Buy to let - via company

ambercelery

Are there any benefits to buying a house or flat to let via a company rather than privately purchasing it?

Obviously it would involve the extra hassle of creating a company etc but are there any benefits to asset belonging to the company and the rental income being paid to the company rather than the individual?

stuartlwilliams

I've just setup a company to do buy to lets. I already have one flat let out, owned by me personally.

I setup the company because I want to expand my property portfolio and an advisor mentioned it. The advantage is mainly for tax reasons. The company makes the money, and you don't have to pay income tax until you get the money out of the company. Keep the profits in the company and use it to buy more properties!

However, you are limited in the number of lenders that will give a mortgage to a limited company. so you may not be able to get all the properties you want.

I suggest you meet with an accountant that specialises in property.

Good luck

ambercelery

Many thanks - that is exactly what I am wanting to do too and its good to know someone that has experience doing so.

So am i right in thinking that as director of the company you are then liable for the mortgage i.e. you apply for a mortgage as you would if you were applying for a personal mortgage.
Then any money made through rental is kept in the company and as you say is free from income tax.
Does this mean that the company could use this income (if it was greater than the mortgage payment per month) to over pay the mortgage and therefore reduce the term of the mortgage.
Or can you only build up cash in the company and then when you are able to afford another property , use this cash to do so.
Many thanks for your time.
PS. Have you read any good books on using a company to purchase property?

DaveRammo

I subscribe to an online magazine which helps me find hotspot investment areas in the UK:
https://www.propertyhotspots.net

The guy that runs it is quite renowned in his field and he also has a company that buys property on behalf of the client and builds a portfolio for the client.

I'm not sure if this is what you are looking for and I must stress that I have never used this service. Not because I don't want to, but because I don't need to - have enough time on my hands to look around myself.

Here is the address if you're interested:

https://www.buytolethotspots.com

Hope that helps

Rammo