Landlords: how to expand your buy-to-let portfolio in 2021

The intention to invest in property looks as strong as ever and while there are signs that new landlords are hoping to enter the market, there is also mounting evidence to suggest existing investors are looking to grow their buy-to-let portfolios in 2021.

When 900 landlords were questioned about their future plans by one specialist mortgage lender, the results showed 19% of respondents intended to purchase additional buy-to-lets in the coming 12 months.  

Those already managing larger portfolios were found to be the keenest to buy extra investment properties, with 31% of those with eleven to nineteen properties harbouring expansion plans. Additionally, 28% of those who manage twenty or more buy-to-lets intend to increase the number of investment properties they have.

Ways to expand your buy-to-let portfolio:

If you are an existing landlord with plans to purchase more buy-to-let properties, you may like to consider the following options:

• Buy a property with sitting tenants already in place: also known as ‘tenants in situ’, sitting tenants are long–term residents and it’s quite common for a landlord to sell a property with renters as part of the package. Homes with sitting tenants tend to appeal to experienced landlords so if you’ve already got a portfolio, you may like to add a ‘ready made’ let to your collection. As a note of caution, some mortgage lenders will not loan on properties with sitting tenants, so seek financial advice.
• Remortgage to release equity: if you want to add to your buy-to-let portfolio and have equity in your existing properties, remortgaging can free up cash to use as a deposit on a new investment property. There are specialist lenders who look after portfolio landlords who own 10 properties or more, and they can advise on matters of first and second-charge lending.
• Take out a loan: if an unmissable opportunity presents itself and you want to add it to your portfolio, a loan may be the quickest way to finance a purchase. Both personal and bridging loans are available but investors will need to scrutinise the interest rates and repayment terms to ensure the numbers stack up.
• Draw down on your pension: did you know that over 55s can withdraw some or all of their pension pot? You’ll have to weigh up the tax implications and how this may affect your future income but drawing down is one way to access a lump sum of money that can be used as a buy-to-let deposit. 
• Find a property investment partner: if you have some but not all of the money required to make an additional buy-to-let purchase, you might consider finding a friend or family member to join you in your next venture. We can advise you on the purchasing side of any arrangement, such as joint tenancy versus tenancy in common, and a mortgage broker will talk you through joint financing strategies.

If you would like any lettings, property management or buy-to-let purchasing advice, please contact our team today.