Buying a property to let can benefit the private landlord in two ways. Firstly, it can provide a stream of income. Secondly, many Buy to Let landlords purchase property because of the potential for long-term accumulation of capital growth. (Any rental income depends on being able to rent out the property and at times when the property is not let the mortgage will still have to be paid).

There are 3 main differences to a "buy to let" mortgages:

  • Rent Potential - the decision as to whether or not a mortgage will be offered is usually based on the rent you will earn as well as your income. In some cases your income is not considered.
  • Interest Rate - buy to let mortgages have slightly higher interest rates.
  • Larger Deposit - typically a minimum of 15% of the property's value is required as a deposit.

When you manage a property there are many costs involved in addition to the monthly mortgage repayments. As a guide, you should be aiming to achieve a gross rent of about 130% of the rental property's mortgage repayments (interest only).

There are a number of tax issues that need to be looked at in order to maximise your tax position, such as being able to offset your maintenance costs, letting agent fees etc as well as any interest paid on a buy to let mortgage against your tax.

Gloucester Mortgage Centre has a panel of mortgage lenders offering a wide range of products catering for both first-time and professional landlords. If you are looking for finance or some professional advice, contact us today.

For further information, simply contact Gloucester Mortgage Centre
by telephone , by online enquiry or by email

If you are unable to rent the property you will still be liable for the mortgage payments.