Did you enter into buy-to-let because a property manager told you it would be a hassle-free, arm’s length investment? Perhaps you were told that property was a brilliant way to earn passive income? Up until recently, LandlordBuyer would have agreed but the market has changed and simply owning a buy-to-let isn’t enough to guarantee returns.
Landlords need to be actively managing an investment, rather than just making an investment. A hand’s off approach may have worked in the past but it won’t return profits now and a lackadaisical approach might end up losing you money. It’s a subject LandlordBuyer’s Jason Harris-Cohen discusses with Vanessa Warwick in this podcast.
Proactive, not passive
The difference between passive and proactive property management can be explained using a simple analogy – and it’s one for sports fans. Managers rarely end the season with the same squad they started with. They’ll demote out-of-form players to the subs bench, they’ll cash in high-value players to reinvest and they’ll cut their losses by selling underperforming players who are jeopardising success.
The same approach is now required in property investment – it’s not the time to be sedentary. Landlords can’t sit back and watch house price appreciation soar, nor can they rely on cheap borrowing to make the figures stack up. Property investment is now an asset management exercise demanding constant proactive and reactive decisions. And it’s not for the faint hearted.
Emphasis shifts to the landlord
While having a property manager to take care of maintenance, keep a let compliant and tenants happy has been enough in the past, managers are rarely able to devise holistic and far-reaching investment strategies that are tailored to an investor’s individual circumstances. That has to be done by the landlord themselves.
Radical action in the form of risk assessments on every buy-to-let is required. Any property that is losing money a plan. For instance, poor yielding properties in the South East will need selling in order to reinvest in higher yielding areas in the North. Due diligence and accurate forecasting is necessary to spot emerging property hotspots that are on the cusp of house price appreciation. Big family houses may need transforming into higher yielding HMOs.
Why are landlords leaving the buy-to-let market?
LandlordBuyer is already assisting an increasing number of property investors who have performed their own risk assessments and who are proactively managing their portfolios - or choosing to exit the market. Trends we are seeing are the disposal of properties with EPCs of D or lower, the sale of properties with short leases and the offloading of buy-to-lets where a fixed-rate mortgage deal is about to expire.
Is it a good time to sell a buy-to-let property UK?
The scrapping of Section 21 evictions will be a major barrier to retaining the liquidity needed for landlords to proactively manage single properties and portfolios. With the ban looking likely in 2023, landlords may need to sell property fast to beat the introduction of the Renters’ Reform Bill. If landlords don’t sell underperforming assets now, they may be stuck with them for increasing amounts of time.
Sell with tenants in place
LandlordBuyer is helping property investors to quickly and efficiently manage their portfolios. Our advantage is being able to purchase buy-to-lets with tenants in situ, with exchange possible in seven working days. Our service is ideal for those who have identified underperforming lets and want to dispose of them at speed. LandlordBuyer is a property investor, manager and landlord that buys for cash. If you have earmarked a property you would like to sell, start with a free online valuation or contact the team.