Building a diverse portfolio

Attracting the best rewards while spreading risk to avoid unforeseen market fluctuations is the key to any successful savings portfolio. A balanced range of investments offers the optimum return over time and buy-to-let property investment is no different, as Michael Sturt of Henry Adams Lettings explains. 

“We work alongside many new landlords who are just embarking on buying their first investment property, perhaps a small starter home, but there are a sizeable number of clients who have added to their portfolio over the years. The most successful portfolios depend on the objectives of the individual landlord whether that’s focused on short term income yields, long term capital growth or a combination. 

 “Once we have ascertained the objectives of the landlord, we’ll talk through how they can build a strong portfolio designed to meet those goals but in all cases, void periods and maintenance costs will affect the final return on the investment and should be taken into consideration,” says Michael.  

“Whilst a substantial property might appear to generate a healthy rental income, the actual yield percentage based on the capital value of the property is often slightly less due to restricted demand from tenants within this price sector. The flip side however is that a substantial property will likely see better capital growth over time, meaning the risks need to be assessed and weighed up accordingly. 

“An alternative strategy of investing the same amount of capital in say, three apartments, would not only spread the impact of any void periods but will likely generate a higher overall yield thanks to the sheer volume of tenants looking for well-presented properties in this sector of the market.” 

Considering yields, initial outlay, demand and maintenance as well as potential capital growth should enable the building of a balanced portfolio. 

To discuss your property investment goals in complete confidence, whether it’s your first investment or your fiftieth, speak to Michael or request a free copy of the comprehensive landlord guide please email lettings@henryadams.co.uk or call in to your local Henry Adams Lettings office in Petersfield, Billingshurst, Bognor, Chichester, Emsworth, Haywards Heath, Horsham, Midhurst and Storrington.