2022 saw the highest proportion of property sales to investors since 2016, with landlords accounting for 12.2% of the market. Surprised? Well, it’s not so unbelievable when you look at what’s happening.
Many existing landlords are taking the opportunity to expand their portfolios again, and if you’re reading this blog, you could be thinking that 2023 is the year you begin your buy-to-let journey. But where do you start?
Well, there’s plenty to learn, from raising the money to having the right people around you, avoiding classic mistakes and picking the perfect rental property. But don’t worry: we’re sharing everything you need right here to build a portfolio of your first five rental homes, and beyond!
Building a successful buy-to-let portfolio isn’t a get-rich-quick scheme, but it is a reliable way to build personal and generational wealth (as a look at any rich list will tell you).
To start and stay on track, it’s essential to have a vision that pulls you forward, whether it’s early retirement, financial security for your family, or a cliff-top house with a Porsche parked outside. Here are some tips to start you off:
As with any new business, some things won’t necessarily go to plan, so clearly displaying your goals will help you deal with any bumps in the road and keep your vision alive.
There’s no escaping the fact that you’ll need money to buy your first rental property, but cash flow is also critical to the success of any business. Try these tips for getting started and staying solvent:
It’s also worth remembering that setting up a limited company to buy your rental properties has some advantages around mortgage interest relief, income tax and capital gains tax, so talk to an accountant first to make sure you choose the best strategy.
Starting out as a landlord is definitely an education, and you can smooth out the learning curve by specialising in one marketplace - at least for now. Here are some tips for finding your niche :
The simplest way to success is to offer tenants what they want, and need - families look for things like good schools, easy parking and durable fittings, while sharers love contemporary design, cool cafes and rapid transport.
Speak to local letting agents about what’s in demand so you can provide homes that are popular and profitable.
In the words of Richard Branson: “Success comes from delegating and having a good team!” It’s the same in any business, and you’ll run yourself ragged if you try to do everything yourself, so it pays to surround yourself with reliable people.
There are many different aspects to owning rental homes, and you’ll need as a minimum:
A good managing agent will have a circle of proven and trustworthy contractors who can ensure your buy-to-let and tenant are looked after properly, leaving you free to concentrate on finding your next property or simply enjoying life.
After you’ve rented out your first buy-to-let, it’s time to sit and review all the ups and downs of your journey so far. This will help you grow your skills, learn from mistakes or lucky breaks, and use your experience when buying your next property. But how do you get the money for the next deposit?
You’re really not limited by the equity in your first buy-to-let to get started on your next, but make sure you carry out due diligence on anyone you go into business with. Protect yourself with a contract drafted by a solicitor to use as a ready-made template for partnerships as you build your empire.
Are you ready to start or grow your lettings portfolio?
We’ve helped many new and experienced landlords build highly popular, profitable and sustainable lettings portfolios, and we’d love to help you do the same.
Drop us a line on email@example.com or call us on 01722 580059 for a friendly chat about the rental market in the Wilton & Salisbury area; then let’s start creating a successful buy-to-let business for your future.
Sign up to our monthly newsletter and get insights straight into your inbox.