I attend many property networks, and some investors are doing some really crazy and innovative property investment techniques. This ranges from converting commercial spaces to apartments to creating housing of multiple occupancies to creating Airbnb-style setups. Now, this is all good and well if you really want to grow and scale fast. But it’s a lot of risk. Some of these strategies require a lot of capital, with the lure of possible great cash flow.
Property for me was always about finding a healthy balance between profit and low risk, so Buy-to-let always appeals to me. The cash flow in rentals is quite small, but the true potential is in the capital appreciation. To give you an example of this, in a month, an average cash flow (if you’re fortunate in the current climate) should be about £200 profit per month, with interest rates being high and the acquisition of property being quite high as well, with Buy-to-let. It’s hard to even achieve this, so beware of people who tell you they can give you 10 to 12% returns and investment, especially in this current market. Also factor in mortgage, repairs, insurance, etc., into this equation.
It was one thing when the prices were low before the financial crash of 2008, but we haven’t seen those markets in a long, long time. With a £200 pound plus profit per month in mind after outgoings factored in, you can see you’ll need a lot of properties to get to a level that will supplement your income. Every property requires a big cash injection. This is in the form of a deposit, stamp duty, solicitors’ fees, etc., but Buy-to-let is still the safest and most fundamental rental property type. Completely vanilla, no surprises.
This is what we advocate at My Landlord Cares.
We use Property as an investment vehicle. What I mean by this is that when you put money in the stock market, all financial gurus (the ones that are the most professional and knowledgeable) will tell you to leave it in the market for a long time. Don’t touch it, even with its ups and downs. Likewise, we advocate the same concept in the long term. Your property that you will probably purchase at £100,000 in 2023 will most likely, from previous history, be at £150,000 if not more in 2033. So it’s a capital appreciation that you are banking on now.
I know this slow and steady approach isn’t what many people sign on to when they get into Property. Many who go into Property want quick money and quick cash flow, but it is definitely the least risky way of purchasing properties.
Always balance your risk personality towards your rewards. If you are high-risk, this isn’t the strategy for you.
Long-term Buy-to-let allows someone to create a home and live in that property for the long term. We have had tenants who have been with this for more than a decade and have been amazing. They have called this property their home, and we have built up long-term relationships.
This is what we advocate within the private rented sector, rather than the constant churn of tenants. It’s about finding the right tenants who are willing to call your property their “home”. So if you are debating what kind of property you are going to buy and what you will be searching for, your next deal, then please have a conversation with us. For us, property is a means of a pension pot and will allow you to gain financial independence. If you’re looking for the same, we’re happy to talk to you. Contact us.