Investing in properties can bring great rewards when done successfully. One of the trickiest aspects of doing so is growing your portfolio and ensuring you maximise profitability. The following tips should help you to get an idea of what you can do to get the most from your investment.
Every good portfolio starts with a single property. Getting the first one right is important and should set the tone for your other investments. The best thing to do when starting out is to choose a local area you know well, keep your investment small and find experienced people to help you along the way. As we specialise in all aspects of investment properties in Brent and throughout the rest of London, we can help you to make the right choices and optimise your chances of success, opening up more opportunities for investments. If you get the first steps right you’ll have a stronger foundation when it comes to expanding.
With all investments, the same philosophy holds true if you want to be profitable; you need to buy when the price is low and sell when it is higher. Negotiating is an important part of the buying process but you should always keep in mind that you can take your money elsewhere if the seller is particularly stubborn.
Many people buy properties with the aim to develop them but this requires a great deal more investment and carries more risk. If you want to grow your portfolio fast you should choose houses that are ready to rent or those that can be made ready quickly. Keeping a positive cash flow is very important if you want good growth and the best way to do this is to ensure your rental fees will cover your mortgage payments and other fees.
Spotting development opportunities is a good idea and could unlock some fantastic returns. If you can purchase a property vastly below market value, get it up to standard quickly and have it back on the market your profit can be very healthy. Try looking at properties for what they can be when you think about developing.
Timing purchases is always very important, particularly if you want the best returns. You’ll need to keep an eye on the market, look at which areas are growing and get the timing perfect. Try to avoid buying properties when the market is booming because you can struggle to find quick profit. You can also earn savings by buying at certain times of the year.
One thing you should never do with your portfolio is resort to cross-collateralisation. Securing a loan or mortgage against more than one property is never wise and can leave you needing to sell multiple houses if you fall behind with any payments. Try to secure finance with a single property.
Building a portfolio is always a case of continuously watching the market and seeing what becomes available. This can be tough to do on a day to day basis, especially if you have other obligations. Relying on an advisor to do this for you can save you a great deal of time, as well as the hassle and stress of searching.
Working closer with brokers is also a really good idea, especially if you need to quickly arrange mortgages on the new properties you buy. When it comes to financing these people are your main allies.
When growing a portfolio it is always wise to make sure you don’t reach too far and let down your existing tenants. A happy tenant base is key to continued rental incomes and your profitability. Remember current residents could even be the source of interest in your other properties, particularly if they give you good feedback and promote your service.