Take stock for property investment success in 2017 and beyond
As we move towards the end of 2016, many property investors will be looking back to learn lessons. It’s been quite a year. We’ve had the political shock of Brexit, through which the UK property investment market has remained pretty unscathed. Donald Trump has become President-elect in the United States, defying all the pollsters.
Next year could be one of more upheaval. There are elections in many of Europe’s major markets, and by the end of 2017, we could be looking at a very different political map. There is always the capacity for a rogue nation like North Korea to upset the applecart. The global economy could yet collapse under the weight of huge governmental debt.
With so much uncertainty, now could be the time to look forward rather than back. Doing so will help protect your portfolio as you remain ready to take advantage of the best places to invest in property UK.
Here are my nine resolutions for property investors for 2017.
1. Revisit your cash flow and be realistic
Cash flow is going to become increasingly important to the health of your property investment. The BoE cut its base rate immediately after the Brexit vote, but that cut looks increasingly likely to be reversed in 2017. Already we’ve seen some buy-to-let mortgage rates start to rise. Higher inflation is set to push other costs up, too.
If you haven’t done so in the last couple of weeks, take a long hard look at your rental income and investment property expenses.
Do the same with your personal budget – if your investment property cash flow does turn negative, you will need to subsidise from your money while you take action to stop your property investment getting crushed by higher interest rates.
2. Review your mortgages
Take time at the beginning of 2017 to make sure that your mortgages (your buy-to-let mortgages and any mortgage on your home) are still the most competitive. Search on mortgage comparison websites to get a flavour of what is available before speaking to a buy-to-let mortgage broker. They will have all the latest mortgage market information at their fingertips and will be able to match your individual requirements with product terms and conditions.
3. Make sure your landlord insurance does what you need it to
As your landlord insurances approach their renewal dates, consider what covererage is required. While cover for unpaid rent or damage caused by tenants costs a little more, those landlords who have suffered from a rogue tenant have been thankful they paid the extra. Again, shop around for the most competitive policy – but be careful of the small print.
4. Stay rent competitive
Once every quarter, check rents in the local market to your investment property. It will ensure that you are neither charging too little nor too much. A competitive rent will help you to maximise your rental income profits and retain your best tenants.
5. Don’t stop learning
I’ve been in the property investment business for a couple of decades now, and there is always something new to learn. I’m a great believer in continual learning, and in making investment education free to access.
On the Gladfish website, you’ll find thousands of blogs, articles and videos. Also, you’ll be able to access our property research, our property investment guide pages, and keep up to date with the important property investment news. It’s probably the biggest free property investment education resource on the web today.
6. Review your property and investment portfolio
A review of your property and investment portfolio will help you to make sure that it is performing as you expect. Do this in conjunction with a review of your current situation, finances, and financial objectives for the next 12 months and in the long term.
7. Build your property investment network
As a property investor, you’ll need the help, advice and services of more people than you might think. Mortgage brokers, investment advisors, solicitors, accountants, property management experts and letting agents can all give advice and be on-hand to discuss markets, regulations and finances.
If you plan to go the DIY buy-to-let landlord route (rather than use a full-service property management company) you’ll also need to grow a list of builders, plumbers, electricians, decorators, and other tradespeople.
Networking is an invaluable strategy for all property investors.
8. Do your homework
Never rely on what you are told, and never take press and media reports as read. There is a lot of misinformation out there, especially on social media. For an example of just how wrong and misleading newspaper reports can be, read our article “Why property investors should never believe all they read in the newspaper”.
Check and double-check is the only way to make certain of facts and opinions.
9. Remember that the reason for investing in property is lifestyle
The only reason for making a property investment is for lifestyle. Whether that is achieved by creating income now or making a capital gain, or by investing in property as a strategy for retirement planning, don’t lose sight of the lifestyle benefits of property investment.
If you’re growing your portfolio and are currently a DIY buy-to-let landlord, the chances are that at some point the day-to-day work of being a landlord will simply become too time-consuming. It’s probably a better strategy to consider hiring a property management company sooner rather than later. It will give you a chance to assess their capabilities and then grow your portfolio with their help.
Have a prosperous 2017
We tend to concentrate all our New Year’s resolutions on personal goals – losing weight, cutting out alcohol, stopping smoking, and getting healthy are the most common themes. Don’t neglect your financial health. Make sure that you stay on top of your property investments through the year, and you’ll be prepared to take advantage of the best property investment opportunities when they come along.
Why not book a meeting with one of our property consultants in the new year? We’ll help you focus on your objectives, assess your investment property portfolio, and highlight the opportunities to refine strategy and increase cash flow. Contact one of our team today on +44 (0)207 923 6100and take a step towards financial fitness in 2017.
Live with passion
Brett Alegre-Wood
