How to protect my unencumbered properties?

by Readers Question

11:49 AM, 3rd March 2015
About 4 years ago

How to protect my unencumbered properties?

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How to protect my unencumbered properties?

I have over 30 properties in total of which I own 8 outright, and rest are on Buy to Let mortgages.

I am looking for some advice on how to protect the 8 I own outright in the unlikely prospect of an increase in mortgage rates like we had back in the 70s ( I think) so the mortgage company would not be able to touch them ?

Regards

Tonyprotection



Comments

Neil Patterson

11:51 AM, 3rd March 2015
About 4 years ago

Hi Tony,

I am guessing the only way to be 100% sure is to have the unencumbered properties in the name of someone else or in trust, but I will see if one of our IFA friends can comment for us.

tony tony

12:04 PM, 3rd March 2015
About 4 years ago

Reply to the comment left by "Neil Patterson" at "03/03/2015 - 11:51":

Ok Neil thanks

Tim Fenn

14:00 PM, 3rd March 2015
About 4 years ago

My Initial thought is to borrow against them and then move the cash, would also give options if everything went south.

Ian Ringrose

14:31 PM, 3rd March 2015
About 4 years ago

One minute I read a post from a landlord complaining that it is hard to make a tenant pay up even when you have a court judgment. The next minute I am reading a post from a landlord that wishes to “protect” unencumbered properties so that a mortgage lender will not be able to make him pay up!

And the experts are happy to help him do so without even questioning if it is acceptable think to do…..

Claudio Valentini

14:57 PM, 3rd March 2015
About 4 years ago

I’m sorry Tony if I misunderstand your situation. If the properties are unencumbered, you own the properties outright. I assume there is no charge secured against the 8 properties you own in which case what is your worry? So I think Neil is on the right track. Put them in trust or gift your properties to someone you can trust, spouse or other. But if you’re worried about being made bankrupt on the 22 mortgaged properties you own in the event of an interest rate rise, perhaps you need to do some serious stress testing and then liquidate some properties to give you an adequate cash buffer – 20% of your debt should be enough to see you through.

tony tony

15:13 PM, 3rd March 2015
About 4 years ago

Reply to the comment left by "Ian Ringrose" at "03/03/2015 - 14:31":

ian ringrose isnt that what all investers do try to protect there assets if things go wrong or am i on my own?

tony tony

15:18 PM, 3rd March 2015
About 4 years ago

Reply to the comment left by "Claudio Valentini" at "03/03/2015 - 14:57":

claudio vincent there is no charge against the 8 properties, and i have an adiquate cash buffer as long as the interest paid dont go above 10%. im thinking worst case senario like back in the 70s when it 16/17%

Claudio Valentini

15:33 PM, 3rd March 2015
About 4 years ago

You're in good shape then...perhaps you could be be a bit more Buddhist in your outlook 😉
"Every time we use the present to stress about the future, we’re choosing to sacrifice joy today to mourn joy we might not have tomorrow..."

Steve From Leicester

16:25 PM, 3rd March 2015
About 4 years ago

Reply to the comment left by "tony salmon" at "03/03/2015 - 15:13":

I share Ian Ringrose's view - there'd be little sympathy for a tenant asking how he could avoid paying debts, so shouldn't we at least raise an eyebrow when a landlord does the same?

However, ignoring the moral side of it, short of giving them away there's not much you can do to protect your properties in the circumstances you're worrying about, because if they couldn't recover the money any other way a lender would seek a bankruptcy order and go after all of your assets.

As Claudio says, you could give the properties to your wife, they'd be safe from the scenario you're worried about if you did that. But note that you'd lose them if your wife went bankrupt. You'd also lose them if she ran off with the postman.

tony tony

17:12 PM, 3rd March 2015
About 4 years ago

Reply to the comment left by "Steve From Leicester" at "03/03/2015 - 16:25":

steve foster do you think its fair when the morgage company rips the client off like the senario with the west bromich morgage company?

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