A property investor is an individual or a business that buys property in order to rent it out. While there are tens of thousands of property investors in the UK relatively few are professional landlord who pursue it as a business opportunity.

One of the reasons it’s rarely done as a business is the considerable startup capital required against the relatively low returns on offer in the short term. If you consider that with most new buy-to-let properties it’s hard to achieve a yield in excess of 6% then there are more attractive short term investments. If however the investor is prepared to invest for the medium to long term, then buy-to-let property can provide excellent returns through a combination of the rental yield and the capital appreciation.

So what do you need to get started? In short cash, lots and lots of cash. Lets assume you want to create modest pre-tax income of around £30,000 and you’re average property will yield 5% then you’ll need to have £600,000 to invest. It is actually possible to achieve the goal will less cash, if you can buy properties below market value and/or add value to existing properties but that will depend on your abilities as a property finder and/or property developer.

To maximise the yields you achieve you will need to find properties that are in an in demand location and ensure that you minimise the number and length of any void periods (time when the property is not let). In some parts of the country holiday lets can prove to be very profitable.

As an alternative to residential property some professional landlords focus on commercial property where the yields are high and the leases longer but the void properties can be harder to rent out.

This post is part of my property business opportunities series.

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