Somewhere in between, we have people who have purchased additional property for short-term investment/refurb purposes, for their children to live in when at university, to talk about at dinner parties and/or as part of a pension pot. In short, there are many reasons why people have become landlords over the years.
From a personal perspective, although I began my career in investment banking, I became a portfolio landlord prior to setting up the business in 2006. This was based on a passion for property, specifically in terms of how to finance this, hence the move into forming what was initially The Buy to Let Business, which has now been transformed into Dynamo.
When I bought my first BTL property in 1996, I was proud of getting a 7.99 per cent rate. A figure which illustrates just how competitive the current market is. With BTL, you remain in control of your investment. You can add value to it through renovation and through making sure you choose a strong location, although there are many other factors to consider pre and post any property purchase.
Being a landlord has always brought its fair share of challenges but it’s more important than ever to have a good, reliable support network in place to help maximise yields, minimise periods of rental voids, manage costs and maintain properties. As stated previously, location should always play a major role in any property investment, so it was interesting to see recent data from Aldermore Bank on how landlords impact local economies.
This research outlined that landlords spend £3.61bn on local economies across the UK and that the average landlord spent £1,443 on local tradesmen in the last 12 months. It also showed that 81 per cent of landlords used local tradespeople to maintain their rental properties, and 90 per cent of landlords said they intend to continue using or increasing the number of local services they use in 2020. Of the total amount paid to local service providers, landlords spent the most on letting agents (£879m) in the past twelve months, followed by £442m on general handy-workers and £396m on plumbers.
The bank suggests that 39 per cent of landlords say trust is the main reason why they turn to local tradespeople to service their properties, while 26 per cent attribute it to them not living close to the rental property.
The vast majority of landlords continue to profit from their property(s), but many are wrongly portrayed as squeezing vast profits from them. In the modern BTL market landlords are constantly having to assess the profitability of individual properties and how they can better support their tenants. And the advice process continues to sit at the heart of maximising any property portfolio, large or small.
