Investment strategies
Rental portfolio growth
What strategies are employed to maximize growth, returns or profits?
Borrowing based strategy
Two major factors will limit the amount you can borrow on a buy to let property and determine the best interest rate you can borrow with, these are; the Loan to Value (LTV) and the monthly rental income as a percentage of the monthly mortgage repayment. If you have limited capital and your goal is to grow a large portfolio of properties capable of providing capital growth as well as monthly income, you will need to borrow as much as you are able to in order to continue growing.
Here’s a strategy many successful investors have used:
By adding value to a property and then having it revalued, you will often be in a position to borrow more money against the property than it has cost you to get to that stage. For example with a £10k deposit and a 90% LTV mortgage on a property bought for £100k; after renovations costing £10k the property is now valued at £140k and a 90% LTV re-mortgage now gives you £126k. From which, £90k pays the original mortgage, £20k covers your original deposit and the cost of renovations, leaving you with £16k as a deposit on the next property to repeat the process. In this way you can grow a portfolio very quickly, but it takes diligent research and experience to consistently choose the right properties with the most potential for cost effective improvements. This is where the advice of a Property Investment specialist can make all the difference.
Portfolio growth without borrowing
Another simple strategy to increase the size of your portfolio is to alternate buying properties for rental income and buying properties to renovate and re-sell. For example, with a £50k start up capital, purchase a rental property for £20k, then use the rental income to renovate a second property costing £30k with the goal of selling it for £50k after a year of making improvements. Once sold, you end up with the £50k you started with but now you have a rental property owned in full. Repeat this process, once a year for 10 years and you could be sitting on properties worth between £250-500k without mortgages, generating £4-5k a month in rents, all in 10 years, starting out from just £50k.
You can see why investing in property is so appealing to people who want to boost their retirement income or put their savings to work, earning fantastic returns. The key to success lies in choosing the right property to invest in and this requires hours of research in to market values, rental demands and planned renovation costs and feasibility. It may require knowledge of planning permission procedures and council regulations. You also need to know how to save money on expenses at every step of the way; in order to maximize your profits you need to keep your costs to a minimum. My expertise will give you every advantage possible throughout the whole process.
What can I do for you?
You can see why investing in property is so appealing to people who want to boost their retirement income or put their savings to work, earning fantastic returns. The key to success lies in choosing the right property to invest in and this requires hours of research in to market values, rental demands and planned renovation costs and feasibility. It may require knowledge of planning permission procedures and council regulations. You also need to know how to save money on expenses at every step of the way; in order to maximize your profits you need to keep your costs to a minimum. My expertise will give you every advantage possible throughout the whole process.
Buying to Sell – Maximum capital growth short term
Perhaps you don’t want to get involved with tenants and you want to make money from property simply by buying, adding value and then selling. This is quite achievable if you start with the right property at the right price. This type of property is often known as being “Below Market Value”. Investing in “Below Market Value” properties is a good way for you to maximize a return on your investment and grow your capital as quickly as possible. It is also very low risk as long as the property is fully structurally surveyed before completing the purchase to avoid any unexpected problems. The usual type of Below Market Value property is one that’s in some way distressed. This could be in need of full re-decoration and modernizing or it could mean the property needs more serious remedial work, for example repairs to the roof or to correct damp issues. The key here is; minimize the cost of making the right improvements which still make a significant impact on the property’s market value. You can often find these properties at auction but don’t be tempted to purchase in a hurry without the security of having a surveyors report carried out. A structural surveyor should always be used if any potential building work is highlighted by the initial report. I can help you arrange these inspections reports with my certified and trusted contacts. Another popular way of adding value to a property is by adding an extension. In the UK there are permitted development rights which means it is often easy to add an extension to a property or add additional living space by converting the loft with a dormer extension. You need to be sure that the planned extension is going to add the value you expect to the property and appeal to the buyers you are looking for. Of course, sticking to the budget is critical too. Taking a large property and splitting it into multiple flats can also be a very effective way of making a fast profit or adding considerable value. Purchasing development land and seeking planning permission for several new builds can also be highly lucrative. These strategies require larger amounts of capital and are not recommended for those just starting out in property development.
Sounds interesting?
I’ll help you find the right property that matches your budget, your strategy, and your long term plan. I will make sure you secure a property that matches your criteria at the best possible price and help you maximize the returns from your new investment. I’m dedicated to delivering investment opportunities that are both high-yield and low risk. To find out more about how I can help you achieve your financial goals use one of the options below: