How Long Does it Take to Build a Property Portfolio?

Each year, thousands of people become landlords or take on a property with the only intention of selling it on. With so many of these entrepreneurs sharing stories of profit and easy income from such investments, it can lead one to wonder how long it takes to build such a successful empire.

A white house with multiple windows on a sunny day

Here we breakdown the details of developing a portfolio and attempt to uncover just how long it can take to reach the reward.

Getting Started

The housing market is a gold mine of business investment opportunities, but deciding to plough thousands of pounds into any form of purchase will take some time.

To begin with, it’s important to research the location thoroughly to ensure that there won’t be any nasty surprises lurking around the corner.

On more than one occasion, home investors have been stung by planning disputes, unappealing landmarks and community created footpaths that lead onto their newly purchased property.

Alongside this, there could be backdated rent left by previous tenants, or you could find out that the home is a listed property and cannot be extended on; meaning any plans for expansion will be nullified.

Unfortunately, much of these checks can come at a cost and depend on local authorities, most of whom have an expansive backlog which may mean delaying the sale.

These factors often slow down the process of constructing your property portfolio, and such bureaucracy has often been a sticking point for prospective landlords. Due to the reliance on agencies and authorities it can be hard to pinpoint exactly how long this process will take, and it’s worth noting that investing in a second property does require a large amount of patience and tolerance.

 

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Immeasurable Factors

Although the housing market is a valuable business investment opportunity, it can also be unpredictable.

The 2008 recession left millions of homeowners out of pocket and the buy-to-let industry came to a near standstill.

Thankfully the market has since recovered and the industry is booming once again, but prices continue to fluctuate and so it can be difficult to garner when exactly is the optimum time to purchase a second property or become a landlord.

However, due to this instability with prices, it can also be difficult to predict the best time to buy or sell a home. This means that although you may plan to amass a portfolio by a certain date, rising prices may make this difficult for you and postpone your original strategy to a later date.

People Problems

Although thousands of buyers have seen incredible success along their journey to amassing a property portfolio, very rarely do you find one without a horror story regarding previous tenants.

Unfortunately, it is quite common for tenants to miss payments and refuse to vacate the property. This can mean landlords having to pay thousands in legal fees to force the occupiers to leave in order for them to sell the property onwards and recoup their losses.

Alongside this, there have been numerous cases of tenants causing damage to properties and costing landlords thousands in repairs. There have also been examples of tenants vacating the property amicably only for landlords to discover the extensive damage later on.

While these cases are rare and should not put you off investing in the housing market, it’s worth keeping in mind that your dream of an extensive property portfolio may be delayed simply by other people and human error.

The housing market is an incredible way for prospective investors to gain independence or increase their pensions after years of work, and there’s no denying that it has proven to be a lucrative market to those who have dared to dream.

Expert Property Portfolio Advice

Unfortunately, setting a date or timescale for when you can assemble a million-pound portfolio can be difficult due the large amount of variables involved in joining the property ladder.

There are some ways to speed this process up, of which you can read about in our ten-step guide, but for the most part, establishing a property portfolio is a lengthy procedure.

If you’d like to read more on financial advice or how you can improve your current portfolio, learn more through our blog below, or visit our advisory page here.

Article By Ben Lloyd

January 4th, 2017

Ben is the Director and Co-Founder of the Pure Group and Managing Director of Pure Property Finance.

Following a career in Barclays, where Ben was in the real estate finance team for 8 years, he decided that the market needed a more forward-thinking type of commercial brokerage so founded Pure Commercial Finance (now Pure Property Finance), the first company within the Pure Group.

Ben has extensive experience across the real estate sector and has participated in over £2bn of real estate transactions during the course of his career.

Ben oversees the general strategy at Pure Group and works with the senior leadership team to drive the Group forward. Ben is also on the Executive Committee of FIBA.

See more articles by Ben

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