Title splitting is the process of splitting the title deeds of a building, such as splitting a large house into 3 apartments. This would create 3 title deeds rather than one. This will increase the commercial value, boost the yield from that building, and your property portfolio.
To carry out a title split it is certainly worth engaging a solicitor as the process can be complex and complicated. But here I hope to give you some information that can help guide you.
The best property to title split is freehold blocks of flats or mix use blocks but they need to be on one freehold. In this situation you can create individual apartments with separate leases. You can find these type of properties via the well known online portals such as Zoopla and Rightmove plus estate agents and auctions. Some online portals let you search key terms such as block of flats which is very useful. You maybe able to source property direct to vendors via letters. This method can be seen as old fashion but in the past month I have had a hit rate of 2/10 letter being answered, which has now put me in contact with a developer in Wigan - it was certainly worth a stamp.
The huge benefits is you will increase the value of your property as you now have either additional properties on the freehold or you have create a brand new property in your garden. You will also increase your rent potential as you have additional spaces to charge rent for and you will add extra properties to your portfolio. The new additions you have created could be a helpful lever for future JVs or finance raising. Some investors create the title split documents and then look to sell, so they can sell the original property with the new title split consent which should lead to a profit without lifting a paint brush.
But the negatives you need to consider are the capital gains tax will be charged when you sell each property that isn’t your main residence. If you are creating additional properties then you have to refurb and maintain these which will have ongoing cost implications.
For myself, I see the benefits of title splutting far out weighting the negatives.
