There have been a lot of changes in the property market and, as a result, in the buy to let market over the last couple of years. That’s led to some landlords becoming despondent about the future. But it’s important to bear in mind that buy to let isn’t dead …. it’s just different …. if a little more challenging.

But then the property business has always been challenging. Over the last few years, property has perhaps been a bit too easy …. something of an artificial situation …. where making money in property has been almost as easy as falling off the proverbial log. Let’s be honest that’s not how things work in the real world. Property is a business, and any worthwhile business calls for time and effort if it is to succeed.

For some investors, the future could even offer more opportunities in buy to let, not fewer.

In the future ….

Being frank now, property still has a lot going for it as an investment. The savings interest rate isn’t going to rise much, if at all, for years. Unless someone else is footing the bill, pensions aren’t all that attractive as an alternative way to save for the future.

Take a look at this report in which we review the alternatives to property investment.

Here are some other tips that might help you survive and thrive in property in 2019 and beyond:

Brexit. In reality Brexit is only likely to affect the market in the short term. In any case, the impact won’t necessarily be negative for investors. Look out for any economic stimulus measures intended to support or boost the economy, which may have a positive impact for investors.

Cash buyers will increasingly have the upper hand. Something of an odd situation in a climate where borrowed money is so cheap. They won’t be affected by the restrictions on mortgage interest relief.

Highly geared investors are likely to come under pressure – and perhaps should look at how (and even if) they might restructure their portfolios.

It’s important to be really selective about what you invest in. Unlike the ‘golden days’ of buy to let when pretty much any property was profitable in 2019 and beyond only well chosen, well located buy to let properties will be profitable.

Yield is still important. But it’s only part of the story. Low yielding properties can still be lucrative if there are good prospects for capital appreciation …. and if they’re well managed. In the past, investors nearly always invested for capital appreciation and as a ‘safe haven’ for their money.

Be on the look out for risk factors, which could make a buy to let marginal …. or even unviable. These include: Properties in high priced areas. Types of property and areas with slow demand. Areas with too much supply of rental property – watch for competition from large scale new developments including build to let.

Buy at under market value …. or even less. As long standing investors know most of your profit is (or should be) made when you buy not when you sell.

Auctions will become more and more useful to investors looking to pick up keenly priced property. And ex-local authority or property of non-standard construction are most easily available at below market value

Look for opportunities to add value. Renovating a property, or extending it, to provide more lettable accommodation, or accommodation that will produce a higher rent (as well as add capital value), is well worth considering.

Remember, this is exactly what investors used to do to make money, before buy to let became the ‘easy’ option.

Look for opportunities to maximise yield. This is most easily done by looking for buy to let opportunities other than a single family or professional buy to let. Letting shared accommodation is one way of doing this. Student property is another type of property that offers higher yields.

Other action to take …. to ensure buy to let success in 2019 and beyond:

* Prepare and plan. Know what challenges buy to let faces, and how you will deal with them. Have a plan of action.

* Arrange your financial and tax affairs efficiently. Take professional advice where needed.

* Look at whether you should raise your rents. The ban on agency fees could see rents rising across the board, making this a very straightforward option. Tenants aren’t keen on rent rises but, as the price of everything else rises, expect to have to pay more.

* Control your costs, including maintenance and management.

Consider if self management might be right for you, to save money on agency and management fees.

* Should you actually expand your investments? Owning more properties, not fewer, could allow you to benefit from economies of scale …. including potentially more tax efficient structures such as owning through a limited company.

Oddly enough, landlords with larger portfolios are likely to be in a much better position to succeed than single property ‘pension pot’ or accidental landlords.

Above all, be positive! Doom and gloom type thinking tends to become a self-fulfilling prophecy. The property and the investment markets are changing. And, as with anything else, those who see the opportunity in change usually do best.

In property it is very much a case of as one (buy to let) door closes another door opens!

Mark Hempshell is Editor in Chief of Property Insider.

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