Shelter’s Income and expenditure figures highlighted13:57 PM, 4th February 2019
About 3 weeks ago 35
I am keen to hear more experienced Landlords view on their exit strategy’s. The reason I am thinking about this now is that it is time to refinance a couple of HMO property’s that I purchased with cash (property’s were not mortgageable).
I am now 41 so have plenty of years left to obtain mortgages though I understand that it would be almost impossible to obtain finance when in my 70’s. I also want to purchase another 4 over the next couple of years
Therefore I see I have 2 options
a) Refinance all 6 HMO’s with repayment mortgage which may be initially less tax efficient but will mean I will have a good steady income in retirement and a fully paid off estate to pass down to off spring.
b) Refinance with interest only which will initially be more tax efficient but will mean that the banks will be calling in their money when I’m 70 meaning I will have to sell in order to service the debt. So I will have less property and a capital gains tax bill.
I do not expect the property’s to have large capital appreciation over their lifetime as they are terraced property’s in the North.
I am not sure if I am missing something as all advice seems to point to high gearing but the way I see it this will lead me to having to sell property in order to pay back the banks.
Any guidance would be much appreciated
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