For some investors, there may be a temptation to eschew the buy-to-let market in the UK, with this sector having begun to run out of steam at the end of 2016.
At this time, the government implemented debilitating changes to how buy-to-let landlords were taxed in the UK, whilst removing the option to deduct mortage interest from letting income and restricting provisions for wear and tear on properties. This undoubtedly hit the market hard, whilst encouraging some landlords to cut their losses in the UK.
Despite this, however, there remains ample opportunity for individuals to manage a successful rental property sector and leverage the UK market to their advantage. So, here are three tips to help you grow your rental property business quickly and efficiently.
1. Start by Identifying your Target Markets
When you buy a home to live in, you’re encouraged to research the area thoroughly so that you can appraise its transport links, local amenities, and (in some instances) the quality of the surrounding schools.
Investors don’t always adopt the same approach when purchasing buy-to-let homes, however, creating a scenario where they struggle to engage potential buyers and undermine the value that exists in the property.
After all, economic factors such as jobs and median income can all affect your rental property price, whilst also impacting the delicate balance that exists between supply and demand.
So, be sure to research the areas in which you buy and identify your target markets, so that you can optimise your profit and achieve the best possible ROI on your spend.
2. Minimise Operating Costs
If you’re going to develop a successful and ultimately profitable rental property business, it’s important that you focus on reducing operating costs as well as setting the correct rental prices.
This type of understanding helps you to distinguish between gross and net yields, as it’s the latter that ultimately separates successful from failed real estate ventures.
Make no mistake; there are numerous operating costs to consider as a landlord, from capital expenditure and vacancy to landlord insurance that safeguards the structure of your property in the event of fire or damage.
By identifying these costs, you can then create practical strategies that reduce these and boost your margins over time.
3. Find a Reliable Financing Partner
On a similar note, it’s crucial that you find a reliable financing partner who can help you to expand and scale your property business within a relatively short space of time.
Leverage affords you the best chance of achieving this objective, whilst this also enables you to explore a world beyond banks and instead target private lenders who can partner with your business and provide some much-needed expertise.
This way, you can secure help during both the acquisition phases and the long-term hold period, whilst accessing a reliable source of credit over a sustained period of time.
This can provide genuine peace of mind, whilst enabling you to capitalise on real-time market opportunities as they unfold!
