When the world as you know it changes, how can you confidently make a choice about what the best course of action should be?
Commercial and private landlords have had a turbulent time in the past couple of years, and the coronavirus has further added to what can seem like endless decision-making. Currently, in our accountancy practice, we are encouraging our clients to ask themselves questions like these to help think about maximising yields:
- Are there opportunities for better rates on my borrowing?
- Do I have someone knowledgeable to fight my corner on an insurance claim?
- Have I got clarity on the next 13 weeks cashflow?
- What’s my exit plan looking like?
- Could I make a better plan to access the equity with minimal tax implications?
- How do I turn a passive income into a utilised asset?
- Can I rework the internal space to maximise income?
- Have I been left exposed by my insurance policy?
- Could I be at financially risk from out of date compliance knowledge?
- What cost savings could I make to maximise income?
Increase the chances of making the best decision by being as informed as possible. Together with our network of specialist advisers for property investors, we can help you to understand how to get your investments to work as hard as possible for you – whether you’re planning an exit or looking for opportunities to grow.
Navigating the threats and opportunities facing property investors right now
Miguel Calabrese, Blue Rocket Accounting
A lot of tax planning opportunities around properties can become complex quickly and could end up costing you a lot of money to carry out. Our approach is always to start with the simple stuff first, you would be amazed how much you could save with just two pieces of paper! Hint: Form 19 and Trust form
How I’ve helped: By bringing together a variety of experts with proven track records, landlords have been able to maximise their yield, capitalise on their portfolio, access funding, minimise their tax liabilities and plan for a profitable future.
Dan Swaisland, Ocean Financial Services
If you’ve got the right properties, and the means to do so, there could be a benefit in sitting tight. I don’t expect we are going to see the full ramifications and resolutions of the COVID crisis for 18 months to 2 years so it may make sense to hold firm. There doesn’t seem to be a lot of buying and selling going on, potentially due to significant job instability and a lot of uncertainty. Funding is available for people looking to invest, but there is potential for the market to dip more, which could mean a better time in future. Overseas markets are a consideration for those looking for expansion, there are some emerging markets in Europe that could present good opportunities.
How I’ve helped: Businesses and private individuals across the globe have saved money on their overseas payments and receipts whilst accessing economic, flexible finance.
Simon Hammond, Morpheus Insurance
A lot of people buy insurance with the expectation that they’ll never need to claim. Landlords need to be very aware of what is and isn’t covered to ensure they have cover for things like unoccupied buildings due to lockdown or malicious damage by tenants, alternative accommodation for tenants, rent guarantee and landlords’ legal expenses. Whilst it’s important to review costs in a recession, landlords have to balance that desire with managing risk and investing in protection.
How I’ve helped: We recently helped a landlord who is buying a small property portfolio with some unoccupancy and a high level of Local Authority tenants. A number of insurers were not interested but we have access to a wide range of specialist property insurance facilities and one of our main insurer partners was able to assist with providing full cover at a very reasonable rate with no exclusions or increased excesses. Problem solved!
Paul Sweeney, AllRound Solutions
Business owners have separated into two camps – those who have stuck their heads in the sand, and those who have taken action to look at their overheads and find where savings can be made. Simple actions, like reducing the amount of commercial waste by using a compactor, can all contribute to reduced outgoings. So much focus goes in to looking forward – how can I acquire more to increase my income – without looking backward to see where monies are already being spent and how this can be reduced. Business rates, capital allowances, merchant services – just because they’re already on your cashflow doesn’t mean they need to stay at their current levels. Review your expenditure and see where incomes can be maximised. Got a sizable commercial property, why not look at renting the roof out to a solar investment company?
How I’ve helped: Helped residential and commercial landlords who charge ‘inclusive bills’ to reduce their utility expenditure, and shown landlords how to increase their incomes.
Tom Kesterton, Eclipse Financial Planning
Unsurprisingly, given current circumstances, we been advising a proportion of landlords on their exit strategy. This doesn’t have to be an immediate action plan but, the crisis has shown some that they need to be structuring their business to be able to effectively, and profitably, liquidate their assets. Property can be a great passive income opportunity, but we also need to be able to turn the portfolio into utilised wealth for landlords. Having these conversations before the need arises, and planning for the years ahead, mean tax efficient investments can be made.
How I’ve helped: We are currently assisting a couple with multiple properties and an inheritance tax liability of over £200,000 and a capital gains tax liability of a further £24,000 and looking to reduce this completely, whilst enabling them to access the wealth they have created in retirement and pass on the remainder to their children.
Alan Ager, MAI Group
Landlords looking to make changes to their property, perhaps reviewing internal space to maximise rental incomes, need to be aware of the health and safety restrictions around construction work so they can ensure any contractors are compliant and works remain safe. Additionally, they should ensure that all certification is cloud-hosted rather than kept in filing cabinets or on office-based desktops. Security systems can be installed in unoccupied buildings to ensure they are secure, but these can also be used to evidence usage for insurance purposes or to monitor tenant attendance on-site.
How I’ve helped: We have saved many of our customers extra money and paperwork where we offer all landlords services with certification with only one point of contact required.
Ivan Spikin, MPW Insurance
The situation is changing so rapidly at the moment that we’re having daily meetings to ensure we’re offering as up to the minute advice as possible. The insurance market is hardening and rates are going to go up. Commercial clients have seen rates tumble in the past 10-15 years, but as insurers’ investment income drops, the premiums will go up. That price pressure might encourage landlords to look for the cheapest option, but if the past months have shown us anything, it’s that sometimes you really need to get your insurance to pay out.
How I’ve helped: Cheap, online solutions where people haven’t read the policy cover thoroughly have caught a lot of property owners out. A policy that you can rely on is something that businesses can’t afford to overlook.
We want your next move to be one that takes you towards your dream. A five-minute call could be the start of that – get in touch and we can advise who would be best to help you sky rocket your business.
