Buy-to-Let / Rental Investment - Part two: Is it the Right Time to Expand your Property Portfolio?

1) Is now a good time to extend your property portfolio?  With low interest rates and unpredictability in the stock market, property is an obvious investment.  Property prices are still increasing, so you’re likely to see good capital growth and with rentals exceeding home ownership in London you should receive a good regular income too.

The priority for a buy-to-let investor must still be to find the right property at the right price in the right area (see Buy-to-Let / Rental Investment – Part one).

2) Why should you extend your portfolio?  The more properties you own the wider you spread the cash-flow uncertainty of void periods.  In North West London, properties near Middlesex University and properties close to good transport links at Hendon Central, Colindale and Mill Hill stations are likely to see much shorter void periods as proximity to local transport links, universities, schools and amenities are desirable.

With a large portfolio it becomes easier to see what works best in the rental market and this may lead you to sell under-performing properties. 

3) Funding.  There are a number of buy-to-let mortgages available to investors so we’d recommend spending time with a mortgage advisor to determine what will work best for you.  If the property is financially viable and you’ve obtained a professional opinion on rental values then you’ll stand a good chance of getting a buy-to-let mortgage when you present this to a lender.

You may already have the capital which will give you the upper hand when negotiating; vendors like dealing with cash buyers. 

Another option may be to release money from other properties.  If there’s equity in another property you can re-finance in order to purchase additional properties. 

4) Make sure you have the right approach to when finding a tenant. You need to make sure that the property you purchase will let promptly. If and when you renovate an investment property it’s important that you approach it from a completely neutral perspective. It’s essential that you put your own tastes to one side and think what is likely to appeal to your tenants who may have very different tastes to you.

As a landlord there can often be the temptation of trying to achieve an above market value rental income “testing the waters”, which can prove to be detrimental in the marketing process. We find that if a property is marketed realistically it is much more likely to generate interest when it first goes onto the market and as a result tenants move in much sooner.

We cover Hendon, Colindale, Mill Hill & Finchley – so please do give us a call to discuss how best to approach your property prior to it being tenanted.

5) What is your long-term plan?  Long-term planning and an exit strategy can be the biggest challenges.  Investors need to plan ahead regarding Capital Gains Tax and Inheritance Tax. If there’s no exit strategy and you haven’t looked past collecting the monthly rent, you may get a nasty surprise when you decide to sell your properties.  Get advice now on how to structure your purchases and finances. It will pay off later.  Belvoir work in partnership with Franklyn Financial Management who work to structure long-term plans for investors (click here for a link to their website).

We wish you every success in expanding your portfolio.  If you’d like us to find the right property for you or manage your properties we would be delighted to help.  You can contact us on 020 3875 600 or