Many would-be investors love the idea of starting their own property portfolios. One; for the obvious reason that it makes them money. Two; because it allows them to quit their day jobs and become a full-time property investor/landlord. But is this necessarily the best route to take?
I understand there will be many who embrace managing their own properties and good for them. But it is entirely possible for those who want to keep their job to do so and still invest in property. There are some benefits to staying in a full-time job whilst being a property investor in tandem after all.
Here, I will outline what they are and explain the benefits of having property as a highly profitable hobby rather than a full-time occupation.
Two sources of income
This is the most attractive point to many. Owning a property which earns you rent on top of the money you make from your job gives you two sources of income. This means that you can reinvest one set of profits straight back into your property purchases and grow your portfolio faster than you would be able to otherwise.
The idea is that you build and save your source of income to go towards growing your portfolio over time.
Letting and managing companies
If you decide to become a professional landlord and manage everything yourself, that is in essence a full-time job. What many people, particularly rookie investors, assume is that they actually need to quit their job simply to be able to manage everything. This is not the case.
What many investors choose to do is take a hands-off approach with their property purchases. This means hiring a trusted lettings agency to manage everything from finding a tenant for your property, dealing with maintenance and repair issues and doing the necessary checks and inspections.
This enables you as the investor to kick back and earn money without doing anything towards the upkeep of your property. Sure, you pay a fee to the company every month for the service. But many are happy to pay it for peace of mind they provide, and with two incomes rolling in from your job and investment, it’s a small price you can afford to pay.
More time towards identifying future purchases
With more leisure time as a result of your property being managed for you, this is time that can go towards locating the best property hotspots and developments in the country. Instead of dealing with your tenant’s faulty boiler or leaky tap, you can dedicate more time towards expanding your property portfolio by doing all the necessary due diligence and research.
Easier lending capabilities
Most lenders don’t consider income from properties towards the requirements to obtain a mortgage. Many are baffled by this, but these are the stubborn practices in place. I’m not saying there’s no chance of you getting a mortgage based purely on lenders without minimum income requirements but having a dependable source of income from a full-time job means you’ll give yourself the best possible chance of securing financing.
Job may help you when investing
Even if you dislike your job, it may be giving you important skills and knowledge that can give you an edge when it comes to buying or managing a property.
For example, I have spoken with mortgage brokers who want to invest that intricately know the requirements and process of what it takes to obtain financing. Or those as construction managers who can easily manage the refurbishments of their properties because they do it every day.
Of course, your job may not overlap with your investment goals skills-wise. But the people you work with may be like you- budding first time investors building up that deposit. You may end up investing together into properties you wouldn’t have been able to on your own and form a profitable partnership. It happens more often than you’d think- both the directors here at Tarquin Jones worked together by chance years ago and formed this company together.
You can plan long-term
Obtaining a cash-flow is vitally important, but if you don’t need the income now (because you’ve got a job paying the bills), you’re free to adopt a strategy that lends itself to more deferred gains.
For example, you can buy a property which only makes a small monthly profit, but where there’s scope to add significant value (or get significant rental uplift) by extending or reconfiguring. Even if you need to save up for a year before you can do the work and realise the gains, that’s fine: you can just put tenants in to cover your costs in the meantime.
Of course, there are many advantages to focusing solely on property, and it’s totally a question of personal preferences and circumstances as to which is best. It’s worth point out though the benefits that continuing to work has alongside becoming a property investor- albeit part time.
For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at firstname.lastname@example.org for more details.