as you can, such as Google Earth & Street View. They only show the general area and are often out of date so this is just a guide. Also, look for previous listings of the property for sale and for rent and don't forget that there are 3 main portals (plus a load of smaller ones), so check each of them. 2. Speak to any agent involved and get their opinion of the property. 3. Ask someone to go and take a look at a property but not just a random friend or family member, they should have some property experience e.g. estate / letting agent, builder, surveyor, experienced investor or general property manager for example. 4. Get whoever goes to take photos and a quick video if possible, also to complete a general visit checklist which prompts them to look at certain things you specify 5. Pay for a survey or an experienced property person to go and undertake the visit. 6. Up your contingency provision to price in for any extra risk of not actually seeing the property personally if necessary and if it still works all well and good but if it then falls below your benchmark return, consider coming to look yourself or get a professional survey done as per point 5 above. Everything is possible, even remotely but don't let the remote aspect lead to you being blind-sided. Good luck! Richard
  15. Hi Jamie Yes, paying cash will help in a number of ways! That's the best way to do these smaller deals, but obviously means tying up more than £30k at a time Good luck! R