Buy to let for diversification ?

[shortbread12]

Me and my partner have invested in S&S Isa and good amount in pension. We have some cash left that we can save for a BTL deposit or invest in GIA or max out our pension. Since we already have a good amount in equities, wondering if it will be good to invest in BTL for diversification. We would like to be good landlords as we have rented for many many years in our life.

Got the following questions on BTL

1. I hear a lot of negative views about BTL, so wondering if it’s a good option really ? (considering we have invested heavily in stock market already)
2. We are on 40% tax bracket, so BTL via limited company may be more beneficial for tax reasons. But the mortgage for limited company has eyewatering amount of product fees like 5% , 7% as far as I have seen. How will anyone be able to pay such huge amount in product fees alone ? I am not sure if I am missing something. If anyone doing BTL via limited company, if you share your insights that will be super helpful.

Thanks :)

With mortgage rates as they are and the recent changes to tax on rental income, I think it's very hard to make BTL profitable if you have to borrow money. If you can buy a property outright it's a different matter. Or if you're a large landlord with dozens or even hundreds of properties. Many small landlords are selling up for this exact reason. Of course it varies hugely depending on where you are in the country, the amount you would need to borrow etc. You'll need to sit down and do all the boring sums, including letting fees, landlords insurance, the cost of things like gas certificates, renovations and maintenance, and allowing 2 months unoccupied each year as a worst case scenario.

Thanks @laclochette We are planning to buy in outer london for around 450k.

Good point, I will do the calculation including insurance etc.

If we hold it without limited company, the tax will eat away most of the profit leaving us to pay from out pockets. It makes more sense for us to do via limited company but the high product fees is off-putting