Investment Strategies for London Landlords
It’s almost impossible to pick up the Sunday property pages these days without coming across some story on how ludicrously high London yields have become, and most landlords have questioned whether or not they should be looking to invest in London. Being a landlord in London isn’t all high yields and rolling income, however. The capital is a big place, and within in there’s a great diversity in tenants, properties and possibilities, even just from street to street.
To successfully navigate London’s property market, you really need a strategy! And, if you want to be making those headline yields of eight or nine percent, here are a few ideas to get you started…
Look to the DLR
The tube is a London landmark. It’s efficient, it’s historic but…it’s not always enjoyable. More and more commuters are turning away from typical tube-friendly locations such as Clapham, Brixton and Islington and looking East towards London’s DLR.
Finding a quality property on the DLR could be easier than you think. The development in Canada Water and Canary Wharf has spurred house builders, and provided you stay clear of expensive Greenwich, there are an abundance of quality properties on the tube map’s other blue line.
Don’t Neglect a Student Let
Student lets are something of old news in the landlord market, and the formula of buying a cheap property close to UCL, Imperial, LSE or Queen Mary and letting it to students is well known. As such, it’s done very well by many landlords and the market in London is somewhat saturated.
However, that doesn’t mean you should discard the possibility of investing in a student let. There are now many students seeking a little bit of luxury, and are prepared to pay over £200 a week to find it, as well as many students looking for cosier one and two bed studios rather than the traditional large-scale student house. Be creative!
Consider a Serviced Apartment
Lots of landlords shy away from the idea of letting their apartments as ‘serviced’. There’s lots of risk, lots of tenants, lots of administration and there are generally more costs. However, landlords that make their apartments work for them usually earn extremely well off their lets.
Rather than focusing on all the nights your service apartment could be empty, it’s worth calculating how many nights you would need to fill it to break even. Very often a three-night tenancy once a week represents a better yield than letting to a long-term tenant. Tempted?
Design and Develop
Many of the best landlords in London don’t actually do a lot of letting at all. Rather, they invest in quality developments in good areas and wait six or twelve months to profit. Better still, if you can initiate the development yourself, there are enormous returns awaiting you.
Developing property does present its own unique risks, however, and you’ll find your property is empty much of the time. You’ll need to take out things like unoccupied property insurance, rather than traditional landlord insurance, and it presents a slightly different challenge. Sites like PropertyQuoteDirect can help you find the right package for you if development is your thing.
Investing in London can be massively profitable, but it is fraught with risk and, as such, you need to think carefully about any strategy before parting with your hard-earned cash. Think it through, however, and you might just find a let that works great for you.
