While the idea of buying, owning and letting several properties can be daunting, it’s a practical and economically sound way of investing your money in something that will provide great long-term returns.
As the ongoing Covid-19 pandemic provides some unique opportunities in the UK property market, now might be the time to act and build up your rental portfolio with UK property to create several new income streams for yourself.
Here are 8 tips to help you build your UK rental portfolio.
Set your goals
Like most new endeavours and investments, building a property portfolio will require a fair amount of planning and consideration. Before you rush in with an offer stop and ask yourself some important questions like: what are my long-term goals for this purchase? How much do I know about buy-to-let properties in the UK? Am I more interested in the residential or commercial space? Do I want regular rental income on this property or a lump sum when I sell it all together? How hands-on do I want to be with the property, or do I require third party assistance?
2. Check your wallet
Budget is everything, and before you sign on to a big financial commitment, it’s important to evaluate your limits. Do your research on factors like location, size, upkeep and rental demand and how they’ll impact your return-on-investment, and familiarise yourself with UK buy-to-let mortgages and investment payment plans, while remembering to factor in mortgage payments when planning your new tenant’s rental budget.
3. Expect the unexpected
When buying a new property, there will inevitably be expenses you didn’t initially budget for. Think of repairs and upkeep and be prepared for the cost of the property valuation and surveyors, estate agents or lawyers who are needed to complete the property sale or rental process as well as, of course, your mortgage repayments.
4. Don’t forget about stamp duty
Stamp Duty Land Tax is a UK property tax paid by someone who purchases property or land in England or Northern Ireland and is based on the sum paid for the property or land. Usually, buy-to-let buyers are required to pay tax of 3% on properties worth up to £125,000, and 5% on a property priced between £125,000 and £250,000, but due to the current stamp duty holiday the threshold has been increased, and buyers are only required to pay 3% tax on properties with a value of £500,000 or more. This makes now the perfect time to start building a property portfolio in the UK, but the stamp duty holiday will end in March 2021, so buyers will need to act fast to fall within the deadline.
5. Diversify as you grow your investments
As your property portfolio grows, try and explore a number of different investments by exploring student, rental and commercial properties, as well as different areas of the UK, if that would suit your long-term goals.
6. Be a good landlord
Remember you need tenants in order to actually get a return-on-investment from your properties, and if you find good tenants it is in your best interest to try and keep them happy so they stay longer and don’t leave you with the hassle of consistently having to fill the space. If you aren’t able to assist them with their everyday needs, there are plenty of rental agent and management company options that could assist you.
7. Treat it like a second job
As with any new business opportunity, building your portfolio will require commitment and consistency, whether you are hands-on in the letting of your property or enlisting the help of a third party. As you settle into your long-term goals with the property you’ll be able to determine how hands-on you’d like to be, or whether you’d like to spend your time exploring new investments.
8. Ask the professionals
The above-mentioned process can be daunting and complicated, particularly if you’re new to the property game or perhaps not based in the UK yourself. Tailor My Property has access to a wide range of investment opportunities and a network of Mortgage lenders, lettings and management companies and tax advisors to assist with every facet of building your portfolio.
Get in touch today to inquire about our services and network of experts.