Sarah would like to build her property portfolio but is in need of mortgage help.
She currently has 3 buy-to-let properties but would like to expand her portfolio to obtain around 25 lower-end properties within a 3-year period, with a key focus on yield in order to be able to gain an annual income from these rental properties with around a 10% return.
From an initial Zoom call with Sarah, we were able to establish her aims and understand what savings she currently has. Our modern approach to mortgage advice allows us to interact solely by phone, video conferencing, secure link, and email, thereby removing unnecessary face-to-face appointments.
Very understandably, Sarah is nervous about this venture as she knows there can be difficulties in finding a lender for a mortgage when you already have a few.
The solution
The solution to Sarah’s issue is to become a portfolio landlord. This is someone with four or more mortgaged properties all under one loan, easing the chaos of managing multiple buy-to-lets.
Here at The Mortgage Brokerage, we have access to the whole of the market, and, in turn, exclusive deals that Sarah would not be able to access if she were to contact lenders herself.
Sarah will also be supported by our trusted advisors who will deal with lenders, estate agents and solicitors along the way, including stress tests. This is a specialist affordability check for borrowers to ensure they are not taking on too much risk.
Our whole-market approach allows us to take the stress away by knowing exactly how each lender will apply the guidelines of their stress tests.
Benefits of becoming a portfolio landlord
- Becoming a portfolio landlord will allow Sarah to solely focus on a single mortgage payment each month to a single lender, allowing for her finances to be managed with increased clarity.
- Sarah will become more tax efficient operating as a portfolio landlord as she will be taxed on funds that are withdrawn as a whole rather than individually.
Risks of becoming a portfolio landlord
- A key risk for Sarah will be the failure to secure tenants, therefore leaving her without rental payments. For this reason, a period of rental void should always be factored into investment projections.
- Another risk is the unlikely event that all properties require maintenance at the same time, such as necessary boiler repairs. This is why it is important to assess savings prior to becoming a portfolio landlord – we strongly advise always having some rainy-day savings!
A portfolio mortgage is a niche mortgage. Our whole market access allows us to provide specialist-tailored information, which is good news for Sarah!
Are you a landlord juggling multiple properties yet looking to add more? A portfolio mortgage can give you a new outlook on how you manage your loans.
Get in touch to find out more about your chances of becoming a portfolio landlord today.
