SIPs

[Ozzy]

Hi Money Shifting Friends,
Before I get carried away with this....

I have a reasonable pension fund for a 30 year old, and my company is thinking of moving offices. I am toying with the idea of taking my fund and putting it into a SIP and buying an office unit big enough to have my company aswell as 1-2 other businesses to bring in extra rent.
However, I'm not sure how the mortgage payments work out on a SIP and repayment amounts. I may just stick with a "normal" pension and rent/lease the office as it could be more cost effective that way for Quick. However, if I'm going to do a SIP I need to do it soon before the rules change next year - hence the question.

ie. Anyone have an idea on how repayments on say a 150k SIP mortgage would fair?

There is also quite a run down unit on an industrial area near me which is on the side of a busy roundabout - perfect visability! I'm kinda in love with its potential.

 

[autolycus]

Richard,

As far as I'm aware, the SIPP takes out a standard commercial mortgage, so the rates etc are whatever is currently available in the market.

There may be a requirement for you to personally guarantee repayments, but I'm not sure.

The SIPP has to charge you (and any other businesses renting from it) the going rate in terms of rent. All rents received go into the fund and boost your pension.

In terms of the initial purchase then, so long as you have enough in your fund, the SIPP pays the deposit, survey fees, legals, etc. Not sure what happens if the fund is not big enough but I'm sure there is a way to "lend" personal money to the fund if req'd.

Please note I am not a IFA and the above is based on my own understanding of things having known people who have done what you are proposing in the past. I can recommend a commercial mortgage specialist if you want.

HTH,
Dave.

 

[Ozzy]

Thanks David,
I got a couple of other private replies which all in all have helped me decide the time right now is not quite right, so have decided to put it on the back burner.

Thanks for the reply though,
Cheers