How to build a property portfolio and benefit from BTL rentals

To be a successful investor, think like an investor

I'm often asked how I achieved the success as a property investor. People assume that I am some sort of whizz-kid with a natural flair for picking the right properties for capital gains and rental income. They assume that I was somehow born with the know-how to build a property portfolio.

The truth is that the best buy-to-let landlords and property investment gurus worked hard at getting where they are today. Being able to buy the best rental properties and make life-changing income is within your grasp, too.

In this post, I’m going to give you six tips on how to think like a property investor. If you can get into this mindset, then you’ll be well on the road to success in residential property.

Tip 1: Take the emotions out of every decision

When you buy a home, you do so because you fall in love with the place. You walk in, and it just feels right. If you want to build a property portfolio, you can’t afford to fall in love with a single property. Remember that an investment property is simply a box that makes you money.

Tip 2: Know your objectives

Building a profitable BTL rentals portfolio is a bit like making a cake. You’ve got to know what cake you want before you bake it. Otherwise, you’ll never get the right ingredients. Do you want a wedding cake? You’ll need fruit and lashings of smooth icing. Do you want a Victoria sponge? Then dump the icing and buy plenty of jam and cream.

To build a property portfolio, the principles are just the same. If you want to benefit from BTL rentals and long-term income, then you’ll need to buy the properties that people will want to rent. If your investment objective is to make money from simply buying and selling, then the properties you buy will need to appeal to homebuyers.

Tip 3: Know your market

All private landlords need to know their market: the tenant. Before I invest in any property, I make sure I do the groundwork and ensure the demand from tenants is going to be there. There’s no point in buying one-bedroom flats if 90% of the local population are families.

Emotions come into play here, too. I’m a pretty charitable sort of guy, but not when it comes to business. This might sound harsh, but I avoid tenants on benefits and those receiving housing benefit. Experience has taught me that I’m more likely to lose money with such tenants than make the rental yield I was expecting. The more profit you make, the more charitable you can be as you build a property portfolio.

Tip 4: Get educated and learn how to build a property portfolio

Nothing that is worth doing doesn’t require a bit of blood, sweat, and tears. Learning about property research, due diligence, and how factoring in UK property tax into your buy-to-let investment strategy will impact you is important. Do the hard yards and you’ll be prepared to run the marathon.

Remember to visit the Gladfish Academy blog. It’s a large − and growing − free resource with all the information you need about property investing.

Tip 5: Understand the BTL rentals market

Understanding the housing market and how house prices move is only one element of successful property investing.

Get on top of the financial side of property investing, too. Understand how to crunch the numbers and the importance of cash flow. When you’re building a property portfolio, this will be really important. While your main objective might be rental income, don’t forget that this is taxable. Fortunately, there are plenty of deductibles that will reduce your tax liability.

These are just two examples of the depth of knowledge that will make a big difference to your profitability as you build your property portfolio.

Tip 6: Be an investor, not a landlord

Some people want to be full-time landlords. My advice is to avoid this. As a property investor, you should be investing to improve your lifestyle. That means achieving the rental income that allows you to spend more time doing the things you really want to do.

You’ve got enough on your plate learning about the property market. Leave property management to the professionals. The cost is tax deductible, and you won’t get disturbed at three o’clock on a Monday morning by a tenant complaining about a dripping tap!

Chat with the team on +44 207 923 6100 today and you could join thousands of other investors who have got the mindset of success.


James Cox

Himansu Joshi
August 22, 2018

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