F
Fosse
New Member
Hello, I am in the process of writing a business plan for a buy to let property company that I want to start at some time in the next 12 months. I have read a lot of helpful posts on this forum but I am looking for some niche advice for my specific situation and wondered if I have considered everything correctly.
I have around a million pounds that I would like to begin investing in property & I'm looking for the most efficient way to do so, it's worth saying at this point that I'm not looking to make quick money, I want to continue to invest and reinvest in property for the foreseeable future - for this reason my plan in a nutshell is to purchase between 10-12 "ready to rent" properties to get the Cash-Flow going and basically use the rental returns from each property to purchase more properties once there is enough cash available after management fees / maintenance / overheads.
I'm not in a rush to buy the next property, I will do so when the money is there. My goal is to build a nice life for me and my family, I don't want to get involved in HMO's, Student lettings, buying low and selling high etc. to begin with as I think that would make things too difficult and complicated for me. I would like to diversify and try other things in the distant future but this is the plan for now.
My main question is, am I best to start up a LTD company or work as a sole trader? From research everything is pointing towards LTD company for me for the following reasons;
1) I don't want to spend any of the money earned from rent, I want to reinvest - on paper if I reinvest the money earned in to new property then the company will not be in profit, I will not take a dividend but may take a tiny wage. Does this make sense? Am I missing any form of tax that will hurt the business in the long run.
2) I don't want to sell any properties, just remortgage or sell to pay off the property after the initial 25 year mortgage term. The only risk I can see is the properties falling under the value of the mortgage and the banks calling the money back... does this happen? how risky is it?
It seems that as long as each property is at the very least earning back enough to cover the interest only mortgage then I will not lose any money.
I will be getting a lot of proper formal advice before starting up and I'm spending a long time researching before doing anything but I'd love to hear from anybody that's started in or is currently in a similar situation and had success. If you see a tonne of red flags in my line of thinking please let me know, I'd love to learn now rather than learn later.
Also if there is any specific books, studies, documentaries, interviews etc that are essential please do send over a link. Thanks all!
I have around a million pounds that I would like to begin investing in property & I'm looking for the most efficient way to do so, it's worth saying at this point that I'm not looking to make quick money, I want to continue to invest and reinvest in property for the foreseeable future - for this reason my plan in a nutshell is to purchase between 10-12 "ready to rent" properties to get the Cash-Flow going and basically use the rental returns from each property to purchase more properties once there is enough cash available after management fees / maintenance / overheads.
I'm not in a rush to buy the next property, I will do so when the money is there. My goal is to build a nice life for me and my family, I don't want to get involved in HMO's, Student lettings, buying low and selling high etc. to begin with as I think that would make things too difficult and complicated for me. I would like to diversify and try other things in the distant future but this is the plan for now.
My main question is, am I best to start up a LTD company or work as a sole trader? From research everything is pointing towards LTD company for me for the following reasons;
1) I don't want to spend any of the money earned from rent, I want to reinvest - on paper if I reinvest the money earned in to new property then the company will not be in profit, I will not take a dividend but may take a tiny wage. Does this make sense? Am I missing any form of tax that will hurt the business in the long run.
2) I don't want to sell any properties, just remortgage or sell to pay off the property after the initial 25 year mortgage term. The only risk I can see is the properties falling under the value of the mortgage and the banks calling the money back... does this happen? how risky is it?
It seems that as long as each property is at the very least earning back enough to cover the interest only mortgage then I will not lose any money.
I will be getting a lot of proper formal advice before starting up and I'm spending a long time researching before doing anything but I'd love to hear from anybody that's started in or is currently in a similar situation and had success. If you see a tonne of red flags in my line of thinking please let me know, I'd love to learn now rather than learn later.
Also if there is any specific books, studies, documentaries, interviews etc that are essential please do send over a link. Thanks all!
