Property is proven to be an extremely lucrative investment asset and can offer exceptional long-term return on investment, but being a landlord is a huge responsibility and comes with it’s own challenges. It’s not all plain sailing, guaranteed returns, and easy tenants. There are many factors you ought to take into account before you take the dive into the world of buy-to-let. With good planning, the right strategy and trusted partners to help you along the way, you can pave the way to investment success. Here are just some of the questions you should ask yourself before you start to build your portfolio…

Do you have the time?

If you are choosing to embark on a property investment journey, it is vital that you understand that being a landlord can be far more hands-on than initially anticipated. Balancing the duties of securing a tenant, remaining compliant and keeping on top of maintenance issues is more time consuming than you may think. Many landlords work regular jobs whilst also managing a portfolio of properties, with the Guild of Residential Landlords suggesting that 3 in 10 landlords work a regular 9-5 job alongside running their property business. This means that when things go awry in your buy-to-let properties, this can impact your job and family life.  This is why many landlords choose to enlist the help of agencies such as Centrick to stay on top of the day-to-day running of their properties. Experienced agents have the most up-to-date compliance information, can handle the tenant searching process, and manage maintenance issues through their own in-house systems. This is a fantastic option for new landlords, or those who may struggle to find the time to manage the minutiae of their portfolio.

Do you have the funds?

Purchasing a buy-to-let property is not cheap - fees and interest rates tend to be far higher than regular mortgages, and the minimum deposit typically sits at 25% of the property’s agreed price. This can make both the upfront and running costs of a buy-to-let portfolio quite expensive, so it is vital that you do your due diligence by researching area growth and projected yields to increase your chances of making a worthwhile return on your investment.  The same should be considered for managing the monthly costs of your buy-to-let business.  Studies show that 40% of landlords have received rental payments late as a result of payment complications, financial difficulties, or something else. This is a huge reason why many landlords use rent guarantees to stay afloat in case rent cannot be paid promptly. Furthermore, running costs such as service charges and ground rent, as well as the potential for void periods, ought to be considered. Once again, enlisting the help of a knowledgeable local agent can help you plan an investment strategy that suits your finances, whilst also pinpointing the most viable investments for you in terms of cost and projected returns. A mortgage advisor may also be able to help you to leverage your existing investments to free up any equity you have available and reduce the funds you’ll need to raise to grow your portfolio.

Are you choosing the right locations?

Location is paramount to landlord success. Different postcodes and areas come with different rental yields, potential selective licensing measures, and appealing amenities that should be considered before you delve into the world of buy-to-let investment.  If you want to manage your units in person, and meet your tenants, you’ll need to purchase units close to where you live already. If you want to rent to families, you ought to research good schools and determine whether your investments are in key catchment areas. If you are hoping to invest in HMO’s or student lets, you should look into nearby higher education institutions. 

Is property the best investment?

Although property is widely regarded as the most stable form of investment with the value of property doubling on average every 10-15 years, it is important to consider that there are other ways to invest such as via stocks, shares, bonds, commodities. Although these options tend to be less stable than the property market, they could be good options if you have less money to invest upfront. Many savvy investors diversify their investments by selecting an array of investment asset classes, having property investments as well as stocks and shares. 

Do you have the right support?

Navigating the buy-to-let property market on your own can be a daunting process, especially for new landlords. This is why it is vital to enlist the right support before you embark on your investment journey - be sure to discuss your plans with an investment professional or financial advisor, and contact local reputable letting agents to discuss the management packages they have available. Having a strong partnership with your letting agent will make your buy-to-let experience far easier, whether you’re a new or experienced investor. They can carry out the time-consuming jobs of sourcing tenants, executing right to rent checks, and answering tenant queries. What’s more, if your tenants require help fixing maintenance issues, or new compliance regulations come into play, your letting agent will be able to handle these tasks on your behalf. Here at Centrick, we have been managing buy-to-let portfolios for over fifteen years, maximising returns and taking the stress out of day-to-day life for landlords. We understand that investing in property is a huge leap, and being a responsible landlord is a massive responsibility, which is why we offer a range of tenancy management packages to help landlords across the country handle their portfolio their way. Get in touch with Centrick below to explore how we can streamline your road to landlord success and eliminate stress with our comprehensive tenancy management services.