The monthly magazine providing news analysis and professional research for the discerning private investor/landlord

Starting Out? Make Sure You Establish Your Strategy And Arrange Your Finance

A lack of an investment strategy is probably the single biggest reason why property investors fail to achieve their property objectives. Like any other business if you do not know what you are doing or where you are going then how do you expect to succeed? It is important to understand how your strategy will support you in achieving your goals. Are they aligned? I've met far too many investors who are either pursuing the wrong strategy to fulfil their dreams or don't seem to have a strategy at all.

The UK residential property investment market, for retail investors (i.e. you and me) is relatively new. The buy-to-let sector, as we know it today, only started in the mid-1990s when legislation which affected landlords and tenants had been changed in favour of the landlord. This meant that banks were more comfortable lending to landlords knowing that they could evict the tenant and repossess the property if they needed to. Prior to this, tenants had more rights, which made it difficult to evict them, which discouraged banks' lending to the sector.

For the first ten years or so the majority of investment purchases were straight buy to let, single let properties, where landlords would buy and rent the property on a single let tenancy. A very straight forward strategy and when you consider property prices at that time were rising, all the investor needed to do was hold the property, ensure he/she paid the mortgage, and let the rising property market do the rest.

Around the time of the Crash in 2008, and the evaporation of traditional buy to let finance, investors had to reinvent themselves and deploy new strategies and find creative ways of securing and controlling property, some of which the UK market had never seen before.

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