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Joint buying with a regulated tenant
Wakey0698
Posts: 5 Forumite
Hi
A friend of mine is a regulated tenant. His landlord is putting the house up for sale. Could me and him set up a limited company to purchase the house? Also if this is possible could we then change the agreement so he is renting off the company under a different agreement? Effectively renting of himself?
Thanks for any help advice
A friend of mine is a regulated tenant. His landlord is putting the house up for sale. Could me and him set up a limited company to purchase the house? Also if this is possible could we then change the agreement so he is renting off the company under a different agreement? Effectively renting of himself?
Thanks for any help advice
0
Comments
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What are you trying to achieve here?Wakey0698 said:Hi
A friend of mine is a regulated tenant. His landlord is putting the house up for sale. Could me and him set up a limited company to purchase the house? Also if this is possible could we then change the agreement so he is renting off the company under a different agreement? Effectively renting of himself?
Thanks for any help advice
why would he rent off himself/the company when he owns it1 -
Why would you need to set up a limited company to buy a house? Something seems awry.2
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Awry indeed. Me thinks he's wanting to claim benefits to pay the 'rent' or similar?4
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I didn't have the stones to say that but it does sound... Odd.1
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It's all possible, yes. Whether it makes much sense is a different question.3
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No benifits needed my friend.
The house in question is going for a lot less than It's worth. So if we was to buy it cash with a small refurb, then remortgage. His rent into the company would pay the mortgage? Freeing up money to reinvest? Does this work legally?0 -
Why do you need to set up a company - the two of you can just pay the mortgage directly. You'll also get a much better rate.
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Buying as a limited company means (on top of all the admin of forming/running the company) paying the additional rate of SDLT (or equivalent), though you might need to pay that anyway if you already own property. Mortgage is more complicated if it's a limited company borrowing, plus they may well not be happy with one of the principals of the company being the tenant. Plus is he giving up his regulated tenancy, as BTL lenders won't want to deal with one of those.0
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Its all my money that will be going in.
So if I was to buy on my own he wouldn't give up his regulated tenancy so it wouldn't be worth buying. Eg hard to get it mortgaged.
The house is being sold for around 40% lower than it is worth. The money that we should make on the house would then be invested into different properties. The income from these other properties will take a hammering from my personal allowance if we was to do it on our own. So a lc will mean lower tax.
So I put 60k ish in to start and buy the property
Give my mate a small % of the company so he will change the tenancy. This will enable us to get a mortgage freeing up 75kish to invest in other buy to let's.
He keeps his lower rent, the company makes a decent profit to then Invest
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I admit I am not sure I understand but would your "mate" not be giving up the security of his tenancy to make you money or do I have that wrong?2
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