If you’ve not yet had a property portfolio review, now’s the time to speak to one of our experts. Below, we look at the five opportunities for landlords that come from a Property Portfolio Review.
If you’re considering the next steps for your property investment journey, then a property portfolio review is an excellent way to assess your options. Having a broker complete your portfolio review for you offers you plenty of benefits, with saving money as the main draw. Here, we look at the five different opportunities we can explore with you after reviewing your property finances.
1. Incorporation
If you own properties in a mix of your own name and through a Limited Company structure, you may find that incorporating your portfolio is more tax-efficient. This is because Limited Companies pay corporation tax rather than personal tax, so for landlords in the higher tax bracket, it can be a more cost-effective way to invest.
It’s important to discuss these plans with a professional tax advisor before making any property investment decisions, as incorporation can be an expensive process. During your property portfolio review, your broker can discuss how the incorporation process will work and what it will mean for your current mortgages on your personally owned property.
2. Maximise cash flow and reduce overall borrowing costs
By completing a property portfolio review, you may find that you can reduce your overall borrowing costs and maximise your cash flow. This may be through consolidating your debts with a portfolio loan, for example. With a portfolio loan, you submit one mortgage application for multiple properties, so you save with just one set of arrangement fees. Not all lenders will offer portfolio loans, so it's essential to work with one of our brokers to find the best way to maximise your cash flow for your individual circumstances.
3. Invest in higher-yielding property
A benefit of completing a review is it can help to identify where capital can be raised across your portfolio. This can then be used to fund further buy to let investments, including HMOs and other high-yielding property types.
More complex property types will typically generate higher rental yields than more ‘vanilla’ properties. HMOs, Multi-Unit Freehold Blocks, Student Lets, and Holiday Lets are highly popular amongst landlords for this very reason.
Making better-informed property investment decisions will help you identify the best properties to focus on. Quarterly reports from Zoopla and Halifax will often highlight the best regional performance by rental growth, which can help you decide where to invest.
Knowing what to invest and where should give you the best opportunity to purchase high-yielding assets into your portfolio.
4. Buy at auction
As mentioned above, finding ways to raise capital from your portfolio will help you fund your next property investment venture. Another opportunity to consider is an auction purchase.
Buying at auction can be a great way to purchase new investment properties at a competitive price. Demand for auction properties is only increasing, with a 14% increase in sales in Q1 year on year.
Given the boom in auction market activity, there is plenty of opportunity to secure a new property investment for your portfolio. Many landlords are finding properties at 20-30% below market price, meaning you could find a deal that earns you fantastic rental yields in return.
Landlords typically purchase at auction with the intention of refurbishing the property to either let out or sell on. Either way, it’s likely you will need bridging finance to complete on the purchase. Bridging loans are generally more expensive; working with our experts, we can help you to secure the most competitive bridging product and arrange the buy to let ‘exit’ finance for you.
Speak to one of our experts here to get started.
5. Strategic Review of Your Property Finances
With your broker's help, a portfolio review will allow you to ensure your property finances are in the best position possible. We can discuss whether a mix of 2 and 5-year deals will help your portfolio in the long term and look at whether now is the time to refinance any of your existing loans. This could mean raising capital to ensure your properties that attract higher interest rates due to the type or complexity are at the lowest loan-to-value, which will reduce your monthly mortgage repayments. We can also discuss your mortgages that are approaching the end of their current fixed-rate terms, and make sure we arrange the best new mortgage rate to suit your needs in plenty of time.
Your next steps
To start exploring the options for your property portfolio, get in touch with our team.
Email us at enquiry@mfbrokers.co.uk, and we’ll send you out our portfolio review document to complete.
To ask us a question or discuss any property finance plans you may have, call us on 0345 345 6788 or submit an enquiry here.
