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Understanding your buy to let goals

There was a time when property investment was less risky, offered easier returns and was much less regulated.

But increased taxes, greater regulation and higher costs mean anyone starting or enlarging a buy to let portfolio must be cannier about their investment goals. Here we explore some of the key questions we urge our landlords to consider before diving in.

Hands on or off?

The landlords we look after fall into two approximate categories – active, hands-on types who keep a close eye on their property, tenants and the nitty gritty of the financials. Or there are the pure investors who want a return at the end of each year, trust us to do the rest and often live overseas or elsewhere in the UK. Which one would you like to be?

Contact our property management team to discuss how we can help manage your investment

Income growth or capital gain?

You’d assume landlords would like both, but often we find it’s one or the other. Landlords looking at the long-term focus on how much the property may rise in value and use the rent to keep the show on the road. Those looking at the shorter term often want to create income as soon as possible, often because they’re about to retire. It’s important therefore to think about the time-frame of your investment, and whether your property is an accelerator (capital gain machine) or a generator (a rent producing one).

Research and explore local sold prices 

How much risk can you afford?

Halifax figures show £100,000 invested in property during 2000 would have increased in value on average by 132% by 2014. This sounds great, but on the ground our landlords know that the riskier their investment strategy, the greater returns might be. Buying a property in an as-yet undiscovered area may help increase the capital value of it when local prices increase, but it’s a risk. Many landlords prefer to buy in more established areas.

We have an array of area guides for you to look through

Which tenants are you chasing?

Tenants come in many flavours including students, professionals, temporary foreign workers, low income, high income, families, short-term renters and corporate renters. Each has distinct upsides and downsides and we’re here to help identify which one best fits your investment approach.

Find out more about tenant types and how we can help find the right tenants for you

Do you have an exit strategy? Are you going to own your investment property for ever or will you want to sell up one day? Or perhaps you want to leave it all to your children? Whichever, there are both capital gains tax and inheritance tax rules that you’ll need to consider.

We suggest speaking to an indepenedent financial advisor to discuss tax rules and implications. 

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Inhouse experts
In house team London Property Market

As the marketing and communications team at Kinleigh Folkard & Hayward's head office, our aim is to keep you updated and informed where the London property market is concerned. In addition, we'll bring you tips on navigating current issues and trends in the market when buying, selling, letting and renting to ensure that whatever field you're interested in, you'll be completely informed.

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