Increase Your Edinburgh Property Portfolio
Now that 2020 is here landlords have the final step of the cuts to mortgage tax relief to contend with. The total they will be able to claim against tax is 20 percent across the board (regardless of what tax bracket they happen to be in).
At the same time other maintenance and expenses claims have been reduced. To make matters worse, obtaining a buy to let mortgage doesn’t get any easier.
But it’s not all doom and gloom. It’s still possible to expand your property portfolio. It’s just a matter of playing clever, especially when it comes to certain aspects, such as:
Getting the right mortgage from the right lender
Most landlords will find specialist mortgage lenders are certainly the way to go here. A number of high street banks won’t even consider buy to let landlords while others have rates which many landlords consider unaffordable. Mortgage brokers often have access to some of the best buy to let landlord deals around and are definitely worth speaking to, especially if you are considering re-mortgaging and/or purchasing further properties.
Be prepared to be able to pay two per cent above your actual interest rate though. Since new rules introduced by the Prudential Regulation Authority landlords have had to guarantee rental income of at least 125 per cent above their mortgage payments. In some cases, lenders are asking for evidence of income that’s 140 per cent of the original mortgage rate).
Saving for longer to secure a bigger deposit
The best way to ensure that your next buy to let mortgage is affordable is to put down a bigger deposit than usual in the first place. It may take longer before you can invest in that next property but it will be worth it when it comes to securing a good buy to let mortgage rate.
Making your mortgage term longer
Most property investors want to pay off their mortgage as quickly as possible. Some lenders are fine about adding personal income to mortgage income. However, for those that won’t, a longer-term mortgage is usually standard. This can make the buy to let mortgage more affordable but, of course, means interest over the long-term is higher.
Choosing the right property
Most property investors decide from the start whether or not they’re looking for long term capital growth or high rental returns, allowing them to go on and buy more properties quickly. This depends on the type of properties they purchase, and also where. High yielding properties, such as ex-housing association and local authority properties are better for the latter. Larger, family-homes, tend to be better for capital appreciation.
Get in touch
At Clan Gordon, we specialise in looking after landlords and their properties. Many of our clients are property investors with portfolios; others have just one or two properties. Regardless of the size of your portfolio, we’d be happy to help manage your property. Why not get in touch today? Call the team for a chat on 0131 555 4444 or take a look at our website www.clangordon.co.uk.