Buy Renovate Refinance Rent Strategy

Build your own portfolio

It may seem a daunting task, building up portfolio of property and becoming financially independent, most people assume that you need to find a 25% deposit, plus expenses again and again, but what if you could create your deposit for your next project as you go along? What if you could not only purchase a property for rental purposes, but also add value to it, recover your costs, keep the property and still have funds for your next project?

The Buy, Renovate, Refinance, Rent Strategy may be self-explanatory, but to succeed, you need to follow a series of steps meticulously, otherwise your plan will come to a dead stop. Your location could also be a factor that you must consider, not only with regards to demand for rentals, but also with respect to property prices. If you happen to live in London, where prices are prohibitive, that does not mean that you should be restricted from entering the property market. There are many places in the UK with high rental demand and prices much lower than London, it may be a little harder dealing with the distance, but once you are up and running and you have made a few connections, it will get easier. If you stick to the plan and grow your portfolio, there is no reason why you should not be able to buy in London at a later date, but initially, the key is to avoid over-stretching yourself.

Another concern that new potential may have, is the recent changes in legislation, that seem to be a campaign against Landlords. This is not all that it seems, the first changes, which is known as the deregulation act, was introduced in 2015, this does give tenants more rights, but it is actually to give them more protection from unscrupulous Landlords. The second change, known as the Section 24, is changes to the tax system for Landlords, which can have a dramatic effect on higher earners. Once again, this is not a problem if you buy property under an SPV or Special Purpose Vehicle, which is basically a ltd company set up specifically to own the property. There are many advantages to this, in addition to savings on tax, they are flexible, they allow each property to be ‘ringfenced’ which means that each property is owned by an SPV in its own right and not a risk to any other property, nor is it at risk from any other property and in addition to this, the properties will then be more attractive to investors, should you ever sell, because they need not be sold as normal, the company itself can be transferred, saving on conveyancing costs and most importantly, stamp duty.

Once again, I will cover this in more detail in future posts. Please feel free to download my guide and do not hesitate to contact me if you have any questions.