40% of The Times Rich List made their wealth through property and the other 60% invested in property as a way of growing and protecting the wealth they created in other industries – so surely it pays to be a property investor?
With demand for investment properties bigger than ever, many people are starting to look into what options are available, and deciding whether to be a hands-on or hands-off investor is one of the decisions you need to make.
What is a hands-on investor?
Hands-on investors live and breathe buy-to-let, they want to be involved in all aspects of their investments, from sourcing the properties and conducting viewings for tenants, to collecting the monthly rent and dealing with all general upkeep and maintenance.
“These investors look at property investment as a full-time job,” comments Michael Cook, Managing Director of Lettings at Romans, “in fact, it’s important to realise that it’s more than a typical 9-5 job, it’s something you need to be involved in 24/7.
“Problems can occur at the most antisocial times, and as a hands-on investor you need to accept that it’s possible that you will receive phone calls about leaking taps and temperamental boilers on Sundays or in the middle of the night.”
What is a hands-off investor?
Well, quite simply, they’re the opposite of a hands-on investor; they want to reap the financial benefits of property investment without the associated stress and administration. They prefer to leave their properties to be managed by letting agents, and trust them to deal with any problems that occur on a day to day basis, collect the rental payments each month, regularly inspect their properties, and manage all aspects of the letting process in between tenancies.
Michael says: “More often than not hands-off investors have an existing career or other projects which take up a lot of their time, so it simply isn’t feasible to also manage their property portfolio. With different levels of management available from letting agents they can decide how involved they want to be, but ultimately they want to be able to sit back and enjoy the benefits without the associated stress.”
Focus on profit, not a project
Hands-off investments are in huge demand. Even with agent fees, a hands-off investment on a property in a popular location with strong rental yields can still make a sizeable profit. The appeal of this investment has not gone unnoticed by foreign investors either. A hands-off solution allows the luxury of owning high yielding properties and generating an income despite not living in the same part of the world.
Michael concludes: “Every investor is looking for something different so it’s important to carry out thorough research and talk to an investment expert before you start the process of purchasing a buy-to-let property.”
While it’s always vital to base your decision on whatever situation works best for you, there is little question that if you’re after an income generating, stress-free property then the hands-off approach is definitely worth considering.