Building a property portfolio in London is anything but easy, but it’s not impossible. Finance brokers Finbri offer the following tips on how to grow your empire …
Lead Photo: Unsplash Bethany Opler
1 Be Prepared to Move Quickly
Being one of the most popular cities in the world, it should come as no surprise to hear that houses in London move incredibly quickly. Therefore, when building your property portfolio, you’ll need to be ready to invest right away.
This means you’ll need to have all of your funds in order, a conveyancer on hand and, ultimately, be ready to go, go, go.
In other words, you’ll not only need to have a Plan A and B in place, but you’ll also need to consider any other contingency plans you might need to take action in case of an emergency.
Being able to arrange a longer-term source of finance can be difficult, however, consider setting up a residential bridging loan in case of an issue with accessing funding or a backup conveyancer in case your first-choice fails to deliver.
“Bridging loans can be used for lots of reasons but most commonly used for buying properties, developing, renovations or refurbishing properties & buy-to-let investments,” says UK finance brokers Finbri.
“Bridging loans are also used by those in the property development business who need to make large secured payments at short notice such as auction purchases.”
2 Do Your Research
London’s neighborhoods vary widely in affordability, so it pays to do your research in advance. In fact, depending on how much of a budget you have available, many of London’s more central areas might need to be ruled out immediately.
Places in the W1 postcode area, for instance, like Mayfair, Marylebone, Fitzrovia and Soho, have an average house price of approximately £ 2.4 million, while living near the famous Natural History Museum in South Kensington will set you back approximately £ 1.9 million.
Therefore, when building your property portfolio in London, it’s important to keep an eye on how the market is moving and where you can actually afford it.
Ask estate agents for their advice on any areas that have had significant investment put into them recently and are now classified as ‘up and coming’.
Likewise, if you’re thinking of eventually renting your property out, consider what your potential tenants will be looking for.
For example, how close are the local schools? Is there a mainline train station nearby? Where is the nearest tube station? Are there any local shops or petrol garages?
These are just some of the questions you’ll need to ask yourself when researching whether to invest in a particular area of London or not.
3 Start With One Property
While it’s always good to dream big, building a property portfolio can be hard at the best of times. But in London especially – one of the top 10 most expensive cities globally – it can be particularly difficult.
Therefore, rather than trying to juggle too many things at once, start with just one property and invest all of your time and attention into it.
While it may be perfectly doable, trying to invest in two or three properties at the same time could cause quite the headache and leave you vulnerable to making potentially costly oversights.
There are many things to remember when purchasing a property, after all – from arranging a HomeBuyer’s Report to setting up a conveyancer to signing all the mortgage forms to organizing the moving van to, finally, sourcing tenants to live there.
Therefore, try to start small and build upwards. That way, you’ll be able to learn from your mistakes and identify any potential areas you’ll need to keep an extra eye on when investing in subsequent properties.
How to Easily Fix Those Niggling Jobs Around the House
60% of Londoners Are Desperate to Make Their Homes Bigger
What to Consider When Buying Seafront Property