The cardinal rules of growing your property portfolio

Your buy-to-let portfolio comprises a number of properties, and the success you have achieved so far is testament to your ability to read the market and skilfully manage your assets. Now, with your current properties generating positive returns, you are looking to channel some of that capital into growing your portfolio.

However, in your quest to expand, it’s important not to lose sight of the cardinal rules of successful property investment, which include:

  1. Buying at the right time
    You might be eager to purchase another property, but timing is everything if you want to yield the highest return on your investment. The market is cyclical; you need to purchase when properties are low in value but showing signs of increasing.

    Try to avoid buying during a peak of a property boom, as it could be a long wait before you start seeing favourable returns.
  2. Delegating tasks
    Naturally, as your portfolio grows, you will need to dedicate more time to management tasks, from filling out paperwork to arranging property maintenance and dealing with tenants. If you have a full-time job, these demands may prove too much; at which stage, you should consider delegating certain elements of your portfolio to an agency.

    Using an agency costs, but it does limit the chance of management tasks slipping through the net and landing you in hot water. Nevertheless, you need to make sure the agency you entrust with managing your portfolio is both dependable and professional, as any mistake they make could reflect badly on you.
  3. Getting quality insurance through a broker
    When managing multiple properties, it can be wise to combine insurance policies and handle your portfolio as a single asset. Not only will doing this save you money, but it will give you access to more comprehensive cover options.

    To ensure you get the right level of cover for the best possible price, you should seek help from an experienced, reputable broker with a deep understanding of the insurance market. They will be able to search their database of UK insurers to find you tailored portfolio insurance that best suits your individual requirements.
  4. Play the long game
    You need to be prepared to sit tight on your properties to reap the best long-term profits; at the very least, one property market cycle.

    This means you shouldn’t get too hung up about short-term weaknesses in property values; the market fluctuates and is bound to recover. Don’t make the mistake of panic selling when prices plummet, or you could lose a significant amount of money.
  5. Treat your tenants well
    High tenant turnover is arguably one of the biggest drains on profitability for landlords. But, this can be easily prevented by giving your tenants one thing: respect.

    Treat your tenants well, and they are likely to treat you – and your property – well in return. Keep your promises, be polite, ensure your properties are well maintained, and deal with their queries as fast and efficiently as possible.

    If you treat your tenants well, not only are they likely to rent from you for a longer period of time, but they will also be more understanding when it comes to things like rent increases.

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Plan for all eventualities

It’s all plain sailing for now, but your individual circumstances can change at the drop of a hat, so it’s important to prepare for all eventualities.

What would happen if you or a close family member fell ill? What if there’s another recession? You need to consider all possible risks, and create a plan that you can action if something unexpected were to happen.

It’s a good idea to have some money set aside in an emergency fund. It can be tempting to over-accelerate portfolio growth by channelling all money raised into buying additional properties; but you shouldn’t do this if it means emptying your bank accounts. Without a rainy day fund, you may be forced to sell in a weak market and could potentially lose thousands of pounds.

With the basics of property investment covered, you will be able to confidently grow your portfolio and enjoy higher returns as a result. Just don’t forget to protect your property and money by taking out quality portfolio insurance. Stride are the experts with decades of experience in this field – why not talk to us today?

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