Political instability, an ever-growing energy crisis, higher interest rates, rising house prices, and a hostile regulatory environment. It seems that every day there are new challenges for property investors, and understandably, many are contemplating leaving the market altogether.
If that’s how you’ve been thinking, don’t panic just yet, take note of these facts and tips that could just help you to not only survive, but thrive in the coming years.
Use the right broker
It cannot be stressed enough – working with a trusted broker, one who has their finger on the pulse, can mean the difference between a portfolio that has you constantly working, and one that works for you.
Does your broker have a good overview of your portfolio, does he ask questions to understand how you are leveraged? As market conditions change daily, now more than ever you need to have a balanced portfolio.
Buy at auction
If you haven’t considered it before, maybe now is the time. With the market predicted to turn in 2023, with an expected average 10% drop, now is the time to consider cheaper property that can easily be found at auction.
Long gone are the days when auctions could only be used by cash buyers. Companies such as Propp compare “bridging financing” which can be an excellent and versatile tool for those looking to convert auction properties. These properties might need a little work, but that often means they also come with cheaper mortgage payments.
Shake things up
No really! If you’ve only ever focussed on one kind of strategy, buying and renting residential property for instance, now is the time to consider whether a change in strategy could benefit you.
One recently popular strategy is to convert unused commercial properties, of which sadly there are many after the covid pandemic forced many businesses to close, to residential property.
Why could this be a useful strategy? Typically, commercial property is valued lowered, so after converting to residential the value has already increased. Further, converting one commercial building into several residential flats, opens the opportunity to sell one or more of the flats to fund a future project while still leaving you with an increase of properties in your portfolio.
A word of warning. Although many commercial properties are eligible to be converted to residential use there are some which will be excluded. These can include listed buildings, areas of significant natural beauty, or of particular scientific interest. Make sure that you research the property and the area thoroughly before making any purchase. These leads us nicely into our last tip.
Location can be key
Find areas that generate a higher yield. Currently Scotland and the northeast hold all top 10 spots in contrast to London and the Southwest. This can reduce the pressure you may feel on your margins and open up new opportunities for growth.
Before making your next purchase use tools to check the postcodes that are currently producing the highest rental yields. This might mean stepping out of comfort zone, purchasing property in a new area, but this extra research and work can lead to even bigger rewards.
So do you need to panic? Not necessarily! While understandably the next few years we will see a lot of changes in the rental market, we will also see new opportunities for those savvy enough to adapt to these changing times.
As many first time buyers find themselves unable to get on the property ladder there will be a greater need for rental properties. So get yourself the right broker, shake things up, buy properties at auction and look at new location opportunities and you’ll come out on top.