With the cost of living constantly on the rise, many landlords are looking to improve their portfolios, to future-proof their investments. Now is the perfect time to make progress and reap the rewards.
Start with what you have
Start by reviewing your current property portfolio. There could be opportunities to raise your capital. In the UK, property prices have risen over 9.8%, meaning the properties you already own, may have risen in value. You may want to look into remortgaging.
How are you investing?
Currently, a lot of investors are moving away from owning their properties exclusively. Now could be a good time to consider owning your properties via a Limited Company. By using a Limited Company, you could gain significant tax advantages. When you solely own property, any money you make from renting, is added to your other earnings, whatever they may be, and taxed as income. However, any money made from a Limited Company Buy To Let Mortgage, is taxed at the current rate of corporation tax, which at the time of writing, is significantly lower. So the money you save can be used elsewhere…
Add value to your current properties
A simple way to improve your portfolio is to add value. You can do this by making simple changes, such as adding extensions, giving it a fresh lick of paint, or renovating the garden. Or you could opt for more drastic changes, such as renovating an attic or basement, to add extra square feet to the property. Although making any conversions will mean you’ll lose some cash upfront, you’ll add long-term value and are sure to see a good return on your investments.
Consider how you’re renting
If you currently rent housing with several rooms, but are only renting to one individual, it’s possible to improve your returns, by changing it to a multiple house occupancy. Depending on the area of the property, looking for young professionals, is a good investment strategy. If your portfolio includes inner-city properties, renting to multiple professional tenants, could be a good move.
Consider new places
If you’re looking into acquiring new properties to improve your portfolio, it can be tempting to look at places where the value is high, such as London. However, by considering cheaper regions, you will be able to find more low-cost properties, and these will offer you a high rental yield. So leave the hot spots behind, and consider areas, such as Hull or Bradford. Here you’ll be able to secure new properties at lower prices, while the cost of renting doesn’t differ substantially. This means you’ll see quick returns.
Think long-term
Improving your portfolio, is not something that happens overnight – it could take time to see the fruits of your labour. Be patient and have a long-term plan. Although the rental market changes rapidly, and your plan may need to be updated as time goes on, it’s always helpful to have a goal in mind, so you can make sensible investment decisions, and continue to see your portfolio grow.