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Messages - LC0112G

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1
Omega General Help / Re: Front wishbone bush replacement
« on: 17 September 2018, 12:19:44 »

Since you'll need a press to get the rear bush out and the new one back in again, you may as well use the same press to get the old front bush out too. Or at least try to.


pressing the rear bushes isn't a problem. But the size and shape of the wishbone requires a press with a very large frame - they don't fit in my 10 ton floor standing press. And like any press job you'll need suitable tools to drive the bush with and into.

I've got one of these :


The suspension arm is thin enough to go through the slot in the pressing girder bit, although yes you need suitably sized mandrels to press with/against. I have got one wishbone on the shelf where the front bush refuses to budge even with 20T on it though. I haven't admitted defeat yet though :-)

I think I agree with the other suggestions though. Buy a pair of cheep 'bones of eBay and fit them.  Once the old bones are off, assuming they are genuine GM get them stripped down, re-painted/powder coated and re-bushed using poly fronts and genuine GM rears. Then if/when the cheapo ones fail (might last a year or ten depending how you drive) swap your refurbed pairs back in again.

2
[edit but I can't edit] Not implying that you personally are rich or bent, LCOG - reading that back it comes across rather harsh. I mean, you might be rich, for all I know, but I don't assume the latter ;)

I was thinking about my last visit to a financial advisor, though, whose advice was (slight paraphrasing): "You're a PAYE employee, so you're screwed. Pay up, serf."

My point was that BTL has a 6% buy in tax, and a 28% sell up tax on any gain. If the house/flat is bought for (say) 150K, then you'll have to pay 9K SDLT  now. In 10 years time you sell up for (say) 250K (which is 5.25% HPI) then the CGT bill could be 28K. So from your initial 159K you've made 63K profit, and paid 37K in tax. That's an effective return of 3.5% APR, and does not include any allowance for inflation either. If CPI is 2%, then the effective rate of return is 1.5% + 2%CPI.

Then there is the income from the BTL, which is taxed at your marginal rate. If you've got a normal job, or pension income, then the BTL income could be taxed at 40%. POD has already said he's at best breaking even on the rent, and possibly losing money. Most would aim for between 5% and 10% yield, so on a 150K house the income 'profit' should be at least 7K.

So he's invested in an asset where his only gain comes from HPI, yet the asset has been taxed on the way in, and any HPI is taxed on the way out. You can't sell parts of the asset over several years to spread the CGT liability over multiple years and hence use up your 11.7K CGT allowance efficiently.

Alternatively, buy 159K's worth of balanced assets, and Bed & ISA 20K p/a for 10 years. No tax on the way in, no tax on the way out, and if you're careful no tax on the income whilst you bed and ISA. If the investments return the long term average of 5% + 2%CPI then 159K grows to 312K in 10 years - a tax free profit of 153K. And no aggro from tenants, management agencies, councils, etc.   

Your problem is too much income, which I agree is a difficult one to mitigate. POD appears to be either buying using savings (already taxed money), or perhaps a BTL Mortgage.

3
Omega General Help / Re: Front wishbone bush replacement
« on: 17 September 2018, 00:13:29 »
Best method - source a pair of used GM wishbones, fit new Gm rear bushes (this requires a press to remove old / fit new), then remove the old front bushes using a drill and a hacksaw*, fit polybushes to replace front bushes. Then fit the wishbones to the car and have four wheel alignment done, to WIM spec.
Anything less than this is a compromise imo, unless you pay around 600 for a pair of new GM, if you can find them.

* Details of this method can be found somewhere on OOF. not sure exactly where though.

Since you'll need a press to get the rear bush out and the new one back in again, you may as well use the same press to get the old front bush out too. Or at least try to.

4
Looking at the house next door but one as a second BTL tomorrow.  Again an Ex-Council 3 bed.

So 6% SDLT.

The idea is that if and when we pay off both loans then at current rents that's worth 1400 a month. 

Less tax at 20/40% = 1120/840 p/m

Which as pensioners, will be a bonus.

And when you come to sell, CGT at (currently) 28% on most of the increase in value.

I admire your commitment to paying tax.

5
Quote
Huhh?? How are you going to pay off the mortgage in 7 years? That needs 1251 p/m @ 1.4% APR to clear 100K. In which case you could have invested (1251-120 = 1131 p/m) over a 7 year period and if the return were 5%+2%CPI you would end up with 122K, so be 22K up.
Focused intent... It has to be a very deliberate lifestyle choice or it simply isn't achievable. No car payments, no credit cards, no extravagance.

So use the same focussed intent and invest the money at 5%+2%CPI, rather than pay off the cheap loan at 1.4% and you'll be 22K better off in 7 years.

Or if you really must pay off the mortgage, investing the same 1131 p/m @ 5%+2%CPI for about 6 years will build the required 100K to pay off the mortgage - so about a year earlier than your 7 years.

6
Agreed it is numerically the same thing, but you still have the debt and you haven't factored for risk.

The risk is that your investments don't cover the debt after 25 years. For that to be true you would have to achieve negative growth (real losses) on your investments over a 25 year period. To achieve that you'd have to be spectacularly incompetent, or the world would be ending and you should've invested in baked beans and shotgun shells.

Yes you still have the debt. But if you borrow (say) 100K today on a salary of 25K, and wage inflation averages 3% p/a, then in 25 years time you've still got to repay 100K, but your salary will be 52K. Or put another way, your debt is now only about 50K in real terms.
 
An interest only mortgage over 25 years on 100K @ 1.4% costs 136K over the term, or 120 p/m + 100K at the end. A repayment mortgage on 100K costs 118K, or 393 p/m. source : https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator

If you invest the difference (393-120 = 273 p/m) over a 25 year period, then 5% pa growth returns 162K so you're 62K up. 5% + 2%CPI returns 221K so you're 121K up. Or you could just give 273 p/m extra back to the bank.
However, if you focus on paying the mortgage off before investing, it would be done in say 7 years. If you then invested your 393 for the remaining 18 years (of the 25 year period) you would have 18 years growth in 100% equity in the property AND 154k# in growth on the 393 pm invested.

# based on 393pm for 18 years at 5% and inflation increase of 2%.

Huhh?? How are you going to pay off the mortgage in 7 years? That needs 1251 p/m @ 1.4% APR to clear 100K. In which case you could have invested (1251-120 = 1131 p/m) over a 7 year period and if the return were 5%+2%CPI you would end up with 122K, so be 22K up.

There is no combination where borrowing money at X% and putting it into investments returning Y% doesn't leave you better off, providing Y > X. You are using other peoples money to make you more money.

7
Agreed it is numerically the same thing, but you still have the debt and you haven't factored for risk.

The risk is that your investments don't cover the debt after 25 years. For that to be true you would have to achieve negative growth (real losses) on your investments over a 25 year period. To achieve that you'd have to be spectacularly incompetent, or the world would be ending and you should've invested in baked beans and shotgun shells.

Yes you still have the debt. But if you borrow (say) 100K today on a salary of 25K, and wage inflation averages 3% p/a, then in 25 years time you've still got to repay 100K, but your salary will be 52K. Or put another way, your debt is now only about 50K in real terms.
 
An interest only mortgage over 25 years on 100K @ 1.4% costs 136K over the term, or 120 p/m + 100K at the end. A repayment mortgage on 100K costs 118K, or 393 p/m. source : https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator

If you invest the difference (393-120 = 273 p/m) over a 25 year period, then 5% pa growth returns 162K so you're 62K up. 5% + 2%CPI returns 221K so you're 121K up. Or you could just give 273 p/m extra back to the bank.

8
Agree, paying off the mortgage is madness. If someone (the bank) is prepared to lend you money at 1.4% APR, then you take all you can get and invest it in something that averages 5% + CPI per year.
If your house was paid off completely, would you borrow against it to invest it?

Yes. It's the same thing. I wouldn't have paid off the mortgage in the first place though. No point. Pay the interest each month so the debt remains the same, invest the 'repayment' part of the mortgage yourself and after 25 years your investments will have grown by (say) 5% +CPI, but your debt will still be the same.   

9
Also @ TB you bought considerably earlier than I did, I only bought when I was 27.  :)
But you still lost in the Smugness battle ;D


Bought my first at 21, when interest rates were well into double figures. Its all swings and roundabouts.


In reality, mine was paid off years ago, I only keep it running because it pisses Barclays off - I have a 125k guaranteed loan at about 1.4% in I want it, that under new rules, they have to show on their books :D
I appreciate the sentiment, my opinion of Lloyd's is broadly similar, but to keep a mortgage hanging around is madness.

Get it paid off and get your mortgage payment invested in something like, I don't know, retirement ::)

If the money were in a decent pension, though, its growth would outstrip the 1.4% by a country mile and get there tax free, so in reality the opposite is best.
For clarity, I said to pay off the mortgage and take the amount (that is no longer needed for the now paid off mortgage) and invest it.

Anyone considering borrowing against equity to invest is asking to lose everything next time the housing market tanks.

Why? If the housing market tanks, but all the money borrowed against the house is invested in other assets, then those assets (providing they are well diversified) won't tank - or at least they won't tank by anything like the same amount.

Providing you keep paying the mortgage interest off each month, then your home is safe for the mortgage term - typically 25 years. Over any 25 year period you care to mention, a diversified investment portfolio has always averaged at least CPI+5%. You are asking for trouble if you borrow against a house to buy another (BTL) house though - that's single sector investing and is considered suicidealy risky investing by most. 

If mortgage interest rates look like they are going to exceed investment returns, then you cash in the investments and pay off the mortgage. That is one reason not to use pensions as the (only) investment mechanism - you can't get at the money till you're 55. However, you can put 20K p/a in SSISA's and those investments would be realisable within a few days if so required.

10
Also @ TB you bought considerably earlier than I did, I only bought when I was 27.  :)
But you still lost in the Smugness battle ;D


Bought my first at 21, when interest rates were well into double figures. Its all swings and roundabouts.


In reality, mine was paid off years ago, I only keep it running because it pisses Barclays off - I have a 125k guaranteed loan at about 1.4% in I want it, that under new rules, they have to show on their books :D
I appreciate the sentiment, my opinion of Lloyd's is broadly similar, but to keep a mortgage hanging around is madness.

Get it paid off and get your mortgage payment invested in something like, I don't know, retirement ::)

If the money were in a decent pension, though, its growth would outstrip the 1.4% by a country mile and get there tax free, so in reality the opposite is best.

Agree, paying off the mortgage is madness. If someone (the bank) is prepared to lend you money at 1.4% APR, then you take all you can get and invest it in something that averages 5% + CPI per year.

11
You also have to consider that private landlords have been targeted via the taxman whenever the government has wanted to raise some cash recently. That's only going to come out of the pockets of their tenants.

Not sure that's really true - or at least not yet. Proper "professional" landlords will be "Ltd" companies, and most of the tax changes don't really affect them.

The people that will get hammered are the so called accidental landlords who only own one or two properties, and don't keep a close eye on the effects of the Budget tax changes. That group of people will be on Self Assessment, and tax changes don't hit you in the pocket until 18 months after the start of the tax year - in other words about now (for the 2017-18 year). When the tax bill lands on the mat it's too late to charge the tenant for 18 months of extra tax, and you may also have to wait another 6-12 months to increase the rent depending on the tenants contract state.

And if the tax owing is large (> 2K IIRC) you can end up on "Payment on Account", which means you have to pay this years (predicted) tax owing up front as well. So if you owe (say) 5K for 2017-18 and they predict you'll owe the same for 2018-19, HMRC are going to want 7.5K now, and another 2.5K in Feb. If the tenant has just signed a new AST for 6 months from the start of Sept 2018, then you can't put the rent up till the end of Feb 2019.

12
General Discussion Area / Re: Improvements full steam ahead.
« on: 05 September 2018, 10:30:58 »
I'm confused - I can't see any mention of the 2 post ramp or pit being completed, and you're now worrying about windows and fitted bedrooms?

13
General Discussion Area / Re: 96k speeding fine !
« on: 04 September 2018, 17:20:20 »
He's not been done for speeding. He's been done for 3 counts of "failure to furnish" which is a completely different offence.

The penalty for FtF is more worse than for speeding - 6 points, hence 3 offenses = 18 points.

Still what do you expect if you read the Daily mail - accuracy?

14
Omega General Help / Re: How does air get into the fuel tank?
« on: 04 September 2018, 10:20:20 »
One of the (many!) faults on a Lotus Carlton is that the charcoal purge canister can get blocked. Then as the fuel is used up, the fuel tank is sucked in. Eventually the fuel tank collapses and any remaining fuel pi55es all over the floor. :o

15
General Discussion Area / Re: Broadband
« on: 29 August 2018, 21:36:25 »
16 quid off?  ???

Ours is only 13 per month in total with Plusnet?
Our 29.99 includes line rental at 18.99, so, if yours doesn't............

BT Line rental should only be 11.99 p/m ???

http://bt.custhelp.com/app/answers/detail/a_id/60353/~/reduced-rental-for-landline-only-customers

But Auto Addict said his Broadband was reduced by 16. If that included calls and line rental, fairysnuff. If it's just the broadband bit then ouch.

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