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I posted a question on the BTL tribe about leverage. In short, is it safe now to go beyond, say, 30% (bear with me, I'm new to all this...).
A very helpful reply told me that seemed to low and that he, the guy who answered my question, found that 60%-70% worked best for him. He noted, though, that I should get some specialist tax advice to establish what level of borrowing would suit my "risk profile".
Is this something any competent high street accountant can deal with or do I need to find one who specialises in BTL clients? If the latter, how do I go about finding one?
It was me who replied to you the other day.
It is not just a matter of the accountant it is speaking to all the people who would need to advise you, such as a mortgage adviser the mortgage costs are the main element to this. Then you decide what level of risk, based on all the advice you have been given, you are prepared to take.
When you speak to a mortgage adviser they should ask you some questions to establish your risk profile (low, medium or high). You then use this information along with the eventual tax position you may create for yourself (based on the accountants information). All this has an added complication of the fact that you have to, to some degree, speculate on what the future may hold for example further detrimental tax changes.
You will also have to consider what is the best vehicle for holding these properties, personal or company.
It is far from simple and only something that you can achieve once you have all the people around you supplying the relevant information needed to make that informed decision.
As for an accountant I would look for someone that has experience with B2L. We have seen over the last 2 years good accountants misinterpret the impending clause 24 so having one that knows the gravity of this particular tax is vital.
Finally financial and tax advice is like medical advice, just because I have a pain in my back and it turns out to be kidney stones doesn't mean that the pain in your back is also kidney stones. We are all different and that is why there are specialists to make sure that what each of us do is specific to our own circumstances. So just because I would go to 60% to 70% in no way means you should.
Landlord with 25 years’ experience in the property market and a specialist in tenant referencing, ID and credit screening. Creator of identity, credit and anti-money laundering system ValidID.co.uk