The number 1 reason that Hornchurch landlords should be looking to grow their property portfolio
There are many different types of landlords. The INVESTORS who treat property investing as their full-time job are likely earning the most from their investments. So how can all landlords build a portfolio?
There are many different types of landlords. Some treat property investing as their full-time job. They have a portfolio of properties, all filled with happy tenants. They leverage professionals to handle the refurbs and maintenance of the properties, and they use agents to collect the rent each month, conduct property inspections every few months, and take the change over when a tenant moves out. They outsource as much as possible.
They spend their free time finding and negotiating the next deal. These landlords are actual property INVESTORS and always have their fingers on the pulse.
They'll have a variety of property styles and types in their portfolio, including some serviced accommodation and HMOs to keep things varied.
And then there are the others.
The true LANDLORDS.
Often these landlords will only have one or maybe two properties. Each month's income is an excellent supplement, but they still have full-time jobs.
They stick to the 'norm' with property types. They probably wouldn't venture into major refurbishments or the more unconventional deals.
They likely became landlords 'accidentally'. They acquired their rental property through inheritance or possibly when two families joined and moved in together. Left with a 'spare' property, they decided to rent it out.
Of course, as with everything in life, everyone's circumstances are different. And what works for one doesn't necessarily work for another. But it's an almost universal truth that people want to make more money.
And there's a way that the LANDLORD character could be generating MORE, just like our INVESTOR, without it taking over their entire life!
There are many benefits to growing a rental property portfolio. It's possible to do this without leaving your career to work in property full time.
The main reasons that landlords and property investors grow a portfolio of properties are
Capital appreciation. This is when the property's value increases over the time you own it. When you come to sell or choose to increase the mortgage, you can release that equity. Simply by holding on to the property worth more than when you purchased it, you have generated a lump sum of cash.
'Somewhat' passive income. There aren't many ways to earn monthly money without working more hours. With the right team of professionals, you can reap the rewards of the monthly rental income with minimal impact on your life.
Wealth growth. Property investment is a long term plan. Purchasing a property will not make you wealthy overnight, but over the years, it certainly could. Because you own a tangible asset, and that investment generates monthly revenue. But you can sell the purchase at any time to recover the equity. You would then lose the monthly income (because you no longer own the asset). Still, it can be passed on when you die because you own the buy, creating generational wealth.
Pension protection for your future. When you leave your 9-5 career and begin your retirement, you should have pensions and savings to live on. But once you've spent it, that money is gone. Imagine that you also had a monthly income that doesn't 'stop' once you've finished but renews each month for the rest of your life? Suppose one property gives you a £300 per month profit. You could likely replace your salary with 5, 6, or 7 properties and live for the rest of your life without any money worries (except taxes, of course, you can never forget about those!)
Capital appreciation is evident when the market is buoyant and rising. Imagine that you have a property worth £100,000 and rent it out, giving you a monthly income of £300 (after fees etc.). That continues to provide you with an income without any problems.
When the property value increases to £110,000, your investment has risen by £10,000! Which is great, isn't it?!
But let's say you have 5 of those investments. They've all increased by £10,000. You have a £50,000 equity increase in your properties without lifting a finger!