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  • Buy-to-Let

    First time looking to buy through LTD company

    Hi All, 

    So this is my first post. . . 

    I am wanting to get my first buy to let at the end of summer and I currently have a trading LTD company but as I understand its better to buy through a special purpose ltd (SPV). 

    Im looking for a little advice on which direction to go ! With mine and my wifes current income we should be able to raise around 20k - 30k a year for BTL properties and was looking at the lower end of the market 60-70k. 

    Can anyone give me some advice ?

    Father in law has several buy to lets but they are not financed so doesnt have much experience with regards to btl mortgages.

    Thanks All !

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    Hi Richard

    You need to work out your longer term plans in more detail and then seek tax advice and then mortgage advice. You can borrow up to 70-75% of the value (arguably more).


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    Chartered Accountant, Tax Advisor and Mortgage broker

    (and BTL portfolio owner)

    stuart@johnsonsca.com

    02039077022


    Hello Richard

    The first step is to talk with a specialist BTL Broker who understands the market.

    SPV's are the typical Ltd Company ownership route, and welcomed by most BTL lenders who offer corporate BTL loans. We also have lenders on our panel who would accept a general trading Ltd Company too, but that panel is much smaller.

    The downside of your proposition is that a lot of Ltd Company BTL mortgage arrangements require minimum property values of at least £75,000 (and with some lenders, if the property is in London, it could be much higher than that).

    The first step, before making offers on properties, is to get you "good for the money" via the initial Fact Find and Agreement In Principle process.

    The Team of mortgage brokers at https://www.PropertyTribesFinancialServices.com is available via email advice@ptfs.co.uk or 'phone 01206 654 444.

    Best of luck with your property adventures :-)




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    Thanks for the help !

    We are looking to have a deposit of around 25%. The ROI on properties of a value of £75k are still reasonable within the specific areas I am looking at ( I grew up in south Yorkshire so I am looking at properties around that area at the moment) 

    We are looking to accrue property for a pension of sorts when I am older. 

    Currently we have a large disposable income that I would like to work for me by providing a good return. We have self managed a property before but we are looking to get them estate managed eventually. 

    I would like to get to a point where I have enough houses that they become "self populating" as in providing enough income per year to buy another property. 

    The ultimate goal would be to get into student housing once I feel like I have gained enough experience as a landlord and also accrued enough capital to make that work for me.  ( close proximity to hull and York for student lets there) 

    The only upside to running the properties through the trading company is that I am vat registered so could claim vat back etc. Other than that I would create a holding company. 

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    I would say Keep BTL in your own name

    a company needs a lot of hard thinking

    if your useing a company just to avoid s24 alone I’m not sure if it’s the right thing  to do

    you memtioned a pension

    if that is your main goal why not just use a SiPP in the first place

    BTL I think is a job and it can be stressful just like running any other business

    take sound advice and think this through before you commit

    once you form a company your going to be in a straight jacket of rules and regs much stricter than personal BTL

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    It's not possible to put residential property in a SIPP.

    I get involved with a lot of SIPPs for commercial property and many owners regret their loss of flexibility.  Legally it's not theirs, they are merely beneficiaries and find they have lost control.


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    You are 100% correct you not put residential properties in a pension

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    I was saying why not use a SIPP other than buying residential property in the first place

    a lot less hassle than buying BTL property


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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    It's not just to avoid S24, we are also higher tax bracket earners too. 

    I run a business myself that i need to commit 20-30 hours a week to and I am looking at BTL as a way of getting capital earned out of the business to work for itself. 

    The properties will be managed by an estate agent. They are not solely for a pension the idea is to become financially independent through investing and growing a property portfolio. 

    I am looking at properties on the lower end of the market of around 70k but are there any lenders out there that can help finance lower value housed ? Say properties at 50k with a 15k deposit ? 

    ​Thanks all ! 

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    You should most definitely NOT buy your investment properties in your Trading Company.


    IME the Mortgage provider will not allow this. Mortgage providers will want a property investment company to only invest in property and to not engage in any other potentially highly risky business activity, so this is likely to be a condition of your mortgage(s).


    Similarly, if you have a property investment company DO NOT start any trading activity in your property investment company for the same reasons (I made this mistake once and would not do so again).

    Trading activity could potentially put at risk any of the properties that you have in the property investment company and why, after all the blood, sweat and tears required to accumulate the properties in the first place, would you put your properties at risk).


    IMO property investment should be “ring-fenced” in a company (if indeed a company is appropriate at all) that operates specifically for this purpose. Always keep one eye on protecting what you have already acquired as you try to grow your business and/or investments.


    The tax treatment and the accounting rules around property investment companies is also slightly different to trading companies so that is another reason not to mix other activities in to the company.


    You CANNOT claim VAT back on expenses for VAT exempt supplies – to do so is actually VAT fraud. Rent (residential) is VAT exempt so the VAT component of any expenses related to the earning of rent cannot be claimed back via the VAT return (another reason for not mixing property investment in with VAT rated supplies in a trading company – it creates a nightmare for your bookkeeper/accountant).


    As to the question of whether you should buy in your own name or buy in a company to me this really depends on your ambitions, goals, resources, ability and focus.


    If you want to buy one or maybe two properties for your retirement then buying in your own name is probably the best. Pay down the debt over time and live on the income before selling and living on the capital for the last few years before you die.


    If however you want to create a “property empire” with millions of pounds worth of property (whether it is “better” to have five £1,000,000 properties or fifty £100,000 properties is another question of course) AND you have the resources (capital), time (time is on your side when you are young), energy and focus to make this a realistic goal then IMO a company is the better option.


    Start with you end goal (but be realistic, most people actually do not want to put in the work required and quit when the going gets tough – which it undoubtably will at times) and work back from there.

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    Thank you this is brilliant advice. 

    I would like a lot more than two properties and im not afraid of putting in the hard work ( getting my own business of the ground was no easy feat !) 

    Thanks for clearing it up with the company, I am looking to create a new ltd company in which to just pursue rental property. 

    End goal is to have enough property to provide me with an income that can sustain me and my wife without working of course, have a holiday home in the canaries etc !


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