BTL, R2R, HMO, SA - Which property strategy should you choose?

 

Time flies – the first month of 2021 has passed by very quickly.

If you haven’t given up your new year’s resolution of starting property investing this year – I want to congratulate you!

So which strategy have you decided to focus on?

In my last week’s Live Q&A session – I got asked one question, which was very close to my heart 7 years ago, when I first started the property journey.

 

-               -      ‘Which strategy is best for me? BTL, R2R, HMO, SA…?’

 

So maybe you have just figured out what these acronyms mean, and you are starting to wonder which one you should actually pick. Because we all have a busy life and we can’t do everything.

I’m lucky enough to have done all these strategies myself and here’s my honest opinion.

BTL

Buy to let is the most fundamental (and effective) property investing strategy out there. It’s great for people who are new to property and haven’t had much experience. It’s best for those with some money and wanting a good return from their money. Easiest to start with.

R2R

Rent to rent is a strategy that requires a little bit more effort than BTL in terms of managing the property (but with under 5 properties this is negligible). This strategy doesn’t require much money invested. 3-5k is all you need to get started. If you have the skill to negotiate free rent period, you potentially don’t even need that 3-5k. So R2R is great for those who are committed to using property to generate an extra income stream, but don’t have much funds or don’t want to use own funds.

HMO

HMO can generate very good returns and cash flow. But it requires a bit more skills and experience, on managing properties, complying with regulations, and even potentially doing small development work to add value. More risk and capital involved. May not be the easiest strategy for someone completely new to property.

SA

Serviced accommodation is a great strategy for short stay travellers for fun or business. It’s not the best timing for this strategy before the world travelling gets back to pre-COVID level.

 

In summary, these strategies are all great cash flow strategies except that SA is difficult to implement due to COVID. If you are less experienced but have savings, BTL is easy to start with. If you are less experienced but no savings, R2R is the best strategy for you. If you are a bit more skilled, HMO can get you higher returns.

Ultimately it’s up to yourself which strategy you choose. Pick one close to your heart and gut. Also remember that investing in property does require some resources from you – whether it’s your time, money, effort, or skills. Decide on which resource you have and are willing to put in.

 

Keep up with your new year’s resolution!

Emma xx

* Want the step-by-step action points, tools and scripts, to build an extra £2000/month income through property within 6-12 months? – CLICK HERE to book a free strategy session with me.