Nuneaton Landlords- Is a limited Company the way forward?

There’s no doubt about it, 2016 has been one of the most draw dropping for landlords what with Brexit, the new 3% stamp duty on all buy-to-lets, changes to tax and now the banning of tenant fees, all of which has left most landlords thinking “is this really worth it?”. This is definitely reflected in the rental market with buy-to-lets dwindling on the property portals.

Well, I’m certainly fed up of the doom and gloom that seems to sum up 2016 for landlords so, in the spirit of Christmas, I am going to attempt share joy and good tidings…

It’s becoming increasingly popular for landlords to buy through limited companies and, according to specialist lender Fleet Mortgages 60% of it’s purchase buy-to-let business is now limited companies, which is up 20% over the last 12-18 months.
So, is this right for you?
Well take a look at the pros and cons and see what you think…

Limited Risk
Because the property is owned by the limited company your credit file cannot be damaged by debts associated with it (unpaid council tax or utilities)

Tax efficiencies
Corporation tax is charged at 20% on profits up to £300,000 (this is going down to 17% in 2020). Limited companies are not subject to the new ‘turnover tax’…perk! You can pay yourself tax-free dividend income up to £5,000/year from your new shiny limited company…more perks!

Build your portfolio
Use your profit to save a deposit for your next buy-to-let and guess what…you don’t pay income tax on profit so, save away!

Gift Assets
You are totally in control of your business and who you name as the directors or shareholders so you could, in effect, gift an asset to a family member (Christmas presents for all the family!)

Mortgage Premium
Before you start sobbing at even MORE bad news, this isn’t too bad. It’s just that some lenders tend to charge a premium for mortgages lent to limited companies HOWEVER more and more lenders are now offering cheaper limited company loans.

Costly and Complex
This sums up the decisions made in 2016…only joking (or am I?!) It can be quite expensive to transfer properties that you already have into a limited company and it’s complicated so please make sure you seek professional tax advice.

More time consuming
You’ll have to add ‘Tax Return’ on your annual to do list, which does take longer than a personal tax return. But, if you keep on top of things on a weekly basis you will be better prepared at the year end and hand it all over to your lovely accountant (shop around to get the right accountant. One specialising in property would be helpful).

Tax on Exit (or Texit as us Brits like to shorten everything)
When an individual sells a property they have an allowance of £11,100 Capital Gains Tax allowance (2016/2017) but this allowance doesn’t apply to companies. But, why sell? Just build your little property empire and enjoy.

So, are you about to open a new web page and type in to set up your new limited company/ property empire? Well, like I said before, have a think about it, speak to a professional tax advisor and see where you can go from there.

I hope I have managed to bring some joy or glad tidings your way. Either way, I wish you the best of luck in your investigations and I hope it all works out for the best.

If you wish to discuss your investments in more detail please feel free to pop into our office for a chat or give us a call on 02477 674 545.

2 Nuneaton BTL opportunities…but which would you pick??

brendon-way VS


Good Morning all, I hope jack frost hasn’t put you off searching for that perfect buy to let investment? I know I sure haven’t been! In fact, I have 2 houses to show you today, both of which I’m sure would appeal to people in different aspects but I thought I’d share my opinions and some facts on each property with you…then you can decide which would be the ‘better’ choice.

First, we have a lovely, modern, 3 bedroom semi detached property located in a quiet cul-de-sac just off the Whittleford Road which I do believe is classed as the Camp Hill area of Nuneaton. It has off road parking and a small conservatory with the possibility to extend. Internally it looks very modern and very much ready to let and would appeal to a young family or working professionals, especially with the added bonus of the off road parking.
This property is on the market with ‘One roof property’ for £141,950. This house would be able to fetch of rent of around £695 PCM, giving you an annual yield of 5.88%. If this particular property were in another area of Nuneaton such as Atlleborough or Whitestone you would most definitely be looking at getting a better yield due to higher rents that could be charged!

property 1 particulars

The second property isn’t a million miles away from the first, located on Brendon Way, on an estate which many years ago was predominantly council houses. Over the years the majority have been bought and are now privately owned. This one in Particular is a prime example of not judging a book by its cover…. you really NEED to have a look at the internal pictures as its stunning!!Finished to a really high spec, it looks more like a show home, and would most definitely attract a higher end tenant regardless of the area. This property has 3 good sized bedrooms as well as a conservatory and a garage. Size wise It is substantially bigger than the first property also. This type of house would in the same way appeal to working professionals and families looking for their ideal home.

This is on the Market for £115,000 with Your Move-

property number 2

If you were to pay the asking price for this property which in all fairness I think would be a good call, you would also be able to charge rent of around £695 a month and you would have no shortage of interest! This would in turn give you an annual yield of…wait for it…. 7.25%!! A lovely figure indeed!

I think from reading this article you can guess which property I would favour as a buy to let investment, but I do know different people have different ideas of the type of property they like to own. You must always remember that it is not you who will be living in the house, looking at the bigger picture like yields, the areas where the property is situated, and what you will be able to get out of your investment in years to come are all contributing factors when picking any property!

If you would like to speak to us about either of these properties or any others you many have your eye on, we’d be more than happy to share our thoughts with you. Pop in to our office on Bond Street or give us a call on 02477 674545.qui