Growing Your Portfolio
A property portfolio can provide you with a good combination of capital growth and regular income. However, no investment is without risk. Property investment could have more potential pitfalls than traditional financial investment. This can be countered by a sensible approach and proper planning.
If buy to let property is the best investment option for you, it is important to view lettings as a business. If in doubt, try this exercise:
- Do you have a customer(s)? Yes, they are called tenants.
- Do you supply any product or service? Yes, you put a roof over a tenant's head.
- Do you receive payment for that provision? Yes, it is called rent.
- Is there a contract for that supply and payment? Yes, it is called a tenancy agreement and exists even if you don’t put it in writing.
- Is your contractual relationship governed by rules and regulations whith both civil and criminal penalties? It certainly is.
- Can you delegate ALL your obligations to an agent? No, for some in respect of safety and deposit protection, the buck stops with you.
- Do you pay tax on the profits you make? Yes.
The above seems like a pretty comprehensive description of a business activity.
So, if you are in business, what do you need?
A business plan is always a good place to start. Whether it is a master plan right from the outset of your buy to let journey or used as an assessment of where you are and where you want to be with your investment, a business plan is an invaluable tool for ensuring you focus on what you want to get out of your business venture and what you need to do to achieve that.