Here are some of the most frequently asked questions by our clients. If your question hasn't been answered here just let us know and we'll be happy to discuss with you.
Should I purchase in my own name or set up a limited company?
Succinctly, if you’re planning on one or two properties, buy in your own name. Building a portfolio of 3 or more? Incorporate.
Is taking a Ltd company mortgage more expensive?
In general, limited mortgages are more expensive than personal equivalents – yes. Currently there is much less choice on the Ltd company side, but more products are coming to market these days. In the end it comes down to numbers. Try out our calculators here to see how company mortgage rates compare to personal, when balanced with tax costs.
Is it tougher to get a company mortgage?
In short, no. It’s no different to a personal buy to let mortgage in general underwriting terms. The strength of the application comes from the directors and majority shareholders themselves, rather than the Ltd company itself.
How do I ensure I'm compliant with all property and rental legislation?
Our clients tend to target a passive income from their investments. With that in mind, and in light of ever increasing legislation, we always recommend that you use a verified and registered Letting Agency to manage your properties.
What insurances should I have?
You have two elements to cover: 1. The Building; 2. The contents you own within that building. In our area of expertise, Glasgow, most apartments and flats have building insurance provided by the Factor (Building Management company). You could also consider rent guarantee insurance or, indeed, select a Letting Agency which provides this for you.
What about tax?
As with all tax questions, the answer depends on your own personal circumstances. See our Property Tax article here for a full summary of the relavant taxation areas.
What kind of mortgage should I get?
Like tax, your mortgage options depend on your circumstances, whether you’re investing as an individual or company and even the property itself. Have a look at our Property Finance section to see some options and guidelines. We can also connect you with our lending experts.
What if the tenant doesn't pay their rent?
Non-payment of rent within our investment recommendations is thankfully rare. However, a tenant has to be in multiple arrears before any evistion order can be applied for so you need to ensure any lendings are covered within this period. Alternatively, you could consider a landlord insurance policy with rent guarantees (See Q5: Insurance).
What is Capital Growth?
Capital Growth is how much your property value has increased by since you bought it.
What should I expect in terms of growth?
No-one can predict the future so be wary of companies which guarantee Capital Growth. However, you can use stats to forecast potential growth. Glasgow property currently grows at an average pf 5% per annum. Out clients’ properties have grown by an average of 9% pa since they first invested with us.
What does the term "Yield" mean?
Yield often gets used for different areas but typically, this is the return you get each year versus the amount you invested. Eg. £800pm rent on £120,000 investment is a yield of 8%.
What is a ‘good’ rental yield?
The key question is what is your money yielding right now? Our average yield is 7.58% and we guarantee to find you a property that yields at a minimum of 6%.
Interest only or repayment mortgage?
Most buy to let mortgages are interest only, which means your monthly repayments just cover the interest owed and the amount you borrowed will not go down.
What is an Additional Dwelling Supplement?
Introduced on 1 April 2016, a 3% levy is due in tax on the purchase of additional dwellings in Scotland, such as buy-to-let properties and second homes.