Beginners Guide To Buying & Investing In BTL Rental Properties

Is now a good time to buy a BTL rental property and become a landlord (timeless advice!)?

It’s the age old question that’s asked before making any investment. Can we really “time the market”? Is now the best time to invest in rental property?

I figured I should address the porky elephant in the room before going elsewhere. But be warned though, if you’re looking for a “yes” or “no” answer, you’re going to be sorely disappointed. However, perhaps you’re willing to endure some rational insight instead.

I’m writing this [update] in the midst of the Coronavirus pandemic (2020), because it’s made for a good opportunity to share my fundamental thoughts on “timing the market”. However, despite current affairs, I’m hoping it will make for timeless [non-professional] advice.

The current state of the world today

Regardless of what is happening in this world today or tomorrow, whether there’s an industrial revolution or a killer viral infection on the loose, there are industry sectors both booming and sinking.

The property market is highly anticipated to take a hefty kick in the nuts in the coming months due to the coronavirus (it’s not quite happened yet), so the vultures are circling. You might even be one of them.

Those that are fortunate enough to be sitting on large piles of cash are pondering whether now is the perfect opportunity to transfer some of their savings – which are currently benefiting from woefully comical returns – into property. While the global economy is burning to the ground in front of our very eyes, and while our fortunes are subsequently being slowly tortured with historically low interest rates, it seems like it’s time to strike. I can’t disagree. I fancy my chances with property, personally.

So when is the right time to investment in property/BTL?

I believe there is never a bad time to Buy-To-Let, there’s only a bad time to sell. I don’t pay any mind to the cynics nor the house price indexes. House Price indexes are usually based on national averages, they don’t count for every property in every dark corner. And if I listened to every cynic about every commodity, I would never part with my money.

The truth is, my thoughts on investing in rental property is the same as it’s always been. The whole coronavirus pandemic is a [tragic] variable in the current equation, but it will pass, and another tragedy will come, so it certainly hasn’t changed anything about my approach to investing in the rental market.

Yes, it’s possible to take advantage of a housing crash. And if you spot an opportunity I wouldn’t drag you away by the hair. But it’s not really a reliable strategy – hence why so many time it wrong – and that is why I think it’s far more important to focus on the bigger picture.

So what’s the bigger picture then? Good question.

I’ve never tried to time the market. I’ve never actively waited for a downturn or a global pandemic to take advantage of simmering prices (don’t get it twisted, though. I’m not saying I never take advantage of a choking market, I’m just saying I’ve never waited for it to happen before investing).

It’s extremely difficult to time the market right, and experience has taught me that most people are bad at keeping time, and those that managed to time it just right – more often than not – just got lucky. Or more accurately, bought a property and just waited for the housing market to take its natural course (i.e. history dictates that house prices eventually always increase over time). For that reason, I believe time spent on trying to err… “calculate” (that’s my nice way of saying “guess”) when the market has bottomed out is both futile and unnecessary.

Yes, in a slow market it’s easier to find a deal. But that’s it. It’s just easier, nothing else.

I have found that there are ALWAYS good investments available that will produce mouth-watering yields, particularly for medium to long-term investments. Moreover, someone is always looking to sell below market value, and as said, property prices have so far always increased over time.

With that in mind, I don’t think there’s ever a bad time to invest in rental property, but there’s always a bad property to buy at any time.