In the second of a series of articles on investing strategies that are applicable in the current market, this month Richard Bowser talks with experienced property investors and mentors Tony Law and Louise Reynolds

To the surprise of many supposed experts and online vocal commentators on property market trends, it has been increasingly clear in the last two months that the UK residential sector is seeing relatively buoyant buyer demand and that buy-to-let is by no means a ‘dead duck’ as an investment class. But what choices are there for those just starting out, or perhaps those that own a few properties already but are still keen to acquire more. I spoke firstly with Tony Law who is an experienced portfolio landlord and investor to gage his thoughts.

My first question to Tony was, when looking ahead, which property strategy would he suggest newer investors consider for the immediate future and why?

“Whilst there’s been big shifts in the property market over the past two or three years,” he replied, “I still very much feel an investors’ first property should be a ‘vanilla buy to let’ that they hold for the long term and rent out to a single family unit.

“But very importantly, that first property needs to be purchased either at a sizable discount (BMV) or you need to add ‘massive value’ in some way and there are lots of ways to do this. If done well and that is not always so easy in some locations, that means you can then refinance that property at a higher price fairly quickly and pull all, or most, of your initial investment back out of the deal. You can then reuse this money to go and buy your next property.

“The advantages of buying a straightforward vanilla investment as a first property are numerous, but include…

• You’ll learn so much from the process.
• When buying your second property, lenders will be happier that you’re an existing landlord.
• When you refinance that property your return on investment (ROI) increases dramatically, because you should then have less of your own cash in the deal.
  And it also proves to any potential joint venture (JV) partners that you know what you’re doing, so they will be more likely to be confident about investing with you in future.”