How to build a successful buy to let portfolio
By Corin Vestey     9th May 2007

Would you like to use property to fund your retirement instead of relying on a company or personal pension?

I spoke to someone who has done just that to find out what budding investors need to do to retire as a property tycoon.


Madeleine Smith is a lady who has taken her retirement finances into her own hands, investing in a portfolio of one, two and three bedroom properties.
Here Madeleine explains why she chose property as the way to save for a comfortable retirement.Madeleine comments: “I invested in properties not far from my home, so can drive past and check on them regularly. I have tried to stick with properties under £130,000 and also properties that fall under the stamp duty barrier to maximise my future returns.“

“When I retire, I intend to keep my portfolio and hope to benefit from rising rental incomes, as well as obtaining further equity releases built up over time. I actually really like all my properties; I have invested in homes I would feel comfortable living in, so it is possible I could retire into one of them.”

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An inheritance got me started in buy-to-let
“I started out in the buy-to-let business when my father left me enough money for my first deposit. I had read a lot about buy-to-let in the press so contacted The Money Centre to find out more. I was given a dedicated consultant who I have worked with ever since. When I purchased my first buy-to-let, we spoke on a daily basis, and he was very patient and helpful working out figures and the best deals for my investment.

I re-mortgaged my own home and bought two more properties with the released equity. My consultant was then able to find me a better mortgage deal, so we decided to re-mortgage at the better rate. I then obtained another advance on one of my properties and added another property to my portfolio. This all happened last year, when vendors were eager to find buyers, so I was able to buy at good prices.”

“I would definitely recommend buy-to-let as an alternative way of saving for retirement. Tips I would give to people thinking about starting out are to watch property programmes, read about buy-to-let in the press and use the internet. Also get to know the area you want to invest in. I drive around a lot and look for properties for sale in good areas. I have also built up great relationships with developers and estate agents in my area, who are always flattered when I ask them for advice and are keen to give it freely.”

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Make sure you get good advice
“Also, it is important to find yourself a dedicated buy-to-let consultant. I could not have built up my portfolio without good advice to steer me in the right direction and guided me to make the right moves at the right time.

New investors should not be unduly nervous but also need to understand buy-to-let is not a solution to becoming rich over night. It is a long-term commitment, but one that should provide fruitful returns in the long run. Buy-to-let can have an impact on your lifestyle. For me it has helped me to change from working four jobs, 12 hours a day, six and a half days a week to working part-time hours which I can add to if I want.”

“Company pensions continue to have a lot of bad press, but property seems to keep on increasing in value, doubling on average every twelve years, so even if there is a lull in the market you can wait until it recovers and still benefit from rental income – provided of course that you can keep your properties filled with tenants. Investing in property means taking your financial security into your own hands to ensure your retirement lifestyle is the one that you have always dreamed of.”

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The MoneyCentre's top tips for successful buy to let
Like any investment, buy-to-let comes with no guarantees, but for those who have more faith in bricks and mortar than stocks and shares the following tips from The Money Centre can help ensure your buy-to-let investment is a success.

-DO set aside money for the unexpected - such as a void period in rent or a boiler breaking down.

-DO keep an open mind about what and where to buy. Talk to as many experienced landlords as you can and learn from their mistakes and successes.

-DO think carefully before buying a property with maintenance issues. Money you save buying it may be lost by it being empty while you’re renovating or improving the property.

-DON’T indulge your own taste in design and style of the interior or exterior of the property, as it’ll restrict its appeal. Keep it neutral and safe.

-DO be cautious about buying properties off-plan. You need to stick to a specific timeframe in order to maximise your return and developers may not guarantee a finish date.

-DO beware of companies offering cheap conveyancing. If a few pounds saved on conveyancing means a slow service you may lose the property.

-DON’T skimp by finishing your buy-to-let property with second-hand furnishings, fixtures and fittings. If they don’t meet health and safety regulations you could find yourself in trouble.

-DO be aware of the specialist insurance you need. Standard domestic insurance policies do not cover many of the eventualities that landlords face.

-DO think carefully before leaving the management of your property to relatives or friends. Buy-to-let properties need experienced management to maintain tenant occupancy and maximise returns.

-DON’T abuse the relationship you have with your tenants. Give plenty of notice before you visit and make sure maintenance problems are addressed quickly. Tenants are an essential part of your business plan and the relationship needs to be managed in a professional way.

Article produced by EveryInvestor.co.uk