3. Start your portfolio with one property
It’s probably best to start small with your property portfolio and then expand. Make sure your first investment is a low-risk one. You might want to pick a property that requires little renovation and is close to where you live so that you can easily deal with any maintenance issues. Once your first property is making a good return, you can consider buying more.
4. Don’t wait for things to be perfect
Once your sole property is turning over a good return, you may be ready to expand your portfolio. When you buy your next property or properties, you might want to consider specialising in one particular property type. This can give you a head start when seeking further investments to put your money into. Building your knowledge of a specific property type will make you more comfortable in your investments.
5. Manage your finances
Whether you’ve chosen to let your property or simply hold on to it to sell in future, it’s a good idea to always keep some money aside as an emergency fund for any repairs, replacements or any other property-related costs that may come up.
6. Be selective with tenants and look after them
If you’ve chosen to let out your property, be selective with who you choose as your tenants and screen them accordingly. By maintaining regular and open communication with them throughout their tenancy, you build trust, which can help prevent any future disagreements from escalating to potentially costly legal disputes. Read our blog on the top 7 expert tips for landlords to mitigate your risk.
Professional letting agents, like us, can help you find the right tenant for your property and also help you manage the relationship with them.
7. Expand your portfolio cautiously
As with your first property investment, we recommend expanding your portfolio step-by-step. Take measured actions and ensure your finances are in a good place before making your next investment, as this will help minimise any risk associated with your property investments.
Speak to a financial adviser to help you determine what you can afford – remember there will be additional costs such as insurance, tax and stamp duty to consider.
8. Have a long-term plan
Lastly, but certainly not least, have a long-term plan and keep your goal in mind. This will help you remain on track and not get carried away by hasty decision-making or rash investment choices. To ensure that your plans are successful, take advantage of the services that lettings agents offer to help you stay informed of current market trends and any changes in regulations.
How do I fund a property portfolio?
When expanding your property portfolio, financing plays a crucial role in facilitating growth. Consider leveraging the equity in your existing properties, using your savings, and exploring buy-to-let mortgages to fund your growing portfolio, as well as considering your insurance options.
What type of property is most profitable?
Again, this depends on the types of returns you are aiming for. Jennifer Yeates, Area Manager for Lettings at Countrywide, confirms that “it’s not an easy question to answer. The financial benefit of a property will depend on several factors, such as its location, types of tenants (if you’re letting it), the type of property and the length of time you own it. For example, student lets and Houses in Multiple Occupation (HMOs) can return very differently than letting an unfurnished home to a family. You may have additional costs with an HMO that you wouldn’t have for a family home, and vice versa.”
For this reason, we recommend talking to one of our lettings experts, who can offer you more personalised insight. Find your closest branch and stop by or give us a ring.
Is a £20,000 deposit enough to invest in property?
Depending on the property type and location you choose, a £20,000 deposit could be enough to get you started in property investing. Keep in mind that this amount may not offer you much choice as to where you can invest — e.g. properties in highly desirable city locations may not be suitable — however, it could provide you with a good starting point for your property portfolio.
Building a property portfolio can be a rewarding investment strategy when approached with careful planning and research. By setting clear goals, starting small, managing finances prudently, and expanding cautiously, investors can create a robust portfolio. Remember to stay informed about market trends and seek expert advice when needed. So whether you’re considering growing your property portfolio or simply want to know what’s happening in the property market, we’d love to chat. Find your local branch here.
And, if you already have a property you’d like to let, the first step is checking what rent your property could generate.
