Limited company buy to let
Explore mortgages for companies with Wise
If you have a limited company buy to let, you are probably well aware of the complexities.
However, suppose you have only heard about the benefits, or you know others who are now buying with a limited company. If so, you probably have many questions, and you’re likely in the conscious incompetence stage. In that case, you know that you don’t know enough (yet).
We have extensive experience preparing property investors for buying their first property through their newly formed limited company, often known as a Special Purpose Vehicle (SPV).
Why Limited Company?
Some reasons our clients have told us they have formed limited companies (special purpose vehicles) for property investment:
- Preferential taxation for their long-term objectives.
- Making several members of the family shareholders.
- Better stress testing and making smaller deposits easier, particularly on higher-value properties.
What do you want?
When buying a buy-to-let, you’re likely in the investment stage, looking for returns on your hard-earned. You aspire to have more in life, but what does “more” mean, and what does it look like? Those investing in buy-to-lets have different plans, goals, motivations, and visions. Do you know what yours is?
- Whether you need a buy-to-let lender who allows you to borrow more in the future.
- If you need a lender that allows you to buy a property that needs a heavy or light refurbishment before it’s let.
- If you should be getting tax advice from a tax adviser to explore ways to reduce your liability.
- What the market is like, and whether you should be aiming towards a larger deposit for a better rate and better cash flow.
- Whether you need a specialist mortgage like a limited company mortgage or whether you need a lender that permits short-term lets, holiday lets, or multiple tenancies (HMO).
How will you fund it?
At this point, you have likely bought a property before, but it may have been a long time ago, and you are conscious that a lot has changed. You likely remember having to put down a deposit, unless you were buying pre-2008 when you could get 100% mortgages like they were going out of fashion. When it comes to buying a buy-to-let, you generally require a higher deposit than buying a personal residence, and the deposit usually needs to be a minimum of 20% of the purchase price.
(No savings? Explore how you can get a deposit for a buy-to-let using equity in a property you already own, and contact Wise today.)
Funding that 20% deposit can be done in various ways. Some people find an excellent property investment and decide to go into it with a friend or family member who has more cash, some will have been amassing savings that they want to put to work, and some people release funds from an existing property they own. We have seen many fund their deposit from funds sitting in the individual’s trading limited company, which can be done as a director’s loan. There are several options to consider, but talking to an expert is the route to getting advice on what is likely to be best for you.
Limited Company Remortgage
We cover buy-to-let remortgages in depth here, which is relevant if you also want to remortgage or find a new deal for a limited company buy-to-let that you currently own. However, obtaining a new deal or remortgage for a limited company buy-to-let is a little different from an ordinary buy-to-let.
- Whether you set up a limited company buy to let bank account.
- Whether you have changed the company structure since it was set up.
- If you have started doing any other trading in the limited company that a lender may not like.
Find out how Wise can make the process simple
Invest Wisely for a wealthier tomorrow, today.
If you would like to have a fee-free no-obligation chat with us, contact Wise, and a friendly adviser will guide you through the most lucrative options available.
