We need to be cautious…

by | Oct 10, 2019 | Blog, Property Investment, Work + Money

I’m not one to scaremonger. In fact, this isn’t me scaremongering… so when I’m talking about caution I just want to make sure that you will be OK to weather any pending storm.

 

Think of this as you taking precautions. 

 

We know that Brexit has gone to hell in a handbag. Whatever happens, we are speeding towards deadline day. 

 

Regardless of the  fallout we have to make sure we can handle changing market conditions in a calm and collected matter. 

 

I urge you to consider the following:

 

    1. Can you handle an increase in interest rate to 7% if for any reason you fall out of your low rate fixed term and can’t find an immediate low rate replacement? Plan now for this situation

 

  • Decide on your worst-case scenario rent for if your properties… what could you handle on a monthly basis until the market picks up? You could then put in place a worst-case scenario plan. For example, say market rent is £1,000 pcm, but worst-case scenario I have to accept a rent of £700pcm. I would sign a 12-month rental contract at £1,000pcm but with a 5 month rent free… so I’m still showing market rent, but have adjusted it to reflect the lower rent. That wat at month 12 the rent rolls over onto the regular market rent.

 

  1. Make sure you have a contingency pot saved for 2-3 months of voids… you know, just in case!

 

The reality of the situation is that if you plan for the worst case… 9 times out of 10 it just won’t happen and everything will be hunky dory.

 

But if we see a few bumps in the road. You’ve got a plan. You can hold your nerve. Ride the wave and get back on track when things iron out. 

 

That’s the way to handle uncertainty. Never ever make decisions in a panic, always make sure you are in control and you will always end up on top.

 

Are you ready for whatever the next few months has in store?

 

Natasha

 

P.S Just to put your mind at risk that I don’t think that the property market is falling to pieces I’m currently remortgaing my portfolio at a higher rate and taking a little bit of money out. It’s definitely not all doom and gloom and the banks have so far been happy to oblige my requests… but I also have those 3 questions answered, just in case!