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  • Buy-to-Let

    Future Proofing

    So what is Future Proofing?

    Have you heard the saying “If you keep doing the same things you get the same result” or “If it’s not broke don’t fix it”? It’s very likely that you have but why would you change something that works or why would you change a winning formula anyway?

    That’s where Future Proofing comes in.

    It’s good to be successful now, great to be making money, profitable and doing everything right but what about tomorrow, what about the future?

    CHANGE BEFORE YOU HAVE TO

    Unfortunately no matter how often I polish my Crystal Ball the results are always the same. That doesn’t mean you can’t make efforts to predict the future or at least predict trends. Whatever work you put in now to do so will undoubtedly benefit you in the long term. It’s no good waiting for the future as by the time it’s here it’s too late to change.

    Almost all of us have started investing in property for a reason, we have a plan or a goal. I wonder how many of us are still working to that same plan. How many of us can even remember what that plan was? It wasn’t a crazy plan, it wasn’t unachievable, we may have just lost sight of what that plan was.  So the first thing you need to do is revisit that plan or make a new one.

    If you jump in a cab and don’t tell the driver where you are heading, chances are you will never reach your destination.

    What are you buying? Where are you buying it? Why are you buying it? Perhaps your original plan was to purchase 10 in the first 5 years. Now you have 12 so you are ahead of target aren’t you? 12 what? 12 flats, 12 houses, 12 HMO`s, 12 bungalows perhaps. All in one area all in two areas and so on. You have been active, nobody can deny that but have you bought well? Could you do better? Would you have been better off buying houses not flats? Would you have been better in a different geographical area? Have you got too many in one area? What happens if the market drops where your property is concentrated?

    How much is it costing you per month in interest? Have you made sure that any sudden increases in interest rates won’t affect you? Do you know what it would cost per month if interest rates went up by 1% across the board? Would you still keep all of your property if they did? Would it be viable to keep all your property? Would this make some of your property unattractive? If your intention isn’t to pay down the debt why wouldn’t you look at a fixed rate and take that uncertainty away? Would you like to be in more control of your finances for a set period of time?

    Don’t be afraid to dispose of property that doesn’t fit your plan. There is no shame in selling a property that no longer works, for whatever reason that might be.  It may be that the area has become run down, the number of voids is higher than others, there are a multitude of reasons. Don’t get hung up on any of the numbers but the ones that really count. It’s not about how many you have its how profitable they are. Owning more property doesn’t necessarily make you more profitable don’t bases “success” on the number of properties you have it isn’t a good measure.

    What do we know about the future? What can we certain of? Well I think we know that each and every one of us wants a roof over our head so the demand for property in some form should always be there.

    One thing perhaps not being considered enough at this time is the need for housing in retirement. As the population gets older, lives longer and hopefully has disposable income where will they live? Downsizing is the preferred option but to what? Renting suitable property is becoming more attractive. This is going to be the last time many of these people move so it’s an opportunity to be considered.

    Is there an area where you know that demand is consistently strong but the supply is equally scarce? What are the local plans in and around areas you are considering? What future has already been planned? These plans are prepared years in advance and knowing who where and when is essential. No point buying close to a university when a new larger university is being built on the outskirts of the town in the future for example. How many of us know the town planners? How many of us would recognise any of the Council members walking down our street? Why not?

    Public transport and amenities. The closer you are to these the better. Again, what plans are in place for new roads, bypasses, flyovers, bus routes, rail routes and so on? If nothing else, every potential tenant will have questions about all of this so why not tell them before they ask.

    Try and think outside the box. Look at the areas where there are proposed improvements, proposed developments. Look at run down areas in towns that are ripe for redevelopment and improvement where the local councils are undergoing reviews of what can be achieved etc. Getting in early is essential.

    There is however something you can do today to Future Proof your investments. Review your portfolio. Talk to someone about your first plan and maybe your new plan. Find out if the plans you had or have are relevant anymore. Take a look at what you have and decide if it is going to help you reach your goal. If it isn’t how can you change it? What finance do you have in place at this time? Can you borrow more but pay almost the same? Can you fix your rates for 2, 3 or 5 years? Could you release equity and start to buy the property you want and need?

    Related content:

    Unlikely signs an area is ripe for property investment

    Creating a property business plan

    21 questions to ask at an investment property viewing

    What you can do next:

    ​**Book your FREE portfolio review and health check with Property Tribes Financial Services**

    Ask these questions and get them answered and start to think about tomorrow today

    Call Mark Alefounder. Property Tribes Financial Services on 07717647928 and find out  

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    Mr Mark Alefounder

    Mortgage & Protection Broker

    Optimum Independent Financial Advisers

    Mobile 07716 647 928

    Tel: 01206 366700

    http://www.optimum-ifa.co.uk

    The financial regulator, the ‘Financial Conduct Authority’ designates that there are two different types of financial advisers, ‘independent’ and ‘restricted’. The status of an adviser firm will affect the type of advice that is given. A restricted adviser firm can only recommend certain products or product providers, whereas an independent adviser firm, such as Optimum, is able to consider and recommend all types of retail investment products and/or providers that could best meet clients needs and objectives. Optimum Independent Financial Advisers offers genuine unbiased and unrestricted advice.

    Your home may be repossessed if you do not keep up repayments on your mortgage.

    Optimum Independent Financial Advisers is authorised and regulated by the Financial Conduct Authority

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    Thanks for posting this Mark. It's very helpful at such a time of change for landlords and the property market.

    I think landlords are going to have to become even better researchers and target specific areas and property becoming experts in niche strategies.

    We have some resources that help:

    5 ways to research a property deal without leaving your house

    Which property type offers the best potential for capital appreciation?

    Which property type offers the best potential for yield?

    Top 10 Property Tribes resources to learn how to find property deals

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    I am a strong believer in "if it ain't broke don't fix it".

    I also believe in planning ahead, but leaving enough flexibility to adapt.

    I know what my original plan was and how it has changed.

    I started off planning to invest in property to earn more than the pittance the banks were paying, and to stop the Job Centre from hassling me to apply for jobs I didn't want. That was refined to start buying a couple of 2 bed terraces in the area where I grew up. The second purchase changed to a 3 bed semi that was cheap as it was a forced sale.

    Then I added a commercial property. Then after I had been a LL long enough to get a mortgage despite having no job, I bought anouther semi and an house to live in whilst letting my old flat and gathering extra capital gains from it for a few years.

    To do that I had to sell some shares, but limited the amount to avoid CGT, so the next year I sold some more and bought two more properties, one having excellent transport links, but being in a run down area for which there are plans to redevelop part (the demolition has already been done). After C24 was announced I reviewed my plans. My current income is not high enough for me to be affected, but I would like more, and will have more in 2019 when I turn 60 and can take my private pensions without penalty.

    So I decided to make future purchases through a company, the first being in progress now. I hope to get one more next year using the last of my american shares, and some other savings.

    ​In 2019 the fixed period on the mortgage on the flat I used to live in will expire and I plan to sell it then. That will clear my largest mortgage and one other on current values. If proces in Reading rise as predicted then it will clear another. With the tax free lump sum from the pensions I hope to pay off the other and end up with all the properties in my name being mortgage free, with the company holding the mortgaged properties.

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    I must admit I stick to what I know and it works

    I think most LL plan ?? and look for longer term I know I do but If I have learnd anything from the past nine months is dont bet your shirt on it

    We have all see huge changes and there will be more to come  i the future and im not sure all will do our  market any good in the long run

    So I am now picking a investment market with a spread of invstents

    LImited Co Investment

    Good Old BTL Investment

    Pension Planning

    ISA investments

    Stocks and Shares

    I have always been invested 90% of my weath in Property But for investments in the future I will look at lots of differant routes


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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    I think if the property is bought at a reasonable price, has potential for uplift/enlargement that will outweigh the costs and is in a reasonable area with a variety of different tenants who will be interested then there's not much more an investor can do other than make sure they are getting a large % in rent higher than the costs!

    That's my philosophy, along with not over-stretching yourself. Who wants/needs 10 properties when 3-4 high yielding properties can bring a better return???

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    With 3 high yielding properties you would see a 33% reduction in income if one was void/tenants stopped paying.

    with 10 properties that figure drops to 10%.

    self insurance!

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