Do you rent but want to buy

How Buy to Let Mortgages Works

BTL’s as they are known in the industry, not to be confused with a BLT have surged in popularity in the last year.

“234,000 buy to let mortgage loans were taken out in the last 12 months” Source: Finder UK June 2021

What is a buy to let property? A property you purchase that you will rent out.

A specific BTL mortgage can be used to purchase the property

The property is purchased as an investment without the need to save up the full amount to buy outright.

The property is then let out by you, and you act as the landlord to the people that rent it from you

Rental charges are made to the tenants to cover the mortgage and other costs

How can you make money from a buy to let property?

1. Rental income: the rent charged should be more than the monthly repayment costs of your mortgage. You should consider costs such as repairs and agency fees as well as a profit for yourself also.

2. Capital growth: Ideally you can make money if you sell the property for more than you paid for it. The property price needs to raise more than the rate of inflation.

Tax implications when selling a BTL property and on the rental income

You will absolutely have to pay tax on any profit you make on a buy-to-let investment this includes:

1. Capital gains tax on profits you make on selling the property

2. Income tax profits made from rental income

Do I qualify for a buy to let mortgage?

Each lender will have different requirements, but the main rule of thumb is they will only accept the application if they believe you can afford it.

The amount the rental income property is expected to be let out for, as well as your personal financial circumstances are taken into consideration

But the best help we can give you is by speaking to you over the blower!

So, pick up the phone today or drop us a line to get your property dreams underway


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