In 2015 we launched our #FeatureFriinitiative which meant that on the last Friday of every month, we shared a guest blog post written by an expert within or related to the property industry, on the Martin & Co News section and within our social media channels. We are thrilled to announce that #FeatureFri received an amazing response and we aim to continue with our initiative throughout 2016.
Introducing this year's series of #FeatureFri guest blog posts is Right Surveyors, who are a group of surveying practices providing surveys, valuations and property advice across England and Wales. We help thousands of clients each year safely buy their new home, invest in property and efficiently manage their current property holdings.
In this post, Right Surveyors guide you through the important elements to consider when thinking about expanding your property portfolio.
Much is written to provide advice for property investors setting out on their investment journey for the first time, but the second time investor is often neglected. No more! In this article we look at some advice specifically for those second-timers, to help them maximise return and turn a single holding into a veritable empire.
Nevertheless, once you already have a let property, adding another to that portfolio is a big step. Lessons can and should be learnt from your experience so far and various areas of improvement exist that those serious about putting together a profitable and smooth running portfolio should take note of:
The chances are, if you're building a property portfolio, you're looking to achieve a steady return from a safe investment area which will put you in a strong position for retirement when it eventually comes.
If this is you, then the priority should be yield. Defined as the percentage return of net rent, as against the gross investment cost (purchase price); yield measures how much your investment is making you and can be benchmarked against alternatives like a savings account or stock-market tracking fund.
Every property will give you a different yield and some can grant the owner in excess of 10% pa, a very substantial return in this time of historically low Bank of England base rates.
With one investment property already under your belt, why not spend time before purchasing the next one making sure you get the best return possible?
Tying in to the concept of yield, certain locations will net you a much better return. Areas of Manchester, Liverpool, Newcastle and a number of other cities offer very competitive purchase prices and quite robust rental returns combining to generate exceptional yields.
If you've already bought your first buy-to-let and are now comfortable with the concept of running a tenanted property, why not start to look further afield? As long as you team up with a good quality local letting agent and find reliable local tradesmen in case of issues, you may find that the higher returns outweigh the distance disadvantage.
What About a Project?
Assuming your first investment was a straight up buy-to-let, why not take on a project this time? Neglected or re-possessed properties often come available and can be bought at auction for a very reasonable price. If you have the time, skills and inclination you can convert such a property to something much more valuable.
In any such scenario, the advice of an RICS registered valuer is invaluable. You don't want to waste time investing in areas that won't maximise the property's value. Here's what our RICS Registered Valuer in Manchester said:
Attractive decorations and a feature shower might help with saleability, but true value is more difficult to add. Focus on increasing the usable floor space, the number of bedrooms and structural features like garages and conservatories. These are the sorts of thing that will elevate your property into the next value band.
It sounds obvious, but managing two rentals instead of one will essentially mean twice the work. If you've been managing the situation yourself to this point, you may now consider the services of a high-quality local letting agent to handle things for you.
Unfortunately, it seems that truly high-quality local agents are hard to find so don't be afraid to spend time researching online before you choose one. Focus on independent third-party review sites like trustpilot.co.uk and see what your fellow consumers say about your potential agent.
If you want to continue to handle things yourself, you may well benefit from a slightly higher return but be prepared for some sleepless nights!
However, for more information on instructing a surveyor, contact Right Surveyors here.
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For more information on the buy-to-let market, visit our other blog articles on the subject here. Or contact your local Martin & Co office who will be happy to provide their expertise and support with your investment.
Disclaimer: Guest blog posts on the Martin and Co blog are written by external companies. Martin and Co do not endorse the products or services of these companies.