Property Investor News
Property Investing in 2023
Editor Richard Bowser talks with experienced property investors and mentors Tony Law and Louise Reynolds
It was the second in a series of interviews about the property market in 2023 and beyond.
Richard asked a series of questions which got me thinking. One of which was:
‘Which strategies would you suggest could be more risky in the next year or so and why?’
My answer was this:
‘2023 and beyond is about property investing, but not as we knew it.
There are parts of the property market that are being tightened up. Given the government introduced a raft of legislation and taxation that made long term lets less profitable, many landlords have switched business models to short-term, furnished lets. These attract more favourable tax treatment and higher rental income. This has distorted parts of the market, particularly prime seasonal areas like Cornwall.
'And now the government may consider moves to clamp down on short term lets e. g. they have alluded to introducing planning permission among other things. This could create additional risk for investors in the medium to long-term.
‘Overall, longer-term development projects, where it is difficult to control all the variables, means the market can change considerably in 18 months or two years. This increases the risk.
‘In general I would also say that the ‘Get Rich Quick’ (GRQ) aspirational schemes can be inherently more risky, as they might encourage novice investors to get into situations where they will come unstuck more easily. GRQs also limit the number of exit options and having a range of exit options helps minimise risk.
‘Highly leveraged deals or strategies also increase the risk in the current financial climate.’
N.B The full article is on the Property Investor News Website for subscribers.
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