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.

Here we breakdown the details of building 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 land marks 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 also rely on local authorities, most of whom have an expansive backlog which may mean delaying the sale.

These factors often slow down the process of building up 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 home owners 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 when the best time to buy or sell a home is. 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 in regards to previous tenants.

Unfortunately it is not uncommon for tenants to miss payments and refuse to vacate the property, and 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.

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.

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 Tom Lee

January 4th, 2017

Tom heads up the development division at Pure. He has over 20 years of experience in the financial sector and since joining Pure in 2013, has become an integral part of the business’s growth and direction.

Tom has a wealth of experience providing debt advisory on large, complex deal structures for developers and investors across all asset classes, throughout the UK.

He has built a strong network across the property and finance sector, which enables him to provide a total package solution to his clients and contacts, with whom he has built long standing relationships.

See more articles by Tom

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