Real Estate Information

Luxury Real Estate Information


Rancho Palos Verdes, California Homes
Palos Verdes, California Homes
South Bay, California Homes
Luxury Mexican Beachfront Homes

Featured Properties


Oceanfront Estate Near Trump National

Related Information


Loan Information
Real Estate Information
Mortgage Refinance Information

Buy to Let Property Investment


In recent years buy to let has been a popular way of investing in residential property. Stock markets are out of favour with many investors who have seen the values of their portfolios, endowment policies and pension funds shrink, whereas property has generally continued to rise in value. Interest rates are at historically low levels and mortgage finance is readily available on competitive terms from major banks and building societies. This brings property investment within the means of more investors than ever before. In these notes we will take the example of a foreign domiciled person, a non-resident of the United Kingdom, buying a property in London with the benefit of loan finance, but the general principles can apply to many other markets.

Buying to let pre-supposes that there is a tenant willing to rent the premises and provide the cash flow, which will service the borrowing and is only one of the factors, which need to be taken into account before entering into a commitment. These can be summarised under three main headings.

The Property

It has been said that the three most important matters to take into account when buying property are location, location and location and this maxim holds just as true for investment property,

? It should be situate in an area where tenants are looking to rent

? It should be attractive to tenants and be, for example, an apartment, penthouse or a period or modern house. Listed buildings or converted churches may have their appeal but it is to a narrower market

? It should be in, or brought into, good condition.

? It should be in an area where property is in demand, making a resale easier in the future.

The Finance

For the right property mortgages are available both onshore and offshore, at competitive rates, from many of the major lending institutions and the terms can be negotiated. It is possible to obtain a loan on a repayment or interest only basis and for an agreed period. Whilst higher percentages are sometimes available we suggest not borrowing more than say 70% of valuation to avoid a cash flow crisis if interest rates rise and to allow for periods when the property is vacant. The lender will also be looking for a monthly rent of the order of 130% of the monthly repayment.

Taxation

In the United Kingdom the investor will need to take into account the three main direct taxes,

? Income tax, which is payable on rents. Loan interest and the costs of repairs and maintenance are deductible

? Capital gains tax, which is not payable by a non- resident on the sale of a property held only as an investment and not as part of a trade or business.

? Inheritance tax, which is charged at 40% on the amount by which the aggregate value of chargeable assets exceeds a threshold, currently 263,000.

Exposure to taxation can be limited if, instead of the property being registered in the name of the investor, the title is held in the name of a company formed in a tax free area, the British Virgin Islands for example. This subject is covered below.

There is of course one other important factor in this equation,

The Tenant

It is important to take up references on a tenant both to ensure that he can pay the rent and that the occupants are likely to keep the premises in good condition. Amongst preferred tenants are professionals such as bankers, stockbrokers, financiers, solicitors etc. many of whom require a property only when they are in the city and who have no interest in purchasing.

Furnished or Unfurnished

This is a decision to be taken in the light of the objectives of the investor. If he is looking for a long- term tenant, unfurnished may be the answer. The typical tenant described above may prefer a furnished property however.

Structuring the investment

As mentioned above, in order to reduce exposure to taxation, the property should be registered in the name of an offshore company, the shares in which are owned by the investor. By this means our foreign domiciled, non-U.K. resident investor can,

? Eliminate completely any liability to inheritance tax

? If each property is held within a separate company, avoid the risk that on a future sale the proceeds will be treated and taxed as trading income.

It is very important that the company itself be managed and controlled from a non-taxing jurisdiction and this is where the Chesterfield Group can help. Our services include,

? Forming the company in a suitable location

? Acting as Directors and Secretary

? Maintaining the Registers and filing the returns required by law

? Keeping the accounting records and preparing annual financial statements

? Filing the tax returns

? Liasing with solicitors, property managers etc. as required

The Chesterfield Group provides a full range of trustee, and corporate advisory, formation and management services and invites enquiries. More particulars can be found on our web-site http://www.chesterfield-management.comRef=CH1EZ


MORE RESOURCES:
This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news


Bloomberg

$1 Trillion Investor Says Now Isn't Time to Cut Real Estate - Bloomberg
Bloomberg
There may be worrying developments in some property markets, but the world's biggest sovereign wealth fund says it has no intention of pulling back from real ...

and more »


Portland-based real estate agency acquires Yarmouth competitor
Press Herald
Portland-based Portside Real Estate Group, one of Maine's largest residential real estate firms, has acquired competitor RE/MAX Heritage of Yarmouth for an undisclosed sum as part of an ongoing expansion effort in southern Maine. RE/MAX Heritage has ...



Greenberg Traurig's European Real Estate Team Guides Record-Breaking Investments in Vibrant Dutch Real Estate ...
PR Newswire (press release)
Greenberg Traurig assisted a consortium of French and South Korean investors lead by funds managed by Amundi Real Estate in purchasing "The Atrium" office project located in the South Axis of Amsterdam. The transaction was notable in that it was the ...

and more »


Architectural Digest

I'm Addicted to Late-Night Zillow Stalking
Architectural Digest
I am not ready to buy a house. I have virtually no money saved up for a down payment, I am terrified by the prospect of permanent roots, and, if I'm being completely honest, I still don't really understand how a mortgage works. But that doesn't stop me ...



New York Times

Real Estate Agents Mobilize to Shield Homeowners on Tax Plan
New York Times
For decades, the real estate industry has benefited from generous tax deductions that raise home values by making it cheaper for people to own property and shoulder their local taxes. Now, as the Republican tax plan makes its way through Congress, the ...

and more »


New York Times

Recent Commercial Real Estate Transactions
New York Times
$80/SQ. FT. $48,000 approximate annual rent. 149 Avenue C (between East Ninth and 10th Streets). Manhattan. A five-year lease is available for a 600-square-foot storefront with 16 feet of frontage in this six-story East Village co-op. The co-op board ...



Mansion Global

After Hurricane-Related Delays, Miami Real Estate Bounces Back
Mansion Global
Residential real estate sales in Miami bounced back in October after two months of delayed inspections, appraisals and closings following Hurricane Irma, according to a report Tuesday by the Miami Association of Realtors and the Multiple Listing Service.



Quartz

Nigeria's kleptocrats have a toxic love affair with London's expensive real estate
Quartz
Yet the country's kleptocrats are increasingly exploiting weaknesses in the international financial system to launder and conceal their ill-gotten gains, often via high-end real estate in London, New York, and Dubai.This month's release of the Paradise ...



Philly.com

2018: The year of heading to the 'burbs? And other real estate predictions
Philly.com
A new home for sale along South Warren Avenue and 2nd Street in Malvern in May. As building costs in cities continues to be an issue, economists predict that suburban sprawl will emerge again in 2018. by Caitlin McCabe, STAFF WRITER @mccabe_caitlin ...



Real-estate transactions: Nov. 24, 2017
Peoria Journal Star
207 Burning Tree Drive, Pekin, Wells Fargo Bank National Association to Real Estate Growth Fund LLC, $92,500. 216 Frontenac Road, Marquette Heights, Asher E. and Chelsea A. Aberle to Lowell M. and Ryley L. Wiltermood, $96,500. 500 W. Jefferson St., ...


Google News

home | site map
© 2006 TIGER MEDIA