Have you ever thought about Buy to Let? With interest rates remaining low and the national shortage of housing in the UK, some people think it’s never been a better time to get into Buy to Let.
So what is Buy to Let?
You, as a landlord buys a house and rent it out to somebody else. They live in it and pay you rent. You pay the mortgage, buildings insurance and other costs, and anything remaining is profit.
So why is Buy to Let attractive? Two reasons:
1. It’s a long-term investment with the potential for capital growth. This long-term investment may form part of a pension when you retire.
2. It gives you the ability to leverage your money. Put simply, leveraging is using somebody’s money for the potential of higher growth. If this house costs £100,000 and you only put in £75,000 and borrow the rest. That borrowing is paid back in rent and can be tax efficient.
If you’ve never invested before, you’ve probably got a lot of questions running through your head. Charterhouse Accountants are here to help.
Before you make any purchase, you’ll need to decide whether you’ll purchase as a limited company or not. This all depends on your own personal circumstances; however, a limited company may reduce your tax bills. Buy to Let lenders who offer mortgages to limited companies usually require them to be a Special Purpose Vehicle (SPV). An SPV’s sole purpose is to specifically hold property and is not usually permitted to be used in any other trade.
So what next?
The next step in your mission to become a property giant is to get some advice. Even if you think you have the knowledge, it’s still worth considering getting mortgage advice, legal advice and accountancy advice.
If you’re interested in Buy to Let and you’d like to find out more, contact us today to book a place at our next seminar.
Call 01782 777377 or email firstname.lastname@example.org.