Diversification the key to buy-to-let
- 16th October 2007
- Buy-To-Let Property News
Over half of all existing buy-to-let landlords are looking to expand their portfolios in the next 12 months.
The research carried out by ARLA shows that areas of investment varies between novices and establish agents. With the more experienced investors diversifying more. David Austin, MD of Property for Life supports this theory and believes the novice landlord should look to diversify their portfolio to reduce risk.
Mr Austin went on to identify a number of areas of diversification: “Experienced landlords invest in areas where rental yields are greater with fewer void periods. Areas undergoing regeneration are particularly popular with these investors. Yet, there are many ways to diversify, not just geographical.
Diversification in the UK has become associated with investment in different locations, but this does not have to be the case. Novice investors who prefer to purchase in one area should aim to invest in different types of property which appeal to different tenant types.
For example, by buying a student flat and a family house in the same town, investors have the advantage of understanding the area whilst successfully spreading the risk and benefiting from economies of scale," concluded Mr Austin.
There are many ways to diversify, not just geographical.
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