Who do you need to succeed as a buy-to-let investor?
When investing in buy-to-let properties, it's crucial to recognise that you're essentially starting a business. Like any business, this venture comes with its own set of rules and regulations - both those specific to property management and those related to running a business. This includes understanding the tax implications for all your income, not just the rental earnings.
Navigating the legal, financial, and practical aspects of buy-to-let can be complex, especially for new landlords. Mastering every aspect is not only difficult but also extremely time-consuming.
The most successful landlords are those who build a strong network of professional advisers. These experts help ensure that the buy-to-let business is set up and managed effectively. As a result, these rental properties are typically:
- Purchased, owned and financed correctly
- Fully compliant with legal requirements
- Consistently rented to reliable tenants
- Profitable
- Tax-efficient
Here are the key advisers we recommend you consult:
Financial adviser
Before investing in property, it’s advisable to consult with a financial adviser or wealth manager. They can assess your current income, savings, and other investments to help determine how property can best complement your overall wealth portfolio. Additionally, they can provide guidance on the optimal ownership structure, strategies for maximising returns, and whether mortgage financing is advisable and how much to consider borrowing.
Property tax specialist
Property tax is a complex field, so even if your financial adviser has some knowledge of it, working with a dedicated property tax specialist is highly beneficial. This expert can help you understand the tax implications of your investment choices. For instance, increasing your income through property might push you into a higher tax bracket or even impact benefits like child allowance if you receive it.
Mortgage broker
Buy-to-let mortgages differ from residential ones, with lending criteria focused primarily on the rental income the property will generate. A specialist mortgage broker can assess whether a property is financially viable and recommend the most suitable mortgage options.
It's important to note that most buy-to-let mortgage products are only accessible through brokers, so working with one who has experience in securing deals for landlords is essential. If you plan to own multiple rental properties and become a 'portfolio landlord,' you'll need specific mortgage products with stricter lending criteria—an area where an experienced broker can provide invaluable assistance.
Local property agent
To make a rental investment successful, it's crucial to choose the right property. Once you have a clear investment plan and goals for your desired returns, consult with knowledgeable local sales and lettings agents. They have insights into local supply and demand, pricing, and growth trends, helping you identify the type of property and tenancy that will best meet your objectives.
Legal representatives
Having a solicitor or conveyancer with experience in property investment is invaluable for ensuring a smooth purchase process. It's worth seeking recommendations from local agents and other landlords to find the right professional for your conveyancing needs.
For instance, consider the best ownership structure for your buy-to-let property. If you're married, a joint tenancy agreement may not be the most suitable option for various reasons. If your financial situation is complex or you're planning to pass on property assets in the future, consulting with someone experienced in estate planning is advisable.
Buy-to-let limited company expert
You may be able to enhance your investment returns and safeguard your profits by setting up a limited company for your buy-to-let property. Our Smart Investment service, in partnership with GetGround, can establish your buy-to-let limited company in under 30 minutes.
This service helps you boost post-tax yields, improve capital gains, minimize investment risks, access mortgages more easily, and streamline inheritance and estate planning. By combining our property management services with buy-to-let limited company formation, we handle every aspect of your investment, allowing you to focus on enjoying the returns.
We’re always ready to assist landlords at any stage of their investment journey.
Want to know more about the lettings services LRG can offer you? Call us on 01344 753100 and quote that you’re an NRLA member to find out more about the exclusive discount* we can provide, or click below to find out more.
