Buy direct or use a property investment company?

Buy direct or use a property investment company?

10:41 AM, 13th January 2023, About A year ago 9

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First of all, a little background about my particular circumstances, which led to this question.

My step-mother passed away last September and left me her house. It’s fully paid for and is worth around £420K.

I now have a number of choices regarding how to use the house or to sell it and use its value, and maximise my returns.

Buy-to-let seems a good idea. Locally, I can get probably 2-3 £130K terraced houses for student lets from the value of the house. Rent spread across several properties spreads the risk and doing it all myself keeps costs down.

But, older houses need lots of maintenance and their value, if still low now, isn’t likely to increase very fast in future. I’m 58 and so this is a medium term investment, not really long term.

I’ve been looking at Alesco Property. They build accommodation blocks from which customers can buy flats. They are fully managed and can be purchased in parts of the country (like Liverpool and Manchester – some way from where I live) where house prices are expected to grow well – Northern Power House and all that.

There are properties around £130K – £180K so I can buy at least two and possibly 3, so I’d get the same number of properties. Rent and capital growth will be higher but so will agency fees and possibly service fees for the tower block.

They also have ‘Buy from Plan’ offers – it can take some time before the property is actually owned (still being built) but the properties are up to 20% cheaper when purchased early like this.

It’s important to note that I’d be buying individual flats – this isn’t a Real Estate Investment Fund with no direct ownership and the risk of losing all if they go bust. I’m not looking for that type of investment!

So, has anyone here had any experience of this particular company (or similar companies)?

What has your experience been?

Any opinions on the choice of buying direct of using a business like this?



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david porter

12:04 PM, 13th January 2023, About A year ago

why not simply rent out the inherited house?
No stamp duty?
no estate agent fees? can you get 1500 pcm?


13:51 PM, 13th January 2023, About A year ago

What a lovely nest egg to have at this stage of life.
You could keep it and let it but remortgage it to raise capital for deposits on more BTL’s. Set up a company to buy them under (pay less tax) and then the mortgage terms won’t be an issue. The company can then be left as a legacy for younger family members whilst for now earning income for you long term.


14:42 PM, 13th January 2023, About A year ago

Even if you buy as a ltd co the maximum terms are supported by personal guarantee but most can be up to age 80 or 85 whether or not it is a ltd co. The younger family members will still need to remortgage under whatever rules are in place at the time. Having a company does not remove the personal factors unfortunately (I asked those same questions).


21:54 PM, 13th January 2023, About A year ago

Reply to the comment left by david porter at 13/01/2023 - 12:04
Rent has been estimated at around £1200pcm.
Renting this property is one option I've considered but I could get 3 student houses in Coventry - each returning as much (3 students at £450-500pcm each).
Or, 2-3 new build flats somewhere that house prices are likely to grow well - 'Northern Powerhouse' cities like Liverpool. Lower rental from each (more management fees) but better capital growth than in Coventry (home town)


22:11 PM, 13th January 2023, About A year ago

Reply to the comment left by Susan at 13/01/2023 - 13:51
Remortgaging isn't something I'd thought of - but I'll look into that.
I'd already thought of using an Ltd company (or LLP), so that's good advice. Seems I need to do some research around mortgages and Ltd companies though, judging by this smart and the one below!


22:14 PM, 13th January 2023, About A year ago

Reply to the comment left by Puzzler at 13/01/2023 - 14:42
Thanks - I think Ltd companies are a good idea - but seems I need to do some research regarding mortgages, judging by this answer and the one above!


11:10 AM, 14th January 2023, About A year ago

Get the one you inherited rented out and get 'used to it'. Then when you are happy with the situation, raise funds against that one, buy the next ( if possible cash ). Get that one up and runnng and then put a mortgage on it and take a little more from the prime property and get the next, for cash... Get that running. Slow and steady. You learn as you go on and you will make mistakes ( we all do ) but you will get better by your third rather than screw them all up if you do them all at once.

Yvonne Francis

11:47 AM, 14th January 2023, About A year ago

Reply to the comment left by ARC at 13/01/2023 - 21:54
Just a word of warning if you consider student houses. To start with they need licensing and in some areas planning. The worst thing is the threat of the Renters Reform Bill which one MP said on the radio this morning 'was ready to go'. The Bill will scrap any fixed term and insist on periodic tenancies. There are lots of articles online you can read as to why this is such a disaster but believe me, IT IS.

I've let to students for over forty years, and yes the returns have been good, and the tenants polite, reasonable and even interesting, but I'm looking for a 'get out of jail' ticket, and I'm even thinking of selling unless of course the bill is modified, which is doubtful as I know we are being victimised in order to get student accommodation into universities and PBSA's, and us in the PRS 'off the streets'.

Tim Rogers

14:13 PM, 14th January 2023, About A year ago

Everything said so far is excellent.

If you don't wish to get involved with the overhead of running BTL, companies, etc, there is the option of investing in companies who in turn invest in property. You can choose the type of property. They tend to give a return at about 6%, but of course that can fluctuate.

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