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Improve the property, improve the valuation

THE QUESTION

There’s a house I have seen, it’s a three-bed house on a street that consists of just three-bed houses all around the £92k mark

Except there is one house on the street that’s had a really good loft conversion that’s added 2 bedrooms and another bathroom and it sold a few months ago for £165k

If I buy a house on this street and do a conversion to...

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‘Property is for mugs’

Anyone who isn’t familiar with property investment will tell you that it’s the quickest way to lose your money or to get stress overload.  However, that doesn’t explain why so many people are serious property investors.

The tax regulations for landlords and investors have changed over the past few years and it’s important to abide by the rules to protect your...

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One house, many homes

THE QUESTION

I have seen several large houses for sale in auctions that have been split into self-contained flats; it seems quite common.

The house is on one title the agents describe it as a ‘large house currently being used as flats’.  But there doesn’t seem to be any planning permission for use in this way or building regs for extra kitchens and bathrooms.

I...

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Unmortgageable? Disaster or deal?

When a property is unmortgageable that rules out everyone who hasn’t got a big wad of cash to buy it outright.  In any case, who would buy an unmortgageable property? Doesn’t that mean it’s a lemon?

No, unmortgageable properties can have substantial profits locked inside the front door!

The problem is that mortgage lenders are conservative and keenly focused on only...

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How does the six-month rule work?

THE QUESTION

If I purchase a property at auction with cash or bridging finance, does that mean I don’t have to wait six months before refinancing?  I’ve heard that there’s a ‘6-month rule’ that requires me to wait for that period of time.

Also can I refinance at the full market value?

Are there any work-arounds to this?

THE ANSWER

Some lenders choose to apply...

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Mortgages with No Early Redemption Penalty are dangerous

People say that a low-cost way to get your cash back out of a property purchase is to use the small group of Buy-to-Let lenders who offer mortgages that have no redemption penalty to finance the purchase.

After you have owned the property for six months, redeem that mortgage and get a new mortgage with a different lender.  If the property can be valued at this point at more than the...

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What is equity release?

THE QUESTION
I've seen a lot of adverts recently for Equity Release, does anyone know how it really works?

THE ANSWER

Equity release has two meanings.

For the general public it refers to a specific type of mortgage available only to the elderly who are asset rich, but cash poor.  In effect it means that they can borrow against their property and use the cash to enhance their lifestyle or...

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The times they are a-changing

The underwriting standards for buy-to-let lenders now mean much more rigorous background checks for potential borrowers – particularly ‘portfolio landlords’.  The rules state:

“A landlord will be considered to be a Portfolio landlord where they have four or more mortgaged buy to let properties across all lenders in aggregate” 

In reality this will depend...

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Retirement properties – a good deal?

THE QUESTION

Do you have experience with renting Retirement properties?  Is it a good idea to buy a flat at the seaside and rent it as a retirement property?

THE ANSWER

There are two issues here:

  1. Renting properties that are part of a retirement complex.
  2. Buying a flat and renting it to a retired person – or people.

Number one is a great idea if you have cash to burn! No mortgage...

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Leveraging your investment by going Limited

THE QUESTION

Can you buy a property for cash, using other people’s funds loaned to your Limited Company, carry out a refurbishment and then remortgage on to a BTL, hopefully releasing some equity to pay back the investors their initial stake in addition to their margin of interest?

Following the remortgage the property will be solely owned by your own Limited Company and the initial...

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