Getting a return by Building a Property Portfolio

Building a property portfolio is generally seen as one of the better ways to create wealth and with the property market in the doldrums anyone that can get a mortgage can make serious wealth over the next few years. Without sufficient savings or a decent income it becomes a lot harder. With no income and no savings it becomes a task of even greater proportions but by no means impossible as with modern day option deals, rent to buys and lease arrangements virtually anyone with the right guidance and some initiative can get themselves on the road to success.

Many new landlords have used the supposedly ‘new ways’ of working to do just that but in reality there are no new ways of doing things just changes to the way things have always been done in different markets. One of the big problems with building a property portfolio is having the time to work on it and as the portfolio increases in size so the amount of time needed to carry out repairs, maintenance, viewings, advertising, bookkeeping, etc. increases as well.

As an advocate of delegation of everything, having to do even the simplest of tasks is now against my better judgement as I consider there must be someone more capable than me to do it. This of course doesn’t rule out many silly practicalities that can be completed without any reference to anyone such as changing lightbulbs or any of the other little jobs that some tenants expect to be included in their rental agreement.

There are benefits to using modern ‘lease option’ deals mainly there are no deposits, no mortgage requirements and no credit checks, however, to everything that appears a good deal there can be a downside. Many people are getting a raw deal from lease options and unless ethical practices are brought into play it is likely that this will continue. Finding tenant buyers and getting deals structured legally are fraught with complications and adds time delays and major costs,that’s if you can find a suitable solicitor to carry out the work. Where people are claiming to have made huge amounts of money from these types of deals are not necessarily a win/win scenario for the vendor.

Most deals are banking on there being an option purchase down the line or giving back the debt to the original owner. Many of these deals could potentially be storing up trouble for the future and whilst they have their place particularly in the commercial world,many private investors would be well advised to look at building a property portfolio in a traditional manner. At this time of year there is always a surge in the property market. You can guarantee that any movement however small will be talked up to make it seem like the market is moving again.

The reality of many things are not as we see, hear of often think about them. There are some well know words that come to mind at this point, ‘Believe nothing, no matter where you read it or who said it unless it agrees with your own reason and common sense’. Whilst many people are clutching at straws it is unfair to take advantage of their poor situation. Building a property portfolio needs to be about helping others not just getting rich by any means possible.

We tend to look at investors with a more rounded view so they can achieve for themselves exactly what they want. Many people are just concerned with running out of money in their retirement and there are certain questions that need to be answered before looking at strategies.

Tips of the week:

  1. The first is for what reason are you building a property portfolio? 
  2. Then for how long will you need it to provide what you want from it? 
  3. How can cash and inflation impact on your portfolio? 
  4. How do you establish your primary investment objectives and is building a property portfolio necessarily right for you? 
  5. Then what are the important trade-offs that you will need to make in order to make building a property portfolio feasible for you?

Asking questions like this can open up a whole new range of reasoning and establish exactly what you should and shouldn’t be doing in property. The common problem we see is that few people are guided by people who are doing what they say they are doing, instead they are selling them information and education about it as it’s more lucrative to them than actually doing it. Whatever your intention with property try to work with the right values, the right mission, the right culture and the right team.

Always put the vendor first whatever deal you strike.

Written by:
Lionel Palatine – He is a regular networker and a speaker at events as well as being a property author and adviser. He joint ventures deals and shows people how to buy property for low cost which are inclusive of all fees and deposits.

You can find him on regular social media Twitter |  Facebook  |    |  Youtube  don’t forget to add him

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