If not Buy To Let Investment then What?!

Brett Alegre-Wood
October 26, 2020

There are heaps of Opportunity in Buy-To-Let

Big companies are investing billions of dollars in buy-to-let. You may say that you're jumping out it because it's no longer what it was but neither is pension and shares. Do you jump out somewhere else or do you ride the big companies who are pumping billions of dollars into build to rent?

If you jump out of buy to let what else have you got? because pension funds their returns are dropping you know they're not getting anywhere near the returns they were or neither returns that you can get out of buy-to-let still.

If you look at things like you know going and doing development and the risks associated with it. If you look at the things like investing in shares and the risks attached with that and the time you need to put in. When you factor in all these sorts of things, you've got to sit there and look at the time cost as well as the risk as well as the potential upside or return. 

Property funds you know holding 12 billion face reopening dilemmas. You've got here things like pension funds which are out there and they're trying to find these big massive bonds because they're getting almost pension money which governments are driving people into pensions and pensions are looking for assets to invest in.

The problem is with so much liquidity guess what? The results are likely to go down and down so where are you going to put your money? And this is the problem you can say well I'm jumping out of buy-to-let because buy-to-let is no longer what it was, no but neither is pension neither are shares neither of that.

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Now you might say but hold on shares went up this much and that sort of stuff and absolutely if you can read the market you're that good fine. For the most people they don't have the ability, they're not trained in that they don't experience in that they're not that risk you know they're not that risk profile and when you factor those in you know that's something to consider.

One of the big things and one of the big moves is that you know UK build-to-rent you know seeing record levels investment. Let's talk about build to rent so what build to rent is simple is this is where I think what's happening is these pension funds these big companies that have billions and billions of dollars getting pumped into them they need somebody to invest their money and so where are they putting it they're putting it into housing.

And this build to rent thing has been born which is basically we build it and we rent it out. So they own it and they earn a return off it. Interestingly they're putting billions in to buy- to-let, it's buy-to-let there's no two ways about it they're not getting more than the market rent they're not getting you know they're subject to the same things that we are as landlords,  but the reality is is they have the they have a big coffers to be able to pay for these things and have higher staff and to do all this or stuff. 

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But build to rent is a massive massive growth area, now the question is do you jump out and go somewhere else where do you go? or do you ride on the coattails of these giants? and for me that's what you need to be doing is you need to be sitting there going you know what i'll take the hits because i know at the other end yeah there's profit there because these massive massive companies are dumping billions into build- to-rent to build these big developments.

And actually you're going to supply a market that they're not supplying, they're doing flats mainly. They may be doing a few houses and that sort of stuff but for the most part the stuff that you and i will be investing in is not necessarily the stuff that will compete with the stuff that they're doing so you know heaps of opportunities.

Video Transcription

If you jump out of buy to let what else have you got? because pension funds their returns are dropping you know they're not getting anywhere near the returns they were or neither returns that you can get out of buy-to-let still. If you look at things like you know going and doing development and the risks associated with it. If you look at the things like investing in shares and the risks attached with that and the time you need to put in. When you factor in all these sorts of things, you've got to sit there and look at the time cost as well as the risk as well as the potential upside or return. Property funds you know holding 12 billion face reopening dilemmas. You've got here things like pension funds which are out there and they're trying to find these big massive bonds because they're getting almost pension money which governments are driving people into pensions and pensions are looking for assets to invest in. The problem is with so much liquidity guess what? The results are likely to go down and down so where are you going to put your money? And this is the problem you can say well I'm jumping out of buy-to-let because buy-to-let is no longer what it was, no but neither is pension neither are shares neither of that. Now you might say but hold on shares went up this much and that sort of stuff and absolutely if you can read the market you're that good fine. For the most people they don't have the ability, they're not trained in that they don't experience in that they're not that risk you know they're not that risk profile and when you factor those in you know that's something to consider. One of the big things and one of the big moves is that you know UK build-to-rent you know seeing record levels investment. Let's talk about build to rent so what build to rent is simple is this is where I think what's happening is these pension funds these big companies that have billions and billions of dollars getting pumped into them they need somebody to invest their money and so where are they putting it they're putting it into housing. And this build to rent thing has been born which is basically we build it and we rent it out. So they own it and they earn a return off it. Interestingly they're putting billions in to buy- to-let, it's buy-to-let there's no two ways about it they're not getting more than the market rent they're not getting you know they're subject to the same things that we are as landlords,  but the reality is is they have the they have a big coffers to be able to pay for these things and have higher staff and to do all this or stuff. But build to rent is a massive massive growth area, now the question is do you jump out and go somewhere else where do you go? or do you ride on the coattails of these giants? and for me that's what you need to be doing is you need to be sitting there going you know what i'll take the hits because i know at the other end yeah there's profit there because these massive massive companies are dumping billions into build- to-rent to build these big developments. And actually you're going to supply a market that they're not supplying, they're doing flats mainly. They may be doing a few houses and that sort of stuff but for the most part the stuff that you and i will be investing in is not necessarily the stuff that will compete with the stuff that they're doing so you know heaps of opportunities.


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