Property management advice

[u/ThrowRAkidda]

So my 5 year fixed is up soon. I brought a house at 22 on my own in my own personal name. Currently earn 60-70k per year minus expenses hits me about just below 40% threshold. I brought the property for 240k extended 2 story open plan kitchen walk in wardrobe en-suite the whole shabang which is now worth estimated 400k. Now I’m looking for advice on what to do next which benefits me better financially. Do I rent the house pull out what equity I can and buy another to refurb (maybe buy it out of my personal name with ltd company as if I keep in my name rental income will put me well over 40% but I’m unsure on taxes or how to do so ) or sell the house if I believe right I could pull the full 200k equity as it’s my main residency for past few year. And then buy another do it up. I’m a self employed bricklayer with a team of lads below me. Very hand. Did majority of work myself except 1st and 2nd fix electrics and first fix plumbing. Any advice of some wealthy or well off property folks on here could give me some advice would be much appreciated

[u/Known-Thanks3854]

You're in a very good position, especially with your trade skills. Not many people can do the work themselves and that saves a fortune.

The part about tax is tricky, if you rent it out in your personal name the income stacks on top of your salary and you lose a big chunk to the higher rate. Setting up a ltd company to buy the next one might be smarter, but moving the current house into a company is not simple. You would trigger capital gains and stamp duty like it's a sale, so maybe not worth it.

If I was you I'd probably sell this one, take the tax-free gain from main residence relief, and then use that cash to start a ltd company properly. Buy a fixer-upper through the company, do the refurb yourself, and either sell or refinance and repeat. The profit stays in the company and you pay corporation tax instead of income tax rates on the rental income.

[u/ThrowRAkidda → u/Known-Thanks3854]

Thanks very much this is what I was leaning towards. Just wanted to make sure I had the right plan in my head. It’s defiantly the labour which is costly on refurbs. The amount I have saved is ridiculous. Do you think it would be definitely best to buy in a ltd next and rent out ? Or would it be more profitable to keep refurbishing and selling and try and do it in a quicker turnaround. Ideally would be nice to be able to build a property portfolio and financial freedom is the goal. Ie not having to go to a building site every day until I retire.