Better to purchase BTL as a company or individual?

Crashy_Time

I would say the chances of you getting multiple BTL mortgages at this stage of the game are about zero.

buggy_boy

Crashy_Time wrote: »

I would say the chances of you getting multiple BTL mortgages at this stage of the game are about zero.

What are you basing this on? Ltd company BTL mortgages dont have the same wanting your own home as its a separate legal entity. The OP has not said how much of a deposit he would front up, that makes all the difference.

buglawton

buggy_boy wrote: »

BTL is a risk, generally speaking the higher the yield the more risk...

I think before people start saying its not a good idea we really need to understand what sort of deposit you will have, what is the sort of value of the property you want to buy and what sort of rent will it get...

You will need at least 25% deposit, even at 25% deposit after expenses and changes in taxation this may not be enough, at the moment cash is king.

I am going to make some sweeping assumptions here but its common one, you are looking at up north properties that can be bought for around 80-100k, with rent of around £600 pcm. with a 25% deposit, you will be limited in BTL mortgages you can get because you have no experience and do not own your own home so you will be paying circa 4%, plus £1000 product fee every few years... On £75k mortgage thats interest and fees of of £3500 (plus 20% of that taxed by 2020(£700)) as you are not local and have no experience you will probably need an agent, they will charge around 15%, add insurance, gas safety certificate and general maintenance of say £1500 pcm, add in voids of 1 month a year (you will have to pay council tax and utilities in this time and your rent of £7200 you will have just over £400 per year loss and thats optimistic.

Remember at that sort of end of the market the likelyhood of tenants not paying or damaging the property is high. By the time you have paid the purchase costs it just does not work.

I don't mean to be rude but £30k a year in London is not much, unless you are in London because of family I would recommend getting out of London and buying your own home. The days of average joe's getting massive portfolios relying on increase in property prices re gone, it was a risk and some have made a lot of money but those that have tried it recently will be in trouble by 2020.

Not a problem for Jeremy Hunt who bought a job lot of 7 BTLs and by doing that even jumped through the neat loophole left by his Tory mates and avoided the 3% extra stamp duty to boot.

buggy_boy

buglawton wrote: »

Not a problem for Jeremy Hunt who bought a job lot of 7 BTLs and by doing that even jumped through the neat loophole left by his Tory mates and avoided the 3% extra stamp duty to boot.

Yeah think it just goes to show both section 24 and the 3% SDLT were not put in place to slow down BTL it was to move it from the individual having one or two rentals to large corporations (Tories and their friends). It takes advantage of the vilification of landlords.

Pixie5740

I wonder if this is before or after the OP purchases a £500k property for the family to live in.

https://forums.moneysavingexpert.com/discussion/5835814/how-to-get-a-higher-mortgage-on-low-income