With inflation biting and energy and fuel prices increasing, the cost of living crisis is making headlines everywhere.
You’re probably wondering what can be done now to mitigate the rising costs, and as an experienced property professional, so am I.
There’s a growing interest in property investment among younger people who see it as a viable alternative to their pension, and with good reason.
Pension reforms may have overall reduced the amount of money in the pot, but the good news is that you can still rely on property investment. The trick is to tailor it to your individual situation.
This means taking a look at your finances and what’s feasible for you, and most importantly doing your research and using a qualified professional.
NOTE: I am not a financial advisor, and the below is by no means professional financial advice. ALWAYS get professional advice before making any big financial decisions.
For first-time investors
It’s understandable to want to hold onto your money in times like these, but with the right guidance and support, you can invest in property knowing that your money is working hard for you.
Despite the risk element, the buy-to-let market remains buoyant and a good strategy for first-time investors. What’s key if you are considering property investment during the cost of living crisis, is to remember that property is an asset.
Doing research and the all-important due diligence can really make a difference between a property that offers a small profit after maintenance and running costs and one that delivers a comfortable passive income.
One way to increase returns is to buy below market value, or look at ways of adding a value to the property. Is it possible to add an extra room while refurbishing? This is where having experienced guidance and support is essential.
Property investment companies and sourcing agents have access to a wide range of networks and can highlight areas you may not have considered before, for example where a new school or shopping centre is being built, or an area of regeneration.
For existing property owners
If you’re an existing landlord you’ll know that buy-to-let remains solid despite tax changes and recent fiscal challenges and regulations.
Supply and demand also remains strong in Scotland, with the housing shortage meaning there is simply not enough housing available, and this is where buy-to-let really comes into play.
You may be tempted to sell up and invest elsewhere but with pensions now facing reforms so cant be relied upon in the same way they were before, opportunities for those with a lower risk appetite have reduced.
So how can your existing property portfolio help you beat the cost of living crisis? Well, far from selling up, it may actually make sense for you to increase your portfolio.
As an established landlord, you will have seen the value of your properties rise since their purchase date, so considering using some of the capital tied up in that value to refinance and strategically build upon your portfolio.
Advice from a property professional
There is never a bad time to buy property, as long as you are careful to do it in the right way, at the right time and with the right team around you.
Established investors can take advice from their existing team on how they can Bricks and mortar remain one of the best means to fight the cost of living crisis, particularly buy-to-let as yields may be as high as 8% in some areas.
New investors should lay groundwork for a strong power team. With a solicitor, mortgage broker, accountant, sourcing agent and letting agent you can make decisions that carry on paying off in the long run.
maximise the earning potential of their current portfolio. This may involve refinancing or examining other property strategies.
Whether you are a new or experienced investor, always take the time to do your due diligence as this is what helps to mitigate risk.
An informed decision is always wiser. If you feel under pressure to make quick decisions before you’ve had time to fully examine the details, then it’s absolutely okay to walk away.
Conclusion
I hope you’ve found this blog helpful in deciding how you can use property to deal with the cost of living crisis. It really is a case of being “safe as houses” when you invest in bricks and mortar, as you’ll have seen following the recent Pandemic.
Sometimes it can be daunting to take the leap from having your money in a bank where you can see it, to investing in property. There is some reassurance that property represents a concrete asset in a way that stocks and shares, for example, do not.
Still, I get it. And that’s why I’m always happy to discuss any thoughts you might have. Whether you’re an experienced property investor or just starting, please feel free to get in touch. There’s no obligation and no charge.
Written by John Nicol
Founder, Ascension Property Investments
Get in touch on 01383 603091 or email me via [email protected]
