Colour Investments Property Investment

There has been a definitive change in the buy-to-let market conditions. This is due to the tapering of lending products caused by the turbulence of high-risk lending over the last five years. However, it is not a time to necessarily worry about property investment. In fact, if you are a scrupulous landlord and have balanced your portfolio correctly, this is exactly where an experienced investor has the opportunity to take advantage of a tumultuous market. Effectively there are two main concerns to consider firstly what considerations to take on board regarding your present portfolio and secondly how to add to that portfolio:

1) What to do with your present portfolio of properties (if you have any)
It is 100% a buyer’s market out there at the moment. On that basis it’s not a great time to sell and undoubtedly, bar a few isolated city centre areas, it is advisable to hold on to your property. As a long term appreciating asset property will always go up and as long as your properties are balancing in terms of mortgage payments vs. rental income it is the best idea do keep hold of them. However, if you are in a situation where it is necessary to re-mortgage and you really cannot find a rate to keep your books balanced it may be time to consider cutting certain losses and cashing in on investment in order to facilitate other acquisitions.

2) How to expand your property portfolio
Simply, ‘cash is king.’ The market is extremely edgy and many vendors that have been on the market for a while or new build developers are offering extremely good discounts. For instance take our BBC site which is due for official release by estate agents on the 24th April, 2008. We have a 8% pre-release discount which in a different market would be unheard of. On this basis if you are buying you have the leverage to buy with a good solid discount from market value.

Paragon Mortgages (who specialize in Buy-to-let mortgages) have quoted a 2.4% rise in rental income over the month of February. With lots of 1st time buyers renting instead, the demand is now outweighing the supply for properties and therefore rents are on the way up. Therefore hold onto your present portfolio and buy only reputable city centre areas that will rent easily and cover your repayments. This strategy will give the landlord the reigns in what some people may consider to be a unstable market .