DON’T LISTEN TO THE PROPERTY NEWS. YOU CAN STILL MAKE MONEY FROM BUYING HOUSES

1 03 2017

belvoirletProperty news over the last few months has been dominated by stories heralding the death of buy-to-let. The whole concept of buying a second (or third, or fourth) property and renting it out to provide a supplementary income or a nest egg for retirement was, said the press, an antiquated model that no longer made sense.

While such stories may not be dominating the press at present (though I don’t doubt most of us wish they were – we’ll take a bit of landlord bashing over the insanity the world finds itself in at the moment) the view that buy-to-let is over still stands. So should we believe it? Is property investment over? The polite side of me would put it this way: don’t believe everything you read in the paper. The other side? It’s a load of rubbish.

Investing in property may have become a little more complex, with changes to tax relief rules and increases in Stamp Duty Land Tax now in play but property remains the safest form of investment and it is absolutely still possible to prosper from it.

Know your starting point

It sounds obvious but before you even think about viewing investment properties you need to get to grips with the funds available to you. Do you have money in ISAs or savings? If you don’t have a standard savings pot look at other options. You may have equity in your home and have not realised it, remortgaging could free up this cash. With mortgage rates still pretty low now would be a good time to do so. Be clear on your starting point and the funds available to you.

Be clear about what you want to get from this

Buy-to-let is not over; buy-to-let as a get-rich-quick scheme is, for the time being at least. When property prices were soaring it was easy to buy a property, rent it out for a couple of years and sell at a huge profit. The economic crash put a stop to all that. But if you’re in it for the long term buy-to-let can be hugely lucrative. Decide what your plan for the property is and think about your reason for getting involved in property investment. Set your goals. If you want to be successful, you need to have a clear goal in mind.

Use your goals to help you form a strategy

Once you know what you want from your property devise a strategy to achieve that. There are lots of ways to make your investment go further – Houses in Multiple Occupation (at least three tenants forming more than one household), conversions, property funds etc. By understanding your long-term goals, you can build a strategy around this. If the idea is to add an extra income each month a HMO can be very profitable – however managing a HMO takes time and effort. If your reason for getting into property investment is to reduce your work hours and spend more time with the family, spending all your time looking after tenants in a HMO counteracts that.

Work with experts

This is crucial. Many things can and do go wrong in property purchases and the best way to safeguard yourself is to use trusted experts. Find a mortgage broker who specialises in buy-to-let rather than one who dabbles in it from time to time. Use a solicitor who’s used to property investors. Research your experts well. Check reviews and speak to other investors.

Get to understand how property works

It’s a massive misconception that the sale of a property is the key to making a profit. The profits are made in the buying rather than the selling. Buy well. Remember, one of the great things about property is that prices aren’t fixed. You can’t negotiate on rate of ISAs or share prices, but you can on property. And that negotiation is crucial. Once you’ve completed steps one to four, you’ve built your team and have your strategy in place – then you need to get the best deal possible.

Email Us:
Stoke-On-Trent@BelvoirLettings.com

or Call us on 01782 478444 for advice on #buytolet 

 

Written by Rob Bence, co-founder and co-presenter of The Property Hub..

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