Was planning to just collect on the money and any further revenue (on top of a 2y of expenses buffer) would go towards purchase of another property to let
I would also set aside probably another 6-12 months extra to account for legal fees on the off-chance i get a bad tenant.
non-deductible? if it makes a difference, i would be making the purchase through a holding company
On tax. Mortgage interest used to be a deductible expenseâŚ
This is a pretty okay option for me, I already have to complete Self-Assessment so becoming a managing director of a limited company wouldnât negatively impact my financial affairs significantly
But again, there are costs with setting up and running a Ltd. So may not suit your setup. Self-assessment and Ltd are not similar at all!
Final thing - think hard about the specific market you want to get into.
I went for high turnover properties in a part of town that sees a lot of younger professionals who come along for a year or two at the most and want hassle-free, decent places to live, are not interested in buying, but similarly donât want to splash all their cash on somewhere fancy. It takes a bit more legwork to find new tenants every six months to a year or so, but itâs pretty straightforward. The returns arenât crazy, but itâs steady.
Hmm, is that so? Both are forms of self-employment in my view but I guess one is a legal entity of its own and the other just an extension of yourself
Iâll seek some legal advice anyways before I go any further, to make sure I fully understand the obligations of becoming a director and how I can comply with those as digitally as possible haha
I think Iâd like to get into similar to the market youâre in, except I am contemplating instead of going for high-turnover, maybe buying property near company head offices and aiming to get someone whoâs not necessarily looking to settle in place, but are looking for accommodation as they work their way up the corporate ladder at a single job.
That way I can always retain ownership of the home, while having stable well-paid income from a reliable tenant. Obviously clear-sky thinking, but I can only think at this stage.
Am I missing something? A couple of months back you were saying your parental stipend would make jimmying the amounts required by a Halifax Reward bank account awkward, now youâre looking at investing in property?
Have you come in to a huge inheritance or something?
I think you should show some respect, that is Lord Recchan you are addressing 
Never hurts to dream I guess, but I tend to judge people who invest in buy to let while living off their parents to even a small extent quite harshly.
Youâre more than welcome to judge whatever, but know that you donât have the full picture of my familial finances to judge correctly
You mean minimise the financial risk. There are other risks to consider if youâre going in together.
I think thereâs a distinction between a buy-to-let and a holiday home. Itâs the holiday homes that are left empty for much of the year that they want to tax to hell --and they should.
For a buy-to-let Iâd like to see no-fault evictions outlawed and for custodial sentences for anyone who evicts a tenant for complaining about their slum-like conditions. If theyâre not going to maintain their property they shouldnât have one.
If you are just looking to invest, try a REIT, perhaps.
This country needs a housing inspectorate with power to take over a property and collect any rent directly, on top of fines and prison sentences. Hefty fines for estate agents who are happy to market unsafe properties would also helpâŚ
Local authorities do have the power to license and regulate private landlords. Iâm not sure that many do.
âPowerâ is a bit of an exaggeration, though technically true 
Council created a licensing zone down some of the worst roads near me. I think they forced a couple of landlords to rip out dangerous stuff and put in double glazing (with government subsidy, I think! ). But they are still semi-derelict by any reasonable standard⌠19th century roofs that were built by the street donât help. If councils had the power and the money to take control of a property and bring it up to a decent quality overall inside, outside, capital improvements), now that would be interesting. There would be thousands of properties round here thoughâŚ
I could leave mine empty and falling apart and still make capital returns, because the whole housing stock is in this weird asset alternative reality, instead of focused on delivering a competitive service at a competitive priceâŚ
Leasehold agreements are another bugbear. So many were written in the 70s and 80s that now just arenât fit for purpose. Itâs too complicated to go to the tribunal when you have 40+ âlandlordsâ in just one block, so nothing gets done. Takes just a couple to say no and you are in for a massive uphill battle. Council power to modernise the terms would let managing agents and any âactiveâ landlords put in improvements. And thatâs before you go after the freeholders in the BVIâŚ
Etc etc ad nauseam
Letâs put it this way, when I witnessed first hand all of the issues I have previously mentioned, the Council were initially reluctant to actually take any action. It took a great deal of effort and a few of my neighbours to weigh in and literally force the Council to take action. I wonât go into the details, but eventually, the threat of involving Government agencies external of the Council themselves, eventually did the trick. It did thankfully, eventually, lead to the successful prosecution of the landlord, but only after a period of surveillance on the property involved. The landlord protested they knew nothing of what was going on. There was no excuse though, even living several hundred miles from their buy-to-let didnât save them and it was clear they werenât using a letting agent. From what I understand, the whole saga cost them a huge amount of money, in both legal fees and putting the house back to a standard that was liveable.
Itâs a statement of fact. They have the power to do it. Whether they all do it all of the time is another matter.