I have a friend, a long-standing landlord of much experience, who once gravely pronounced to me that the key to success as a buy-to-let landlord was simply to “stay let”. He meant that the important thing when owning investment property was to minimise void periods and ensure a rental stream was constantly rolling in.
As it goes, that is of course true, but it does not really tell you much about how to succeed as a landlord. It’s rather like telling someone who is a novice snooker player that the way to succeed at the game is to “pot all the balls”, yet gives little clue as to how you go about this.
Snooker, though, can offer some useful insights about how to truly succeed in the world of property investment. For as every snooker player knows, the key to winning is not just by potting a single ball but thinking in advance about where the cue ball is going to end up after the pot. You need not just to make a single pot but make sure you can manage the pot after that, and the one after that, in a progressive strategy.
Look after it?
The same is true for investment property, where you have to think not just about letting the property once, but repeatedly as you proceed into the future. One of the things I always consider when I let a property is where is the property is likely to end up when the lease is over. Are the people moving into it likely to look after it and make it attractive to other potential renters if we have to do viewings before their rental term is over, smoothly linking us from one renter to another?
Is the proposed lease going to expire at a time of year when we will find it easy to find a replacement? Or will it leave us stranded in some dead zone – the run-up to Christmas is notoriously quiet – where we will have to wait weeks or months before anyone else is likely to want to take on a new lease?
In other words, I’m thinking not just about one “pot”, one rental period, but where I am going to “come off the ball” afterwards and line up my next rental period, while always trying to ensure the property is tenanted by those who will look after it, nurture it, if indeed not add to its appeal. I’m trying to “pot all the balls” but I’m using a calculated strategy to do so.
The long game
As any investor will tell you, property is all about playing the long game, not thinking about what you can eek out of a property in a year, but how you can carefully husband your investment over 20 or 30 years. Your frame is a “time frame” and during that period you are going to be asked to make potentially a score of “pots” (lettings), one leading on seamlessly from the other.
Everything in property investment requires this kind of long-game snooker mentality, where even before purchasing a buy-to-let property you have to consider not just whether you can let it now, but where the area in which you are purchasing is generally headed and what the long-term market for the property is. Are you still likely to be able to let it in five years, 10 years, 15 years? Will it grow as an investment as you proceed from one letting period to another? Do you have the stamina to keep going with the management of such an investment?
If the answer to all these questions is “yes”, then you are ready to cue off and start “potting all the balls”. But your success as a property investor is likely to be determined by the long-term strategy, skill and experience you acquire as you guide your investment through the time frame of your life.
Damian Flanagan is a property developer, writer and critic.