With property prices having fallen well below their peaks and with buyers struggling to find adequate deposits, the rental property sector is booming. As a portfolio landlord, it is essential that you get the right advice to aid in your expansion plans
Existing Portfolio Landlord
As the owner of a number of rental properties, whether they be occupied by residents or by commercial enterprises, the last few years have been "interesting' to say the least.
If your portfolio is wholly or mostly comprised of shopping arcades, stores, factories ar workshops, you have been having a torrid time. Most of the traders have probably departed and it may have been very difficult to earn enough from rental income to meet any finance repayments. If the economy does not turn around soon, you may be forced to dispose of much of your portfolio to whomever will buy, possibly at a loss.
There could, however, be an alternative, provided that planning permission can be obtained to turn some of these unused buildings into accommodation. You may wish to check out our pages on Commercial Property and Development Loans .
On the other hand, if you are predominantly the owner of properties rented out for accommodation, you have probably never seen such times. The demand for housing outstrips the available housing stock and most rented properties do not stay empty for long.
Now is probably the best time possible to add new properties to your portfolio, while prices and mortgage rates remain relatively low.
Lenders do have restrictions on the numbers of properties on which they will lend or on the maximum number of properties they will accept as a portfolio but, if you are looking to extend your portfolio, talk to us about what options you may have, whether you should incorporate, etc.
New Portfolio Landlord?
So, you are seriously considering whether you should get on the 'bandwagon' and become a portfolio landlord. You may have experience of letting a property in the past and you are aware of the opportunities that exist in the current market to take advantage of the shortfall in housing stock and the difficulties people have in buying their own homes.
It may make sense to enter this arena but, before you do, take the time fully to understand what you may be getting into.
To start with, most buy to let lenders will want you already to be a home owner and, preferably, also a landlord. You will need to confident that you will be able to meet all mortgage payments as they fall due, even if you do not have a tenant for a period (referred to as a 'void'). You will also be responsible for any insurances on the property(ies) and the lenders may well put restrictions on the type of tenant(s) they will allow you to have.
You need to take account of income and inheritance tax liabilities and it may well be appropriate to form a limited company for the express purpose of buying and renting out property. Some lenders, however, will not lend to a company until it hs been trading for a number of years; the classic 'Catch-22' situation.
Whatever your situation and circumstance, we encourage you to contact us and tell us what you wish to do. We will then be able to guide you on the best way to achieve your objectives and which lenders can assist you.