For many investors and developers, keeping a property portfolio can be a challenge, and growing your portfolio can sometimes seem nigh on impossible. Here are 5 tips to consider that could help you along your way.Get property portfolio finance
For many investors and developers, keeping a property portfolio can be a challenge, and growing your portfolio can sometimes seem nigh on impossible. Here are 5 tips to consider that could help you along your way.
There are a number of things to evaluate before attempting to build up a property portfolio. Start with one, and get that right before adding to it. Hindsight is useful — think about the risk before you end up managing multiple properties you can't sustain or develop.
By pumping your profits back into developments, you'll drive the quality of your portfolio way up. The next step is to reinvest money into expanding your portfolio, as this can lead to very positive results. The main challenge here is patience, as it can take time to build these funds up — and you need to keep an eye on your cash flow and working capital.
When redeveloping a property, you should ensure you do all of your research early so you can avoid the small problems. Make sure you research the property area. For instance, if you specialise in multiple-occupancy development, know that you can fill your house - you’d never develop a house intended for students in a town with no university!
It’s simple, but take your time to understand your market before you buy or do any work – don’t buy a property just because you like the way it looks, and ensure the developments you make suit its potential tenants or buyers. Finally, get your timing right. Don’t rush into a project you have any reservations about.
Going back to your research, you should already know what's best, but if you have a number of options available it's worth speaking to an expert. There are some great options for a property once developed, with buy-to-let and HMO being the most common, and a consideration could be a straight property development. These are suited to different areas and demographics and it's worth spending time to understand what they involve and how they can work for you.
There are lots of different ways you can manage your outgoings, but for those struggling to confidently maintain the complicated finances of multiple properties, a consideration could be to wrap all of your existing loans into one. Not only is this a great way of giving you clarity on what you're managing, but it can also help you reduce associated costs like arrangement fees — giving you a clear idea of where you money is going.
If you think you’ve got what it takes, when building a portfolio of properties you could look for alternative finance options designed to help you on your way. You should also take a look at some of the property finance solutions which can help if you have this under control – as you could be missing out on a better deal.
Asset Lending & Property Team Lead
Vivek Seda is the Asset Based Lending & Property Team Lead at Funding Options. Vivek has been in the commercial finance industry for over five years, helping SMEs in the UK access over £40m of funding in that time. He also supports the business on working on corporate finance and structured transactions successfully funding Acquisitions and MBOs for businesses.
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