Property - Stick or Twist ?

[Highandhappy123]

Hi all ,

Just wondered if anyone has any thoughts re this situation re finance / property (I will cavate a novice just pondering)

So by luck more than being wise , I have inherited some property, this will bring in a sound income , but could I do more ?
Property is a couple of London flats , and some commercial property in the SW. Total value is around 2 million , all mortgage free. Its all being let / managed by agents and as above providing an income.

I suppose my ponder is should I try and mortgage an element of it, and then use that to buy more? (residential units I guess) the mortgages get paid , ultimately more assets and income.
I appreciate there is much more to it, and with growing the portfolio comes more risk / leveraged borrowing. Any thoughts to ideas? What would your approach be ?

I will no doubt get some financial advice , but just exploring what is possible.

[Highandhappy123]

Many thanks, and yes many questions to ask/answer.

In regards to ownership personally owned and thus being taxed on top of day job. The commercials have some covid issue / no rent , but that will ultimately be resolved at some point.
Presently the total income is 60k ish pa .... I can see the benefits of letting this tick along forever , indeed a very good pension salary come the time. Equally I wonder if I can leverage the equity better , build more to ultimately pass on to kids etc.

I'm Mid 40s and employed, living in the SE so have a mortgage on main property etc.

[Highandhappy123]

yes indeed re tax issue , and that is underway.

Just that thought of doing more with the assets and giving up the day job sooner rather than later. To that end I could do with more that 60k, hence building more

[Highandhappy123]

re SIPP / limited company , is this possible ? I thought putting into a company would have tax implications in the first place ? Again more to research !

[Highandhappy123]

and re the yield , income will probably be a bit more that 60k... a couple of the commercials are defaulting etc , and the London rents lower than would be expected , and also probably worth a little less than 2 mill. Again , new to this so numbers a little off.

I will probably sit on it for a year or so and see, but thinking more I should leverage and expand / spread risk. Equally the fact that all the income is not paying off debts is an attractive situation.
But that's the ponder, take on debt to actually make more income / longer term assets

[Highandhappy123]

BoRED S2upid said:

Yes you have to sell them to the limited company. So there are costs associated with the transfer. But it could make long term sense.

I guess I need to work the numbers , as stamp duty / transactional costs will be large versus the longer term tax benefit. And I don't have lots of liquid cash to pay transactional cost.

Maybe best to just bury my head and take the income !

[Highandhappy123]

Many thanks for the replies, certainly some options / strategies to explore.

I like the idea of mortgaging to provide cash for some other investments , equities or maxing out isa's etc.
Whilst property has been lucrative in the past ( and yes I have made money on primary residence) maybe its better to try and diversify.

I do fancy a vintage porsche for one