The Pros & Cons of Title Splitting

by James Lynch - #TheTitleSplitConsultant

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The upside!

1. Capital Uplift (25-35% Gains) One of the biggest advantages of title splitting is the ability to unlock the hidden value in a property. By splitting a freehold into leasehold units, you’re essentially turning one property into multiple, sellable assets. By picking the right blocks, you can find 25-35% uplifts, which is fantastic if you need to get all of your money out.? You can also sell some of the units if need be.

Think of it this way: why sell one block at a wholesale price to another investor when you can break up and sell to individual buyers at a retail price?

2. Diversification & Risk Management By splitting titles, you’re creating multiple units, each with its own revenue stream. If one unit becomes vacant, a tenant stops paying, or the investment simply underperforms, the others still provide cash flow. It’s a good hedge—you’re spreading your risk across more assets rather than relying on the performance of a single property.

3. Improved Financing Options Lenders see individual leasehold flats as a more mainstream option than a big Freehold block. This can open up more lender options or allow you to leverage a higher LTV. ?Plus, by splitting early, or on purchase, you can release equity and recycle capital into other deals without having to sell the entire block.

4. Flexibility to Sell or Hold Again, title splitting gives you options. You can sell a few units and hold the rest, or refinance the lot for cashflow. It gives you control over your exit strategy, and your personal goals. Flexibility is key.

And the downside..

1. Complexity and Cost Title splitting is a more complex process than simply buying and holding. You’ll need the right solicitors, valuers, lenders and accountants. There are higher upfront costs, including legal fees and surveys, and it can take a longer time to complete. If you’re not ready for the process, those costs and timescales can eat into your profits.

2. Timing is Critical Splitting titles at the wrong time can hurt your financing or delay the process. Ideally, you should split titles as early as possible to unlock equity, but if the market turns or your financing falls through, it can leave you in a tight spot. That’s why having the right professionals and a solid plan in place is crucial.? Don’t get stuck on the bridge!

3. Mortgage and Legal Hurdles Most mortgage lenders will not allow this process. Many mortgages have specific clauses that prevent title splitting. You’ll also need to ensure your leasehold agreements are correctly created, as any missteps here can cause problems come exit time.

4. Managing Multiple Units If you’re used to managing single lets, be prepared for the increased workload. Managing multiple leasehold units comes with its own set of challenges—more tenants, more maintenance, more regulation, more accounting. While you can hire a managing agent and/or block manager, this adds to your ongoing costs and reduces net income.

Want to talk through how we can help you with your title splits?? Drop me a DM, or book an intro call here; https://calendly.com/rightside

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