After a long hiatus, we are relaunching this blog to complement the work of PS Investor Services – a company focused on sourcing quality property investment buy to let / buy to sell (“flip”) opportunities. We look forward to addressing a range of topics that we hope will be of relevance to the residential investment sector and very much welcome your comments and suggestions (either below or via e-mail at: info@psinvestors.co.uk).
A New Operational Environment for Buy to Let Investors
In addition to the imminent tapering off of tax relief on mortgage interest for personally owned buy to let property, a series of other challenges such as the removal of the wear and tear allowance on Houses of Multiple Occupation (HMOs) and the 3% stamp duty surcharge (for second homes / buy to let acquisitions) have become instilled into the marketplace over the last year. Nonetheless, whilst these factors may pose significant risks for existing landlords (particularly those that are highly geared), we believe that property investors with well-structured business operations may well be able to capitalise on the turbulence.
For these reasons, within what is also likely to be a scenario of tighter buy to let borrowing regimes and underwriting standards adopted by lenders, PS Investors will be encouraging Limited company (SPV) acquisition for the foreseeable future.
Our primary sourcing strategy targets single-let properties with gross yields of 9%+. We believe this kind of rental return is conducive to this increasingly “corporatised” buy to let reality and will enable investors to operate within a relatively healthy margin of safety, factoring in the likelihood higher borrowing costs, fewer lenders, administrative obligations, accountancy fees etc. alongside the other inherent risks of owning rental property.
We are advising clients to seek personalised advice from a qualified accountant and to be aware of the evolving tax implications when drawing profits from the company. Similarly, investors may also have their own tax-efficient strategy when acquiring our buy to sell opportunities (properties we occasionally source that are in need of significant, invariably “back to brick” refurbishment works).
We encourage you to join our e-mail list (via the panel to the right of this blog post) upon which we will forward our Investor Profiling form. This will assist us in gaining a greater understanding of how we can work better moving forward and ensure that you are not inundated with irrelevant messages. Prior to being marketed on our deals page, every opportunity will be e-mailed and, upon expression of interest, we will forward our Non-Disclosure Agreement (NDA) to be e-signed, followed by a detailed due diligence report and key metrics spreadsheet.
For your information, PS Investors Co-Director Ruban Selvanayagam – currently based in South London – is particularly interested in property development, conversion projects and build-to-rent within Greater London. Ruban can be contacted directly at ruban@psdevelopers.co.uk. Please also feel free to follow us on Twitter @psinvestors and join our Facebook group.
