WHAT IS PROFESSIONAL LANDLORD FINANCE | EXAMPLES OF RESTRUCTURING
London-FS specialise in helping Professional Landlords structure and grow their property portfolios. We classify a Professional Landlord as an individual with more than 4 properties in their portfolio.
Landlords with multiple properties may have complex holding structures such as some units in personal names and others in Special Purpose Vehicle (SPV), Limited companies, partnerships or even offshore companies. The portfolio can be solely residential, commercial or a mix. In our experience professional Landlords need to ensure they are structured correctly to ensure further funding, growth and restructuring is achievable.
From April 2017 the tax relief available to landlords holding properties in their personal names has been restricted on a tapering scale, consequently no longer allowing landlords to deduct costs like mortgage interest from their rental income.
This is not the same for Ltd Company or SPV purchases, whereby you can still deduct these types of expenses from the rental income generated. Hence the reason many landlords are acquiring properties in this way.
Portfolio finance is not simply based on the rates that we will secure for you. We work with your accountant/personal representatives, to see the implication on your personal taxes, company taxes and growth plans for the portfolio.
To discuss your requirements in the strictest confidence please get in touch using the below form.
We use this term for established Professional Landlords with more than 4 properties in their portfolio.
Example 1: When we talk about restructuring your portfolio it could be as simple as you wanting to release some equity to purchase more properties to grow your current portfolio. This would entail working out which units are coming to end of any fixed periods they may be in (to avoid paying unnecessary lender penalties) and releasing equity (if this is possible) whilst maintaining your interest rates and monthly payments.
Example 2: It could be your current loan facilities are with multiple lenders and we are able to bring the whole facility to one lender, offering you favourable rates and terms. This will depend on the portfolio type (residential, commercial or mix) and gearing (your exposure in terms of outstanding lending to property values).
Example 3: You currently have 4 properties in your personal name and an SPV for the remaining portfolio. You would like to bring the properties in personal name over to the existing SPV or a new one. This type of restructuring can involve associated costs such as stamp duty, capital gains tax. lender costs (valuations and lender fees) and would need direction and accountability from your accountants and solicitors. We we would work along side them to make this possible, if it the route you choose.
Example 4: You have a large portfolio of properties and are thinking of expanding. Your current lending facilities is up for renewal and you would now like a credit line to grow your portfolio. This scenario will be dependant on how much equity you have available in your portfolio. If there is enough it is likely we will be able to secure you a credit line against this equity up to a maximum 80% Loan to Value. This will allow you to draw down on the fund as and when you have found a property and only pay interest on the money when it drawn down. There maybe a small non-utilisation fee charged by the lender if the funds are not used but these are negotiable.
Example 5: You would like to restructure your lending facilities to clear the lending on some of your portfolio and gear up on the remaining. This scenario works well for clients who wish to have some of their portfolio unencumbered and mortgage free. Again as with many of these scenarios as long as the properties you would like to be used for lending have enough equity, this can be achieved and with good rates and terms.
These are some common restricting scenarios we have been involved in. To discuss your requirements in the strictest confidence please get in touch using the below form.
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