Buy to let capital advise

NO_NAME_4-2

Hi All

Just after Some advice, I am purchasing a BTL via a LTD co. I need to pay £100k in total and have a cash shortfall off £20k

I have a few options as I have a watch I can sell for circa £12k and stocks at £25k 

Options 

1, sell stock 10k and get a 10k loan (interest can be claimed back) 
2, sell watch 12k and get a 8k loan (interest can be claimed back) 
3, sell watch 12k and sell 8k stock 
4, sell stock £20k 

Any advise would be appreciated, I am thinking 2 makes the most sense 

Note 
watch cannot be purchased again from retailer and has £3k profit in it 

stock is mainly s+p 500 - £5k profit 

property will make circa £700 a month gross profit once purchased 

Keep_pedalling

Won’t it be your Ltd company that would need a loan rather than you needing a personal loan? 

grumpy_codger

NO_NAME_4-2 said:

....(interest can be claimed back) ...

Do you mean offset against the rental income? It's not the same.

Gary1984

Depends on your risk tolerance. The loan will create some slight leverage which should improve the return on your investment if all goes well but would also increase any losses (as you'll still need to pay interest even if the property is unlet).

Have you spoken to a broker for the loan?

NO_NAME_4-2

I can get a business loan at around 7-8% but I can claim the interest as an expense anyway …

NO_NAME_4-2

Can anyone else advise on best option? 

saajan_12

NO_NAME_4-2 said:

I can get a business loan at around 7-8% but I can claim the interest as an expense anyway …

That's pretty high.. do you think you'll outpace that with stocks? Claiming as an expense just means you save the tax on that amount, you still lose the rest of the interest. Effectively it still costs you 5.67-6.48% net of corporation tax. I wouldn't discount that. 

For a property that's making ~8.4% gross profit (based on 700 / month on a 100k investment) that's a high financing cost. 

Keep_pedalling

NO_NAME_4-2 said:

Can anyone else advise on best option? 

Might be better asking over on the housing board.

El_Torro

How attached are you to the watch? If you're happy to sell it I would do that and get the shortfall by selling stocks. Otherwise I would take all the money from selling stocks. I would avoid getting a 7% (or higher) bank loan if possible. 

Stocks are doing quite well at the moment so now is not a bad time to sell. I say this as a general comment, since you haven't mentioned what stocks you have. You can always buy more stocks in future, preferably in a Stocks & Shares ISA. 

NO_NAME_4-2

Thanks for coming back to me, stocks is sp500 fund. 

I am attached to the watch as it took me 2 years to be able to buy it from the retailer…. I won’t ever be able to buy it again new. 

Other option might be do a money transfer from a credit card and use that ….