Building a property portfolio in London is anything but easy, but not impossible. Financial brokers Finbri offer the following tips on how to grow your empire…
Main photo: Unsplash Bethany Opler
1 Be prepared to move quickly
Being one of the most popular cities in the world, it should come as no surprise to learn that houses in London move incredibly quickly. Therefore, when building your real estate portfolio, you must be ready to invest right away.
This means getting all your cash in order, having a carrier on hand, and ultimately ready to go, go, go.
In other words, Not only should you have a plan A and B, but you should also consider any other emergency plans you may need to take in an emergency.
It can be difficult to arrange a longer term financing source, but consider setting up a bridging loan in the event of a problem getting financing or backing up carrier in case your first choice does not deliver.
“Bridging loans can be used for a variety of reasons, but are most commonly used for property purchases, property development, renovation or refurbishment and investments to let,” says Finbri, the UK financial broker.
“Bridging loans are also used by those in real estate development who need to make large secured payments in the short term, such as auction purchases.”
2 Do your research
London’s neighborhoods vary widely in affordability, so it’s worth researching ahead of time. In fact, depending on how much budget you have available, many of the more central areas of London may need to be ruled out immediately.
For example, places in the W1 zip code area, such as Mayfair, Marylebone, Fitzrovia and Soho, have an average house price of around £2.4 million, while living near the famous Natural History Museum in South Kensington will cost you around £1.9 million.
That’s why when building your London property portfolio it’s important to keep an eye on how the market moves and where you can actually afford it.
Ask brokers for advice on any areas in which significant investments have been made recently and which are now classified as ’emerging’.
Likewise, if you’re considering eventually renting out your property, consider what your potential renters are looking for.
For example, how close are the local schools? Is there a central train station nearby? Where is the nearest metro station? Are there any convenience stores or petrol garages?
These are just some of the questions to ask yourself when researching whether or not you should invest in a particular area of London.
3 Start with one trait
While it’s always good to dream big, building a real estate portfolio can be difficult at the best of times. But especially in London – one of the ten most expensive cities in the world – it can be particularly difficult.
So instead of trying to juggle too many things at once, start with just one trait and invest all your time and attention in it.
While it may be perfectly doable, try to invest in two or three properties at once time can cause quite a headache and leave you vulnerable to making potentially costly mistakes.
After all, there are many things to remember when buying a home – from arranging a home buyer’s report to setting up a carrier to signing all the mortgage forms to organizing the moving van and finally finding tenants to live there. .
So try to start small and build up. That way, you can learn from your mistakes and identify potential areas to keep in mind when investing in subsequent properties.
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