What is Buy-To-Let Finance?
Buy-to-let finance (BTL finance) is a mortgage used by investors looking to buy and hold a residential property which is let to tenants on a single AST. The rent from these properties is used to cover the loan repayments and may generate additional income.
We recommend speaking to a mortgage broker before you take out a buy-to-let mortgage, as we can help you find the most suitable deal for you. These can be taken out as an individual, limited company or limited liability partnership (LLP).
Good BTL investments can offer strong yields. In addition to providing a monthly income, they are a long-term investment, and owners can benefit from increased property values over time, although prices can also go down.
Who is it for?
BTL mortgages are designed for individuals or companies looking to rent out a private property to tenants on a single AST. Clients range from first-time investors, to pensioners, professional landlords and limited companies or special purpose vehicles.
Investors looking to take out a buy-to-let mortgage under the name of a limited company should refer to our Limited Companies / Special Purpose Vehicles section.
Buy-to-let Finance as part of B.R.R.R
B.R.R.R. stands for Buy, Refurbish, Rent, Refinance – refinancing typically happens through a buy-to-let mortgage and is the final step in the process. It is the key step to enable investors to extract as much of their investment in the property as possible to be able to use that money again.
This property investment strategy involves purchasing a property, adding value through refurbishment, renting it out and then refinancing onto a term buy-to-let mortgage to obtain funds for further use. This strategy has enabled many investors to grow their property portfolios.
Visit our B.R.R.R. Property Journey page to learn more about this process and examples of projects CPC Finance has completed with clients.
To ensure your property is a viable investment, you should undertake extensive research into the local property market to determine the demand for the specific rental accommodation.
Geographical location can often affect the appeal of a buy-to-let property. For example, if the building in question is located near a transport hub or hospital, this will improve its demand and therefore its rentability.
Many people become landlords as a part-time occupation. Whilst this is a viable way of operating, we recommend every client ensures they are in a comfortable position to manage their investment. Additional income may affect your tax band so you should also consult an accountant.
Get in touch today to discuss your investment options. A buy-to-let mortgage can be taken out under the name of an individual or a limited company.
+44 (0)1923 655441