But then the property business has always been challenging. Over the last few years, property has perhaps been a bit too easy …. something of an artificial situation …. where making money in property has been almost as easy as falling off the proverbial log. Let’s be honest that’s not how things work in the real world. Property is a business, and any worthwhile business calls for time and effort if it is to succeed.

For some investors, the future could even offer more opportunities in buy to let, not fewer.

In the future ….

Being frank now, property still has a lot going for it as an investment. The savings interest rate isn’t going to rise much, if at all, for years. Unless someone else is footing the bill, pensions aren’t all that attractive as an alternative way to save for the future.

Take a look at this report in which we review the alternatives to property investment.

Here are some other tips that might help you survive and thrive in property in 2019 and beyond:

Brexit. In reality Brexit is only likely to affect the market in the short term. In any case, the impact won’t necessarily be negative for investors. Look out for any economic stimulus measures intended to support or boost the economy, which may have a positive impact for investors.

Cash buyers will increasingly have the upper hand. Something of an odd situation in a climate where borrowed money is so cheap. They won’t be affected by the restrictions on mortgage interest relief.

Highly geared investors are likely to come under pressure – and perhaps should look at how (and even if) they might restructure their portfolios.

It’s important to be really selective about what you invest in. Unlike the ‘golden days’ of buy to let when pretty much any property was profitable in 2019 and beyond only well chosen, well located buy to let properties will be profitable.

Yield is still important. But it’s only part of the story. Low yielding properties can still be lucrative if there are good prospects for capital appreciation …. and if they’re well managed. In the past, investors nearly always invested for capital appreciation and as a ‘safe haven’ for their money.

Be on the look out for risk factors, which could make a buy to let marginal …. or even unviable. These include: Properties in high priced areas. Types of property and areas with slow demand. Areas with too much supply of rental property – watch for competition from large scale new developments including build to let.

Buy at under market value …. or even less. As long standing investors know most of your profit is (or should be) made when you buy not when you sell.

Auctions will become more and more useful to investors looking to pick up keenly priced property. And ex-local authority or property of non-standard construction are most easily available at below market value

Look for opportunities to add value. Renovating a property, or extending it, to provide more lettable accommodation, or accommodation that will produce a higher rent (as well as add capital value), is well worth considering.

Remember, this is exactly what investors used to do to make money, before buy to let became the ‘easy’ option.

Look for opportunities to maximise yield. This is most easily done by looking for buy to let opportunities other than a single family or professional buy to let. Letting shared accommodation is one way of doing this. Student property is another type of property that offers higher yields.

Other action to take …. to ensure buy to let success in 2019 and beyond:

* Prepare and plan. Know what challenges buy to let faces, and how you will deal with them. Have a plan of action.

* Arrange your financial and tax affairs efficiently. Take professional advice where needed.

* Look at whether you should raise your rents. The ban on agency fees could see rents rising across the board, making this a very straightforward option. Tenants aren’t keen on rent rises but, as the price of everything else rises, expect to have to pay more.

* Control your costs, including maintenance and management.

Consider if self management might be right for you, to save money on agency and management fees.

* Should you actually expand your investments? Owning more properties, not fewer, could allow you to benefit from economies of scale …. including potentially more tax efficient structures such as owning through a limited company.

Oddly enough, landlords with larger portfolios are likely to be in a much better position to succeed than single property ‘pension pot’ or accidental landlords.

Above all, be positive! Doom and gloom type thinking tends to become a self-fulfilling prophecy. The property and the investment markets are changing. And, as with anything else, those who see the opportunity in change usually do best.

In property it is very much a case of as one (buy to let) door closes another door opens!

Mark Hempshell is Editor in Chief of Property Insider.

The post Making Money In Property In 2019 …. How You Can Survive & Thrive As A Landlord first appeared on Property Insider.

Portico have revealed 5 things that landlords or potential investors need to know as we head into 2018 – from house price and rental yield statistics, and new PRA and MEES rules, to how to maximise profit and minimise voids.

1. Mortgage Interest Tax Relief Changes

Before April this year, landlords could deduct their full mortgage interest costs from their income when calculating their tax bill. Now, landlords are only able to offset 75% of their mortgage interest.

In the 2018 to 2019 tax year, this figure will drop to 50% and in 2019 to 2020 the figure drops again to 25%, until in 2020 to 2021 all financing costs incurred by a landlord will be given as a basic rate tax reduction.

What should landlords do?  While the changes are inevitable, landlords can mitigate the hit by cutting their interest costs by re-mortgaging. Buy-to-let mortgage interest rates have fallen significantly in recent years, so deals currently on the market may well be substantially better than on products arranged a few years ago. That being said, if you’re a portfolio landlord, you will have to consider the new PRA rules which we’ve explained below.

With large increases in property prices in London over the last few years, another good idea is to get your rental property re-valued. This will make your lender recalculate your loan-to-value (LTV), and a lower LTV means a better interest rate and a larger choice of lenders.

Whatever you decide to do to reduce your tax bill, it’s imperative you stay on top of your finances.

2. Utilising Airbnb To Avoid Void Periods

Cuts to mortgage interest tax relief are certainly going to cut into landlords’ profits – but add long void periods into the mix and landlords could wipe out returns altogether.

Thankfully there are smart ways to avoid voids and actually increase profits – and seasoned landlords are beginning to cotton on.

Currently there are 62,141 active rentals on Airbnb and a staggering 64% of those are owned by multi-listing Hosts, or landlords.

Airbnb is an increasing popular short-term solution for landlords (there’s an annual limit of 90 days for London Hosts), who are utilising the site to a) synchronise their tenancy to begin in a busy season where they can command a higher rent and b) avoid void periods by putting their property on Airbnb until they find a long-term tenant.

Portico offer a cost-effective Airbnb management service, Portico Host, to give landlords the flexibility of short-term letting without the hassle. A month or so before your tenancy is coming to an end, let us know and we can plan to get your property ready to go live on Airbnb. Our team can time it so that by the time you’ve utilised your 90 days on Airbnb – and earned, on average, £11,520* – we will have a tenant ready and waiting to move in.

3. New PRA Rules For Portfolio Landlords

New buy-to-let mortgage rules are hitting portfolio landlords from the end of September 2017. A ‘portfolio landlord’ is defined as a borrower who owns four or more distinctly buy-to-let mortgaged properties.

What are the new rules? Under the new rules, if you want to make an application for a buy-to-let-mortgage on a new rental property, the lender will have to look at your entire property portfolio before deciding what mortgage deal they can offer. For example, if you have four properties generating enough rent to cover mortgage payments, but one property that isn’t, your new mortgage application may not be approved by some lenders.

What should landlords do? If you’re planning on investing in a buy-to-let property, it would be sensible to try and get a mortgage agreed before October.  If that’s not possible, make sure you get your paperwork in order and keep your property portfolio spreadsheet up-to-date. If you are considering investing further but one of your current rental properties is underperforming, you may want to consider selling up.

4. New Minimum Energy Efficiency Standards (MEES)

Landlords have just over six months to ensure their rental properties meet the new Minimum Energy Efficiency Standards.

What are the new rules? As of April 2018, all buildings within the scope of MEES must have a minimum Energy Performance Certificate rating of E, or they will be illegal to rent out. A civil penalty of up to £4,000 will be imposed for breaches, so it’s imperative you make sure your rental property meets energy efficiency standards.

What should landlords do? Get an up-to-date EPC assessment on your rental property! If your EPC Rating is below E, our Property Management team can make a plan to improve the energy efficiency of the property, with help from our Portico Handyman team.

5. London House Prices & Rental Yields

According to the latest House Price Index from Rightmove, the capital saw a 3.2% annual price drop, taking asking prices to an average of £611,000.

Though this may be disheartening to investors, the price drop was primarily driven by the softening market in London’s most expensive, central boroughs, while property prices in the city’s most ‘affordable’ boroughs continued to rise.

Hackney and Southwark, two of the ‘cheapest’ boroughs in central London, both experienced a high annual price growth of 9.5% to £660,000 and 7.2% to and £630,000 respectively — the highest in the capital. Similarly, Barking and Dagenham, London’s most affordable borough, saw the average asking price rise by 5.2%, taking the average property price to £312,443.

It’s in these ‘affordable’ boroughs where rental yields are highest too; landlords can find a high 6% yield in Barking, and a 6.1% yield in Ilford and a 6.2% yield in Chadwell Health, (both in the Redbridge borough, where property prices grew 4.7% annually).

As our Regional Director, Mark Lawrinson, says, “If you want to invest successfully in London property, you need to think about both rental yield and capital appreciation. Location is the most important factor to consider; buy in areas that are experiencing infrastructure investment or regeneration, that offer healthy yields so mortgage repayments aren’t a problem. As London has proven in the past when it bounced back from the recession, it’s an extremely resilient city, so if you are buying with a medium to long-term view then your investment as a business or home is safe.”

Here’s where to buy in Zones 3 and 4 as suggested by property expert Mark Lawrinson.

Has Your Home Or Rental Property Changed In Value?

Find out if your house or rental property has gone up in value in 60 seconds with Portico’s instant valuation tool.

Guest Post provided by Portico.

The post 5 Things Buy To Let Landlords Need To Know Going Into 2018 first appeared on Property Insider.