Are your finances in order?

Dipping your toe into the buy-to-let market for the first time can be as challenging as it is rew...

Dipping your toe into the buy-to-let market for the first time can be as challenging as it is rewarding. One important consideration is ensuring that your finances are in order before making that first step.

Depending on your circumstances there are various ways to finance a buy-to-let venture. Some of our clients are cash buyers and others require a mortgage to get started. This poses the first question of ‘What mortgage vehicle will best suit my needs?’. There are a lot of mortgage products out there and it is a matter of selecting the best one to tailor your requirements.

Of equal importance is the structure of ownership. Let’s say a couple bought a buy-to-let property, how they hold their individual ‘share’ of the property typically falls into two different categories: joint tenants or tenants in common. The latter can be seen as more advantageous from the standpoint of transferring their distinct share of the property on death to their children.

The way property is owned as outlined above gives rise to varying tax implications for landlords depending on their motives for investing in property. Factors to consider are: how long the property is to be held as an investment, the tax position of each individual i.e. what rate of income tax they pay and the likelihood of them extending their portfolio.

Belvoir works closely with St. James’s Place Wealth Management to offer its clients a bespoke package in sourcing the right property for their financial circumstances. With the pension reforms unveiled by Chancellor George Osborne in the recent Budget there is scope for investing this income in property but there are associated tax implications which need to be addressed. Getting the correct professional advice is paramount in ensuring that your asset is fully protected.

If you need any advice on anything contained above we can arrange a FREE no obligation meeting with a wealth management adviser who can discuss your finances in more depth before committing to a property investment. It’s often too late when you discover something is incorrect which can cost your dearly.

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