At the end of last year I got my fantastic lettings team to carry out some market research on the problems currently faced by traditional landlords. After many late nights, lots of coffee and copious amounts of cake, we discovered the 5 biggest concerns of traditional buy-to-let investors:
1. YIELDS ARE NOT HIGH ENOUGH – Initial yields seem reasonable, but as any landlord who has been in the market for a while will tell you – there are always unexpected costs!
2. LOTS OF STRESS – Even with an agent in place, many landlord still worry about tenants, repairs, increased costs and void periods.
3. LITTLE OR NO CAPITAL GROWTH – Many investors bought with a strategy of selling in the medium term to take advantage of property price increases. This is not happening.
4. NEGATIVE EQUITY – Lots of landlords are unfortunate enough to be in this position.
5. FEAR OF INTEREST RATE RISES – 57% said a 1% rise in interest rates will put them in negative monthly cash flow (meaning they will need to put money in each month).
Now, not all landlords will face all of these issues, but I guarantee EVERY SINGLE ONE of them will be affected by one of them.
What does this mean? Is investing in property a bad idea? Of course not, but investors now need to be smarter and adapt their strategies and not follow the masses. The traditional rental market is becoming less profitable due to the amount of new entrants into the market. Rental demand is growing (and will continue to grow) but so are the amount of landlords competing against you for quality tenants. In my 18 years as a landlord (and 10 as a letting agent) I have seen the market change and the truth is…
…it is becoming more and more difficult to be a profitable landlord
Legislation, tenants’ rights, unexpected costs, regulation, price increases, void periods, repairs, rent arrears – just a small list of the headaches we have as landlords (and I should know, I am one). A lot of these are just an expected part of being a landlord, but many are unnecessary – they can be avoided.
So , would you like to find out how to avoid the above problems and effectively double your rental income? Simply email me over and I’ll send you my free PDF report – firstname.lastname@example.org