Ultimate Guide: How to start a property portfolio

Are you wondering how to start a property portfolio? You’re not the only one! The Buy-to-Let industry is worth over £1 trillion in the UK and it’s expected to increase as renters are estimated to outnumber homeowners by 2039.

With an already increasing demand within the rental market, the population and shift towards renting are anticipated to accelerate this even further.

The UK population could reach 71 million people in the next 20 years. Although a quarter of the UK will be 65 or older by 2050, there’s been an upwards trend of over-50s downsizing and renting.

And renting remains one of the go-to choices for young professionals and students – they make up the largest proportion of tenants at 47%.

While there have been some turbulent times over the last couple of years, property investing has long been known as a lucrative field for those interested in the long game. However, you must always do your own diligence and be aware of risks before taking part in any investments.

If you’re wondering how to get into property investment UK or how to start a property portfolio, we’ve got you covered with the ultimate guide, including the tips and tricks you’ll need to get started…

*Please note this blog does not constitute investment advice. Conducting your own due diligence and being aware of risks before making any investment is key. Seeking independent financial advice may be appropriate.

Should I invest in property?

The phrase ‘as safe as houses’ has been rolling around for years – and for good reason!

Real estate investing has long been considered a secure investment strategy for those looking to hold for the long-term and receive regular profits.

Unlike investing in the stock market or through crypto, your investment will be tangible. It’s something you can hold on to for as long as you like and something you can even pass down through generations.

There’s almost 100% certainty that your property will generate rental income. This can go into your pockets each month and will grow as you develop your portfolio.

In 1999, the average house price was just £77,961. In May of 2022, that figure rose to £283,000. That significant increase continues to grow, providing a nice chunk of change for anyone with property investments.

And for those who are already investing through other means, property can be a great way to diversify your portfolio.

Is 2022 the right time to invest?

This is an age-old question.

The ups and downs of the property industry can never be accurately guessed in advance, but a good deal on a property can bring in rental income at all times. There will always be a demand for property, especially with the increasing population, birth rates and life expectancy.

As the cost of living increases, so do rent prices, meaning your monthly cash flow will increase.

If you sell at a lower price than when you bought it, this wouldn’t be worth it. But just like with any investment, it’s often all about the long-term gain and waiting for the markets to increase again.

You should consider each property deal carefully.

How to get into property investment UK

There are various ways you can invest in the UK property market, and it’ll be completely dependent on what you’re looking for.

The most common investment strategies include:

• Buy-to-let
• Build-to-rent
• HMOs
• Holiday lets
• Freehold or leasehold
• Off-plan

While the buy-to-let approach is the traditional and most common investment type, HMOs and holiday lets have been growing in popularity over the last few years.

With houses of multiple occupations (HMOs), this comprises at least three unrelated tenants living in the property. These can include student housing or properties around built-up areas for young professionals.
Holiday lets have also been a go-to option since the rise in popularity during the pandemic, as tourist destinations in England saw more activity.

Whatever your preference, it’s essential you know the requirements around each one. You may need certain licences for one type and not the other.

How to start a property portfolio

Breaking down the process into separate actions is the easiest way to check off the boxes to smoothly enter the property investment world.

1. Determine your goals and the logistics

Firstly, will you invest under your personal name or via a limited company? This is a vital decision to make in the early stages as the implications can vary significantly. Read our handy article here for more information on which may be right for you.

It’s also wise to set criteria for your portfolio. This way, you’ll feel more prepared to accept deals as and when they come.

Think about what return you’re looking for, desired rental yield, locations and property style.

2. Financing

A common wall people face when looking to get started in property is a lack of finance.

Beyond paying by cash or through a mortgage, there are other ways to start investing:

– Equity

People have amazing value in their homes, yet they often don’t use it to their advantage.

Releasing equity in your current home could be a great way to raise capital quickly. An independent broker should be able to help you find the best deal.

– Family, friends or other investors

Is your inner circle aware of your goals to start investing in property? Leveraging your time and knowledge with other people’s funds can be a popular way to raise finance. After all, many people won’t be happy with the interest rates their banks are offering.

– Vacant homes

In 2021, there were 288,539 empty homes in the UK, with the North West being one of the top areas with the most empty dwellings.

If you come across one of these empty buildings, find out who the homeowner is by submitting an enquiry via Inland Registry and see if they’re open to negotiating.

The local council is often more than happy to help if you’re stuck.

3. Time to research

Once you’ve determined your goals and ways of paying for your property, you’ll need to do your research to find the best deals.

Take to social media to join community groups with fellow investors so you can learn from others and ask key questions.

You’ll want to learn about current market trends and activity in your chosen area.

The North West is a golden opportunity for location

The North West has quickly become one of the hottest regions to invest in property across the UK.

As development continues within the area, with various exciting projects and regenerations, the potential is endless.

Manchester, for example, has been hailed the capital of the North, with other big cities growing in popularity too.

And with London’s growing cost of living, people are moving north. Manchester recently beat London in the UK element of the best cities to live in.

The North West is also in the middle of one of the busiest transport links in Europe, with the new £14bn HS2 high-speed rail development advancing journeys even further.

With the fastest capital growth rate annually (than anywhere else in the UK) and the demand and strong rental yield, the North West is a great area to invest in.

To find investment opportunities, learn more here from North-West property specialists Forth Action Invest.

4. Find the best deals in the business

As a property investor, you’ll be looking for the best bang for your buck. And this means having a set plan with a killer offer strategy.

Or if you’re keen to grow your portfolio fast or simply find the greatest deals, working with experienced investment and development specialists is the best way to achieve this.

At Forth Action Invest, we can provide you with some great opportunities. You’ll get exclusive access to properties that aren’t yet available to the public. This guarantees you a better deal than you’d find after searching public property sites.

And as experts in the field, our network of contacts, housing associations and corporations often come to us with unique and exciting investment possibilities.

5. Once purchased, decide how hands-on you intend to be

For some, they want to be there for the whole process – including personally managing tenant calls, questions and repairs.

For others, they’d rather outsource the management so they can take a hands-free approach while pocketing the rent each month.

Either is fine and will depend on what you’re comfortable with, have an interest in, or simply have time for.

With a hands-free approach, where Forth Action Invest looks after the management, you can sit back and enjoy the investment adventure while every step is managed for you.

Are you ready to enter the world of property investing?

Although the steps and processes may seem extensive or even overwhelming, it’s an exciting and welcoming community once you step your first foot in the door. However, you must do your own research throughout the process to understand the risks involved with any type of investment.

By partnering with investment and development specialists like Forth Action Invest, you’ll have seasoned professionals walking you step-by-step through each process.

Or you can utilise the complete turnkey service. This removes the stress of UK property investment as we do the work for you.

For more information on how you can secure a return on investment each month without the workload, learn more about our ‘Guaranteed Rent Scheme’ and book a free consultation here.

*Please note this blog does not constitute investment advice. We recommend you conduct your own due diligence before making any investment, including seeking independent financial advice.