top of page
  • Writer's pictureThe Cedar Crest Team

Managing Your Property Portfolio

Looking to ace your property portfolio management? Get the best Property Investing Tips from our team, covering goals, tax advice, banking hacks, and more!

 
property tips

When people think of property investing, they might automatically think of the big picture aspects like attending property viewings or negotiating with estate agents. But there are a lot of things that can be done in the background to help make your property journey as smooth as possible. In this episode of the Expat Investor, that’s exactly what Dan Riedo, podcast host and Sam Harley, Cedar Crest mortgage adviser, are sharing.



 

The Importance Of Having Long-Term Goals In Property Investing


The first thing we want to talk about is goals, which I know we've mentioned in previous episodes but it's really important that every time you look for that next purchase, you're not just focusing on the short term goal of buying that next property. We always think it is important to zoom out and reset on the long-term goals and what you're actually trying to achieve long-term as property is a long-term game. We really advocate for having crystal clear defined goals before jumping into property investment.


Once you have those long-term goals established or that long-term income goal, it's really important to be mapping out those short-term objectives or think about how you're going to get there. Whether your strategy is to secure passive income or you want to go for a capital appreciation approach or maybe later down the line if you're looking at diversifying your portfolio in different ways, identifying those key short-term milestones along the way is really important to help you stay on track for your long-term goals. 


Whether you are on your first property, your 10th or 100th it is important to look at what your goals are and what your objectives are. It also helps remind you of why you’re during this in the first place and helping yourself to play the long game here. 


Just looking at the last 12 months for example, it would have been really easy to get spooked and jump out of the market or panic about what's going on in the short term but by reflecting our goals, and staying true to your vision it will help shorten the peaks and troughs.


 

Seeking Property Tax Advice


The next step that is truly worth taking into account is making sure you're getting tax advice and setting yourself up in the right structure. The biggest question you will be asked here is whether you want to set up through a limited company or in your own personal name. It is important to speak to a specialist to make it clear and will really help crystallise this in your mind, to go through all the hard work and discipline it takes to build a portfolio just to get into property number four, number five, number six and realise maybe you should have done this through a limited company because of my long term goals or well I went through all the pain of setting this up in a limited company and it's not made any difference at all.


Doing this work from the start and speaking to a property tax specialist makes such a difference, for me personally it really helps to know where I was going and how I was going to get there. I think there's some tax advisors or accountants that are better than others so some might focus on just getting a tax return done for that year but I think if your long-term goal is to build property and if your property ambitions are long term then you really need a tax advisor that's going to be forward-looking and helping you understand how you can minimise taxes over your lifetime rather than just how do I get my tax return before a deadline this year. 


How would you go about finding a tax specialist?


I looked into quite a few property forums and at that time, I had an accountant but I knew that he just wasn't the right one for me so I really took my time and I researched through various online sites. I spoke to a few different tax advisors and I'm at the point now where it is absolutely essential for my plans and I'm really glad I took the time to find the right one for me.


It is definitely better to find a property tax specialist or a property accountant rather than a general accountant. A general accountant will probably say they can do the job for you and you'll probably be fine but having that property specialist is really important.


 

UK Banking and Setting Up Personal or Company Name Accounts


The next tip we've got is all about banking, I personally feel that this is such an obvious yet overlooked hack just setting up a bank account purely for the ins and outs of your investment so all rent gets paid into this particular account and all expenses, mortgages and insurance things come out of it. The investors that I have spoken to over the years who just do it out of their own everyday account or when it comes to tracking what you're doing it's an absolute mes. If you set up through a limited company you would have to do this anyway. This is something most people don't think about but it makes your life easier, it makes your accountant's life easier, and it gives you a better understanding of how your investments are performing. 


If you don't live in the UK, there are also different things you should consider than if you lived in the UK at the start of your property journey. It is probably quite simple to set up UK bank accounts or corporate bank accounts if you use a limited company but if you're just starting out and live outside the UK, it can be a bit more challenging. For example, if you live in the Middle East, it can be quite difficult to set up a UK bank account remotely as well as setting up a corporate account can be difficult as well.


One of my biggest tips would be that as soon as you know that you are going to buy a property think about setting them up if that's in personal name. If you live in a country where HSBC is quite present you can go into the local branch and request them to open a UK bank account as soon as possible. If you decide to go with the limited company structure it is more difficult to set up banking. There are some company set up services that usually add bank account opening. You might find these more in Expat hubs.


property management


 

Budgeting and Spreadsheets


Following banking, the next tip will be around budgeting and spreadsheets. Again, from personal experience and this is reflected with other investors I've spoken to, in the beginning, I just let it all pour into one account and I just assume whatever's leftover is what's left over. It wasn't until I started digging through this account that I started to notice the difference. What I ended up doing is budgeting all the expenses for my property so I would take the gross amount of each property and take all my mortgage costs, yearly insurance, and service charges if there were any. I'd put a little bit away for maintenance and put a little bit away for tax and I got to a point where I was separating those into different bank accounts all under the one banking profile but I would log into HSBC or Natwest and I would immediately see my financial situation.


I would keep my everyday account as a flow to count on, we always have the same monthly amount in it to take care of my monthly expenses like I said with mortgages and service charges but then I would see my maintenance account slowly growing over time and if anything major happened to one of my properties that's where I would draw the funds from and we'll see another little account slowly growing over time and that would take care of my tax liability at the end of the year. Then I would have a savings account and that's where I really notice the difference so we've seen this money grow when a month to month basis and each and every month that I did put money into this savings account i was one step closer to my next deposit.


 

Accounting


The next logical step after budgeting is probably accounting and this is when we start to see all the parts fit together so once you've got your separate banking accounts for your properties sorted in your budgeting spreadsheet, it makes the accounting part preparation for your tax return much easier. Most people tend to hire an accountant. We still recommend having eyes on your accounting and being proactive with keeping things organised. That will make life easier coming to any point of every year when it's tax return season and especially if you end up owning many properties.


It's easy enough to have a spreadsheet on Google docs and list all your expenses and all your income, breaking it down by category to make sure it’s making your life easier but also your accountant's life a lot easier.


It prevents the entire process of feeling overwhelming, again it also gives you a really good snapshot of where you and your portfolio are and if you do get to a point where you feel like a spreadsheet is too overwhelming and that can happen at one property or a hundred properties, you can move on to an accounting software that's cloud-based and that can be something like QuickBooks or Zero. Tt can cost anywhere between maybe £10 or £20 GBP a month and you can quite often find your accountant has a subscription with something like Zero. 


One thing to add from a mortgage perspective is that you can deduct some interest off of your tax benefit if you buy in personal name and you can deduct all of the interest if you buy in a limited company. But some banks are better than others at actually giving you that information on the amount of interest  paid over the whole year so I recommend either using a broker to help or requesting from the bank to keep you updated with monthly statements so that you can just have that ready to provide to your accountant on tax year end.


 

Documentation and Filing


Finally, which is not the most sexy part of property investment, is documentation and filing systems. Each property you buy will basically be a magnet for paperwork, each property could kind of be considered its own little business so it will attract its own set of legal documentation, its own set of mortgage documentation, accounting and it's really important that you have that organised in one central place per property such as using cloud-based file system like Google Docs or however you would save your documents online.


I think it's really important, especially as each property purchase could be done over a number of months and so many different parties involved are sending you emails, you might be receiving physical documents in the mail as well and it can easily get out of hand. If you become a portfolio landlord, regularly using a mortgage to keep buying more property, the banks won't ask for information on all of your existing properties. If you don't have all of that information such as tenancy agreements, mortgage statements it can make getting another property a total nightmare.


 

>> WANT TO LEARN MORE ABOUT FINANCING OPTIONS YOUR PORTFOLIO? <<


Get in touch with one of our mortgage advisers today to learn more about your mortgage options.



Cedar Crest Ltd – telephone UK T: +44 (0) 203 883 1017,

HK T: +852 6645 4462 – email info@cedar-crest.co.uk 


Your home may be repossessed if you do not keep up with repayments.


1 view0 comments

Commentaires


bottom of page