Landlords, don’t put all your property investment eggs in one basket!
The market is calm and stable, with huge long-term demand and with more people renting for longer, now is a great time to invest in property.
Tenants are renting for longer as it takes a bit more time to get a footing on the property ladder. Being a landlord is very much a business. The most successful businesses adapt to the times. It’s true that many tenants are feeling the pinch of the cost-of-living crisis. But for many savvy landlords, this is a great opportunity to grow and expand their property portfolio.
Increasing rents
The buy-to-let market can be highly lucrative and offer great returns on investment. Average rents increased in the 12 months from December 2022 by 12.1%.*
Supply is short
The shortfall in the supply of rental properties is still massive and will remain so for many years to come. Simply put, there are far more tenants than available properties.
The trend toward smaller homes
Smaller, more affordable homes are in demand. Flats and more modestly sized homes are appealing simply because they are cheaper to run. Tenants are a little more cost conscious with the challenges of the cost-of-living crisis.
Energy efficiency is easier
It’s not all about size. Modernising your rental property is now becoming more essential than ever. This is much easier to achieve in more modestly sized homes. Energy Performance Certificate rules will be more stringent in 2025, with new tenancy agreements having to meet an energy rating of C. If modifications need to be carried out to meet these demands, the smaller the property, the more likely it is that they will be cheaper.
Bigger can be smaller!
Developing larger properties and then letting them out room by room is also a great way to spread the risk of your property investment. Converting terrace homes into flats can double your rental income while helping to alleviate the chronic shortage of affordable homes.
Funding efficiency
Investing in multiple properties is a shrewd move when it comes to expanding your portfolio. Instead of having all your capital tied up in one property, investing in smaller properties means the funds you receive for one can help cover the costs of the other.
The opportunity to diversify
The more property you own, the more rental markets you can pursue. Invest in the student, professional, house, flat, or holiday home markets—the possibilities are endless.
The best of both worlds
If you are not sure whether you want to develop property to sell or let property, you can enjoy the best of both worlds and adapt your investment plan more easily.
Whether you are looking to expand or create a property portfolio from scratch, get in touch to see how we can help you today!
Zoopla*
This article was originally published by BriefYourMarket and is reproduced here with their permission.
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