Getting into the second home market is the Holy Grail for baby boomers. Having a buy to let has come easy to them, as they’ve paid off their own mortgages and have had ample income in the decade before retirement to pump money into property. However, it is not just the baby boomers that have the opportunity to buy other properties. It can now be in the grasp of savvy Millennials too, if they play their cards right.
Building up a property portfolio is time consuming and takes a lot longer than traditional investing with a bank or capital investment company. It takes an average of 2-3 months to buy a house, and (very approximately) costs £3,000-4,000 in solicitors’ fees, surveys and land registry alone, without factoring in stamp duty. But that doesn’t mean it isn’t worth it. For a start, investing in property means you have control over your own money; it isn’t in the hands of a banker you’ve never met. It is also a solid investment. As with all investments, markets fluctuate, but some are quicker to recover, or slower to fall, than others. Crashes like the one in 2008 are not a regular occurrence. For years, there has been talk of London’s property bubble bursting due to lack of foreign investment, Brexit, or yet another recession. But unlike with stocks and shares, people need property to live, which helps the market to maintain a certain level of stability.
Property’s slow movement is exactly the reason it is a safer bet than investing in the stock market. It is also, of course, more time consuming than traditional investing, even once the property has been bought. London agents charge 10-12% to find tenants, and if you want the property managed, they will add another 10-15% so you’ll be losing 25% of the rent unless you have the time to maintain the property yourself. This makes the type of property you buy a vital consideration depending on your own circumstances; a new build will require far less maintenance than a doer-upper in the middle of nowhere. If you want to avoid extortionate fees, you will always require time….