Podcast Summary
Weighing the benefits of staying local vs diversifying investments: Consider a balanced investment strategy, investing in fewer, higher-value properties in desirable locations or spreading investments across multiple, lower-value properties in more affordable areas to mitigate risk.
The listener, who owns two successful HMO student lets in Cornwall and is considering investing in another HMO as a limited company, should weigh the benefits of staying in a familiar location versus diversifying investments in more affordable areas. While the listener enjoys managing and maintaining their properties and tenants, they are concerned about the amount of capital they are tying up in one location. The speakers, Rob and Rob, acknowledge that many of their best investment opportunities are in areas further north, where property prices are more affordable. They suggest considering a balanced investment strategy, potentially investing in fewer, higher-value properties in desirable locations, or spreading investments across multiple, lower-value properties in more affordable areas to mitigate risk. Ultimately, the decision depends on the investor's personal preferences, goals, and risk tolerance.
Stick with what you're good at and enjoy: Despite potential higher returns, staying in a familiar and enjoyable investment area could outweigh risks if market remains stable.
If you're currently successful in a specific area of property investing and enjoy the process, it might not be worth changing even if another investment strategy could potentially yield a higher return. While diversification is important to mitigate risk, staying in a familiar and enjoyable area could outweigh the potential benefits of a riskier investment. However, it's essential to be aware of any potential market changes that could impact your investment negatively. In this case, the speakers suggest that if the student market in your area remains stable, continuing to invest in student HMOs could be a good choice.
Regularly review and reassess investment strategy: Consistently evaluate your portfolio annually, consider diversifying once goals are met, and remain flexible to adapt to changing circumstances for long-term success in property investing
It's essential to regularly review and reassess your investment strategy as your financial situation and goals evolve. Initially, focusing on a specific strategy, such as Houses of Multiple Occupancy (HMOs), can be beneficial for reaching your income objectives. However, once those goals are met, it may be wise to consider diversifying your portfolio to maintain flexibility and adapt to changing circumstances. The key is to consistently evaluate your portfolio every year and determine if your current approach remains the best fit for your evolving goals. This flexibility to pivot when necessary can help ensure long-term success in property investing.
Rising Area: Wissenshaw in South Manchester: Proximity to Manchester Airport, great transport links, and employment opportunities make Wissenshaw in South Manchester a rising area for investment. However, the choice of investing in ex-council properties is subjective and it's recommended to hear from experienced investors.
Wissenshaw in South Manchester, despite not having the best reputation in the past, is an area on the rise due to its proximity to Manchester Airport, great train and road links, and employment opportunities. Its location near desirable areas is driving improvement, making it a worthwhile investment opportunity. However, the choice of investing in ex-council properties in this area is subjective and it would be beneficial to hear from someone who has actually invested in such properties. Rob, who has experience in this area, can provide valuable insights.
Ex-council properties: Lower growth potential but higher yields: Ex-council properties offer higher yields and decent rental opportunities but have slower growth potential compared to non-council properties. Investors should consider their objectives before investing.
Ex-council properties, while they may not have the same potential for capital growth as non-council properties due to the stigma attached and their perceived ugliness, can offer higher yields and decent rental opportunities if purchased in the right area. Councils have improved their reputation as property managers, but potential investors should be aware of the slower growth potential. Private companies also have their fair share of poor property management records. Ultimately, the decision to invest in ex-council properties depends on an investor's investment objectives. If the primary goal is to maximize long-term capital growth, then ex-council properties might not be the best choice. However, if the focus is on yield and decent rental opportunities, then ex-council properties can be a viable investment option. Remember, always conduct thorough research and due diligence before making an investment decision.
