Getting advice from our accountant on whether or not buy to lets are a sensible or profitable thing to do. Hopefully they are both.
what does our accountant think about buy to let?
We identified our accountant as one of the people who can help us figure this out. We’re fortunate in that we’ve got a great working relationship with him and his team. We set up a call to get his input.
preparing for the call
To prepare for the call, we made a list of the things that were worrying us. This included what we’d learned about stamp duty and our worry that tax was going to eat into our profits.
what we talked about
Turns out he has a buy to let specialist in his team. We were able to talk to him too. They talked us through a lot of the things that we’d learned for ourselves. It was great that they confirmed that our guestimate calculations were being done in the right way.
So with agreement that we were heading in the right direction with our thinking, both of them were broadly supportive of buy to lets as a form of investment.
The conversation turned to whether or not this is a side hustle or a full time job. We confirmed that at this stage, it is definitely a side hustle. But that it’s going to take a lot of our time to get it going.
next steps
They also suggested that we do research into owning and managing buy to let properties as a Limited Company. Limited companies pay different taxes and stamp duty is calculated differently for companies too.
This will make the gross yield, net yield and ROI numbers different. It will also change the number of mortgages we’ll have access to and the interest rates of those mortgages. It’s possible that we’ll need a mortgage broker to help us with that.
While it was great to hear that we’re on the right track, the idea of doing it as a limited company definitely gave us more homework to do. The next piece of research is going to have to be to check-out what the similarities and differences are.