In post Brexit Britain there is naturally a degree of uncertainty about the property market and whether or not you should invest. For investors who are looking for steady income and a reliable source of cash flow then we would advise adopting a buy and hold strategy to property. Irrespective of Brexit there is still a huge demand and supply issue in the UK when it comes to affordable housing and this is making more and more people turn to renting. Whether we activate ‘Article 50’ or not, this is the reality of the situation so holding off investing doesn’t really make a great deal of sense. Now is the time to invest in your future and buy to hold is a safe and effective way of building a strong passive income. Here are 5 reasons why we think buy and hold is a great model:
- Regular rental income – properties that are easy to rent out and bring in a regular income are far more lucrative than other types of passive investments such as bonds, ISAs, equities etc. Using a management company to look after all aspects of tenancy will also mean that you can enjoy this passive income without the hassle often associated with being a landlord.
- Good leverage – for those investors looking to build a property portfolio, owning properties that already deliver good regular income is a great way of convincing banks that they should loan you more money to do the same again.
- Good ROI – good leverage leads to good ROI. Your monthly cash on cash return goes up when you use leverage and any capital appreciation on the property boosts your ROI as well.
- Paying off the mortgage – if you have used a mortgage to fund your investment then positive cash flow over and above your mortgage payment can enable you to pay down your mortgage quicker and save thousands in the long run.
- Increasing rents – most analysts expect rents to rise over the coming years. Owning property allows you the opportunity to increase your cash flow by increasing rents, further improving your overall return on investment.
Buying properties and then holding on to them to reap the benefits of regular rental income is a smart strategy in today’s climate so if you need professional advice on what would make a good buy and hold property, contact us now on 0333 3001 888 and speak to one of our investment specialists.