Best way to invest £100K???

[iwhanmer]

Hi All.

I am a novice at property developing and I am hoping to get some advise and suggestions. I currently have 5 buy to let properties that do well enough to pay the mortgage on my current residential property. I loved renovating them properties ready to rent out and I hate my current full time job.

I have saved £100,000 and I am hoping to quite my full time job and use this to become a full time property investor. I would need to make an income of around £2,500 in order to quite my job and hopefully have potential to increase this over time.

Dose anyone have any suggestions on the best way to do this???

I am thinking a buy renovate and sell strategy? Any advise on what the best locations are (I am very flexible on location) to do this with only £100K and how to find the properties that need renovation?

Thank you for any advise you can give me I realise this is a broad question but as I said I am only a novice.

Cheers

 

[postcodr]

Hi iWhanmer

You need to bear in mind that if you follow the buy-renovate-sell strategy, you need to give some careful thought to the tax implications. HMRC are likely to class you as a 'Property Developer' so any profit you make on the sale will be taxed as trading profit - i.e. you'll pay income tax and NI on your profits.

You could potentially work around this if you lived in the properties as your primary residence while you complete the work. I think I'm right in saying that HMRC typically look for 6 months residency for a property to qualify as a legitimate primary residence. If you can manage that, then you could theoretically tun around two properties a year with tax-free profit.

I recommend you get some professional financial advice and do some of your own thorough research before embarking on your adventure.

Good luck...
Dave

 

[totallyproperty]

Hi Dave

This reminds me of the situation with MPs in the UK - they can flip their properties (ones they acquired and ones paid for by tax payers for business) to save paying capital gains tax. There is no such simple solution for everybody else in the UK.

You are right to advise caution as misunderstanding the tax implications could lead to some big financial shocks.

Regards,

Mark