17/01/2022

Are You A Landlord Or A Property Investor In London

In this two-minute read,we look at the differences betweenlandlords and property investors.

What’s the difference between a landlord and a property investor?Aren’tthey the same thing? Does one rent out properties and the other sell them on?If these questions have got you scratching your head, read on.

Long term vsshort term
Keeping it simple, a landlord makesa regular income from renting propertiesto tenants. Theyareresponsibleformaintenance and managing theproperty.It’s also likely that theyhold onto the property for the long term.

Aproperty investoris trickier to define. Itmightbe someone whobuysbuildings they can add value to before selling on, orsomeone that invests in other people’s property ventures, not getting involved in the actual build or refurb.

Hands-onvshands-off
A private landlord has got a lot to do. Once they’ve bought, financed, and refurbished their rental property,they enter the wonderful world of lettings. And whilemany landlords useour agencyto find tenants and manage their property (the easiest decision in our humble opinion),many choose a more hands-on approach. So,they manage the property,takingcare of tenant enquiries,emergencies,or repairs.

Being a landlord canbeafull-timejob, depending on the number ofproperties andtenants they may have.

A property investor takes more of a back-seat role.For example, they maybe part ofa joint ventureorinvolved in anequity partneragreement. This iswhere they put up the capital and other partiesdo the work.

Property investorswith access toa large amount ofmoneymay take more indirect routes totheir investments such as property funds or trusts, buying shares in large development companiesorproperty ISAs.In each instance,they commit their cash, rather than their time.

Regularincomevsone-off payments
Aprivate landlordlooks for a good rental yield as a stable and relatively low-risk property investment. They receivemonthly rental paymentsthatshould cover mortgage costs andcould (hopefully) supplement theirincome.Over time,if they sell their rental property, they may also benefit frompriceappreciation.Nowadays, manyprivatelandlordsregardpropertyas an alternativeto a traditionalpension.

Property investors buying buildings to ‘flip’ or develop look for a one-time payoffonce they’ve sold theproperty.

If you’re interested in becoming a landlord or making a property investment, call us on020 7222 2500.

This post was written by:

Anmar Rhaman

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