If you’re a Devon-based business owner looking to invest in property, a buy-to-let mortgage might be the right choice.
Rising demand for properties to rent, along with the benefits of operating via a limited company, means this could be the ideal opportunity to grow your investments. For instance, one of our clients, a local holiday let investor, increased their rental income by 25% within their first year of switching to a Ltd company structure.
At Mermaid Mortgages, we specialise in assisting local companies like you in dealing with the complex buy-to-let mortgage process.
What is a Buy-to-Let Mortgage for Ltd Companies?
A buy-to-let mortgage is designed for landlords who want to purchase a property to rent out rather than live in. For Ltd companies, these mortgages are tailored to suit businesses investing in property.
Operating through a limited company has specific advantages, particularly for tax planning and portfolio expansion.
For example, in 2022, a Devon-based landlord working with Mermaid Mortgages expanded from two to five properties in just 18 months, benefiting from lower corporate tax rates and streamlined management of their portfolio.
When you buy property through your company, rental income is taxed at the corporate rate rather than higher personal income tax rates. In a thriving rental market like Devon—with its blend of residential demand and tourism opportunities—this setup can maximise your investment’s potential.
Advantages
Tax Efficiency
One of the biggest advantages of using a Ltd company is tax efficiency. Rental income is taxed at the corporation tax rate, which is often lower than personal income tax rates.
Asset Protection
As an Ltd company, your personal finances are separate from your business assets. This limited liability means that if the business faces financial challenges, your personal assets are protected.
Scalability
If you’re planning to build a property portfolio, a Ltd company structure makes it easier to manage multiple properties.
Local Expertise in Devon
Devon is rich with opportunity. From long-term homes to short-term holiday homes, there is a massive range of options to consider. To fully get the most out of your investments, you must tap into market trends and understand the seasonal demands of the area, something that a local mortgage advisor, like Mermaid Mortgages, can provide.
Challenges to Consider
There are a couple of challenges that you would likely face. These include:
- Higher Costs: Buy-to-let mortgages can often have higher interest rates. Make sure you work with a broker to find the best deals.
- Set Up Complexity: There are additional administrative tasks, such as legal compliance.
- Local Market: Seasons can fluctuate in Devon which affects rental demand, and competition in prime spots makes it more difficult to secure a property.
Is a Buy-to-Let Mortgage The Right Step?
A buy-to-let mortgage could be a perfect fit for your Ltd company if you’re either expanding your property portfolio, diversifying your income streams, or targeting high-demand rental areas in Devon.
However, every business’s circumstances are always unique. Professional advice is essential to determine if this is the right step for you.
How Mermaid Mortgages Can Help
At Mermaid Mortgages, we are absolutely committed to helping businesses based in the Devon area to thrive. Some of the ways we can help are:
- Market Research: We thoroughly research the mortgage market to find the best deals tailored to your business needs.
- Expert Guidance: Our team provides personalised advice to help you understand your options and make informed decisions.
- Hassle-Free Process: From liaising with lenders to handling all the paperwork, we ensure the process is smooth and stress-free.
We’re not just brokers; we’re your partners in building a successful property investment strategy in Devon.
How to Get Started
Navigating the process can be difficult on your own. Mermaid Mortgages is here to help.
Taking the first step towards securing a buy-to-let mortgage for your Ltd company is simple.
For a no-obligation meeting, contact Mermaid Mortgages to book a free consultation today.
To learn more about our services, visit our Our Services page.
Your home may be repossessed if you do not keep up repayments on your mortgage.
