Skip to content

How to Build a Property Portfolio (UK) – 10 Essential Steps

Don't miss out on the best new investment deals. Enter your details now to sign up to our mailing list and receive exclusive information straight to your inbox.

    Everything You Need to Know About Maintaining a Property Portfolio

    Wondering how to build a property portfolio? Well, you’ve come to the right place!

    Whether you want to know how to build a property portfolio from nothing or are looking to add to your existing assets, this guide offers expert advice for developing a lucrative and long-lasting property portfolio.

    Before giving you 10 simple and actionable steps for building a buy-to-let portfolio, we’ll take you through the very basics of property portfolios and what it takes to become a successful property investor.

    So, if you want to know how to build a property portfolio in the UK, are wondering how to start from scratch, or want to find a functional property portfolio for sale UK – we’ve got you covered.

    We’ll even look at a brief property portfolio example with some important insights into the current buy-to-let market to help you on your way.

    FAQs addressed through this 10-step guide:

    • What is a Property Portfolio?
    • How to Build a Buy-to-Let Portfolio?
    • How to Grow Property Portfolio?
    • How to Start a Property Portfolio with 20k, 50k or 100k?
    • How to Build a Property Portfolio UK – Example

    So, keep reading for 10 essential steps to building a successful and long-lasting property portfolio.

    Secure 15% Deposit

    Only 15% deposit needed now, with nothing else to pay until February 2025 on luxury 2-bed apartments.

      House model on a stack of notebooks

      What Is a Property Portfolio?

      Before building a successful property portfolio, you need to understand what exactly this is as well as the steps and finances typical of the investment process.

      In simple terms, a property portfolio is a selection of investment properties owned by a group of people, an individual, or a company.

      Building a property portfolio in the UK means purchasing several buy-to-let investment opportunities to generate a significant return on investment – more so than you would with just one property.

      By purchasing different properties in a variety of areas, investors can ensure steady returns through a rental income from one property even if another is without a tenant or enduring challenging market conditions.

      Those who want to know how to start building a rental property business and turn their buy-to-let efforts into a full-time career will typically need to own a sizable portfolio of properties.

      Importantly, when starting a property portfolio, the buy-to-let market is often the best place to begin as the income you make from your first rental property can provide you with the means to invest in another.

      This will kickstart your journey to building a property portfolio that is diverse and versatile enough to withstand difficult market circumstances and bring you lucrative, long-term returns.

      Huge £25,000 Savings

      Discount is now available on completed Greater Manchester apartments.

      Young people work from home

      10 Essential Tips For Starting a Property Portfolio

      How to build a property portfolio in 10 steps:

      1. Make Sure You’re Financially Ready
      2. Identify Your Goals
      3. Research the Best Property Investment Areas
      4. Start Small & Expand with Your Earnings
      5. Know Your Target Tenants
      6. Diversify Your Portfolio
      7. Choose Hands-Off Investment
      8. Have an Exit Strategy
      9. Invest in Off-Plan Property
      10. Avoid Buy to Let Mortgages where Possible

      Request Virtual Tour

      Receive the virtual tour for this 2-bedroom apartment today.

        A woman's hand holds a coin to manage money and Plan your savings to buy the best home for your family, ideas for savings, growth, economy, business and investing.

        1. Make Sure You’re Financially Ready

        So, what amount of money does it take to build a property portfolio, and how much can be earned?

        Understandably, when considering building a buy-to-let portfolio, you must ensure you’re financially ready to make your first purchase.

        This may seem self-explanatory, but many people end up in serious financial difficulty, swamped with repayments after trying to build a property portfolio too quickly and with insufficient funds.

        Starting a property portfolio can be expensive, and there are a lot of ongoing costs involved that you need to be aware of.

        In the UK, properties are currently valued at an average of around £288,000, according to the latest UK House Price Index. When building a property portfolio, however, there are ways to manage and mitigate costs.

        These include investing in off-plan property and more affordable buy-to-let areas, discussed later in this blog.

        For examples of buy-to-let property prices in key UK markets, click the link or simply scroll to the bottom of the page.

        Keep Track of the Market

        Keeping an eye on current market values and future forecasts is essential when considering how to build a property portfolio and deciding when the best time to invest is based on personal financial circumstances.

        Following a brief decline in property values this year, Savills predicts prices to rise by an average of 17.9% over the next five years. This means 2024 could present a unique opportunity to make an investment for below-market value before property prices increase significantly.

        While building a property portfolio can become more affordable as you begin earning rental incomes from multiple properties, it’s important to realise you could be spending significant funds to start your property portfolio.

        Therefore, it’s important to take the time to come up with an affordable and sustainable property strategy when it comes to your investment decisions.

        You’ll also need to factor in ongoing costs involved with buy-to-let property purchases.

        These may include:

        • Stamp duty tax
        • Income tax
        • Letting agent fees
        • Maintenance costs
        • Ground rent
        • Capital gains tax
        • Mortgage payments
        • Landlords’ insurance

        You can find out more about landlords’ insurance, stamp duty, letting agent fees and other costs involved with UK property investment in our ‘How much money you need to Invest in UK Property’ guide.

        Property is also subject to various regulations, which can see new developments or proposals that could affect your budget.

        For example, the introduction of new EPC regulations in 2023/24 has seen developers and landlords incorporating efficient, energy-saving technologies into their plans in order to ensure that they don’t incur any fines or lose their ability to earn rental income from their properties.

        You can find out more about EPC ratings and how to future-proof your property in this article: ‘What do investors need to know about energy efficiency?

        Buy-to-Let Investment Guide

        Want to become a successful buy-to-let investor? Get our free investment guide today for all the latest tips!

        Download Guide Guide - Buy to let investment guide

        Liverpool Investment Guide

        Invest in the UK's most popular property market. Check out the ultimate Liverpool Investment Guide 2024!

        Download Guide Guide Liverpool Investment Guide
        Financial,Goals

        2. Identify Your Goals

        The second step in building a buy-to-let portfolio is clearly identifying your goals and determining what type of investor you want to be.

        In most cases, investors will use the returns they receive from property to support their primary income or build an extensive portfolio, the management of which will become their primary occupation.

        Your UK property investment goals will outline precisely what you want from your investment and, in turn, how to start a property portfolio.

        There are many ways to enter the buy-to-let market and build your portfolio, but your route will depend on your goals and financial circumstances.

        For example, listing tenanted properties can make a significant investment and provide a high-earning passive income. However, having multiple tenanted properties can be costly and difficult to manage.

        Therefore, it’s essential to have clearly defined goals, as they will directly impact your investment strategies.

        So, when you are deciding how to build a property portfolio, ask yourself:

        • How quickly do you want a return on your buy-to-let portfolio investment?
        • Do you have your eyes on retirement, or are you just looking for an extra regular income source?
        • How long do you want to keep growing your buy-to-let portfolio?
        • What kind of investor do you want to be?

        These questions are an essential starting point for building your property portfolio and the type of properties you choose to invest in.

        For instance, if you’re planning for retirement and are willing to keep your investment funds locked away for 10 years or more, starting a property portfolio with residential properties or investing in short-term letting is an intelligent choice, as historically, these properties see the highest levels of capital growth.

        This is a growth-focused strategy and is traditionally one of the most assured and lucrative methods when it comes to building a property portfolio.

        On the other hand, if you’re looking for a short-term income-focused strategy, student investment property may be ideal, as it provides regular and steady rental returns.

        In short, before you begin building a portfolio in the UK and purchase your first property, you should take some time to think about your goals and the investment strategies that work best for you.

        RWinvest Investment Finder

        Find the Perfect Investment for you.

          What's your investment objective?

          Minimum investment of £40,000

          What's your estimated budget?

          What areas are you interested in?

          What size property interests you?

          Your exclusive brochure is ready!

          Bold street in Liverpool

          3. Research the Best Property Investment Areas

          The third step in determining how to build a property portfolio is knowing where to invest.

          Importantly, not all UK property investment areas are the same, with substantial regional variations in price, growth potential, rental demand, and more, making this one of the most essential steps to successfully building a property portfolio.

          When building a property portfolio then, you should always research the best investment areas before making a purchase, keeping the following factors in mind:

          • Affordability
          • Monthly Rent
          • Rental Yields and Returns
          • House Price & Rental Growth Potential
          • Population Demographic & Rental Demand

          If an area meets all these criteria, it is likely one of the best places to start building a property portfolio.

          In terms of value for money when building a property portfolio, UK markets that investors should seriously consider in 2024 include the Manchester and Liverpool property investment markets of the North West.

          According to Savills, both cities are set to see house prices increase by around 11.7% by 2027 – the highest predicted growth in the UK, making them two of the most promising areas to build a property portfolio in terms of capital growth.

          They also have some of the highest rental returns in the country, a key point to consider when strengthening, diversifying, and successfully building a property portfolio in the UK.

          To learn about the best places to invest in property and where you should build a property portfolio in the UK, we have a complete top 10 guide to help you.

          But for now, here are some key UK investment areas to consider:

          • Liverpool
          • Manchester
          • Birmingham
          • Newcastle
          • Leeds
          Concept of business boost and growth. Superhero businesswoman flying off of springboard to business chart top

          4. Start Small & Expand With Your Earnings

          Being able to walk before you can run is particularly true of property investment and building a property portfolio that can withstand market challenges and won’t jeopardise your finances.

          It can certainly be tempting to start expanding your portfolio right away, especially when there are so many great investment opportunities on the market right now, but starting slowly when building a buy-to-let property portfolio is a much more efficient long-term plan.

          In this sense, starting a property portfolio with one or two solid investments is a good initial strategy.

          This will allow you to start earning returns while familiarising yourself with the world of UK property investing.

          Then after a while, you can branch out and potentially reinvest your earnings into another asset and start slowly developing your property portfolio.

          The main thing is not to rush and look to expand your portfolio quickly by buying multiple properties without first learning the ropes. This can backfire significantly when not careful and it’s not the recommended way to start building a property portfolio.

          Instead, take your time, avoid getting into debt or being forced to refinance a property, and develop a good investment strategy that will allow you to build a dynamic property portfolio over time.

          This way, if something goes wrong, you are at less risk than if you were to invest in multiple properties at once, which could lead to serious financial difficulty.

          If you’re ever in doubt, always be sure to seek financial advice from property experts or financial advisors before starting the process of building a buy to let portfolio.

          Buy-to-Let Investment Guide

          Want to become a successful buy-to-let investor? Get our free investment guide today for all the latest tips!

          Download Guide Guide - Buy to let investment guide

          Liverpool Investment Guide

          Invest in the UK's most popular property market. Check out the ultimate Liverpool Investment Guide 2024!

          Download Guide Guide Liverpool Investment Guide
          How to Buy an Investment Property With a Partner

          5. Know Your Target Tenants

          One of the most important things that property investors can forget to focus on when purchasing buy-to-let property is the target tenant.

          It’s easy to get wrapped up in property marketing and the potential earnings from your buy-to-let investment to the extent that an essential factor often gets neglected – who the property will be tenanted by?

          Identifying the right tenants and ensuring they’re satisfied with where they are living is crucial to building property portfolios that can bring a steady cash flow through regular rental income and be less susceptible to void periods. This will also help you to avoid stressful and time-consuming disputes with tenants.

          Essentially, understanding current tenant needs and what they look for in a rental property is one of the most important things to consider before you start a property portfolio.

          Following the COVID pandemic, tenant demand has changed significantly as they now look for different facilities when selecting a property, according to Benham and Reeves.

          For example, with more people working from home or in a hybrid schedule, many tenants view fast broadband and outside space as essential features of a rental property.

          New builds are also highly popular with younger tenants, so aiming to add new build properties to your portfolio is a good way to ensure long-term tenant demand.

          So, when considering how to build a buy-to-let portfolio that attracts and maintains a steady flow of tenants, these important points should be kept in mind, particularly in areas with a high population of young professional renters.

          Best Places to Invest in 2024 Guide

          Discover the hottest UK locations for buy to let investment in 2024.

            Human hand stacking coins over a black background with hexagonal golden shapes. Concept of investment management and portfolio diversification. Composite image between a hand photography and a 3D back

            6. Diversify Your Portfolio

            The best investment strategies look at creating property portfolios that include different types of real estate within a number of different markets.

            By investing in just one type of property, you’re limiting your investment portfolio potential and making yourself more vulnerable to market downturns, increasing the chances of failure overall.

            Property portfolio diversification means spreading your risk across several different ventures, which is vital when building a versatile portfolio of investment properties and keeping cash flowing.

            Say your portfolio is filled with multiple student investment properties in the centre of one city. If the market slows in this area, your entire property portfolio will suffer.

            You can diversify your property portfolio in two ways.

            • Choose a different type of property – for example buying a combination of student accommodation and residential property, or buying flats as well as houses.
            • Invest in different areas – one property portfolio example could be investing in different cities like Liverpool, Manchester, and Birmingham.

            If you’re serious about learning how to grow a property investment portfolio, diversification is one of the key elements to consider for the best return on investment.

            This way even if one investment proves to be unsuccessful, you will still be able to profit from the other investments in your portfolio, protecting your finances against potential struggles in the future.

            For successful and high-earning portfolio landlords, diversification is essential to building a property portfolio that will stand the test of time so it should not be overlooked!

            Get Your FREE Liverpool Investment Guide

            Everything you need to know about investing in Liverpool, one of the UK’s hottest investment cities.

              Two-hands-holding-house-model-and-key

              7. Choose a Hands-Off Investment

              Many people assume when setting out to build a property portfolio they will have to take on a lot more responsibility as a landlord.

              A landlord’s job can be hectic, with the pressures of finding tenants, managing properties, and dealing with tenant issues demanding a lot of time and effort.

              This is especially true for those already working full-time and looking to use their property portfolio to generate extra income.

              Luckily, however, building property portfolio can be done using a fully hands-off investment strategy simply by hiring a property management company.

              Enlisting a property management company will add to your expenses, but it is often crucial if you don’t have the time to meet the demands of running a property portfolio.

              These companies are a key part of a hands-off property investment strategy as they will deal with all landlord responsibilities and will be the first point of contact for your tenants.

              In addition, they are highly experienced at what they do, which can be extremely helpful if you’ve just started to build a property portfolio.

              This will eat into your profits a small amount, but it will save you a great deal of hassle. It also allows you to earn more income through other streams than if you were acting as a full-time landlord.

              Typical functions of a property management company:

              • Selecting Tenants for a Property
              • Collecting Rent from Tenants
              • Managing Day-to-Day Repairs
              • Overseeing Property Maintenance

              If then you find yourself wondering how to build a property portfolio while maintaining a full-time job, hands-off investing is certainly the best strategy to adopt.

              Buy-to-Let Investment Guide

              Want to become a successful buy-to-let investor? Get our free investment guide today for all the latest tips!

              Download Guide Guide - Buy to let investment guide

              Liverpool Investment Guide

              Invest in the UK's most popular property market. Check out the ultimate Liverpool Investment Guide 2024!

              Download Guide Guide Liverpool Investment Guide
              Property investment risks - person playing jenga

              8. Have an Exit Strategy

              When trying to figure out how to build a property portfolio, the long-term or end goal may not be at the front of every investor’s mind. However, one of the most important aspects of building a property portfolio, and UK property investment in general, is to have a strong exit strategy.

              An exit strategy looks at the end result of each investment, considering what to do when the time comes to sell a property.

              Your initial goals will tie into this. For instance, if you’re investing to build an attractive retirement fund, you’ll want to generate as much rental income as you can before selling at the right time.

              Additionally, selling a property takes time due to the property being a physical asset. Therefore, If you want to sell your investment you need to be patient in order to secure the most value from your property.

              Property is a long-term investment, and you cannot quickly dump such an asset if you are in financial trouble, so you should have a plan prepared ahead of time.

              By researching rental market trends and considering property price predictions, you can get a sense of the best time to sell your investment property for optimum gain.

              In terms then of how to start property portfolio investing, it’s crucial to map out your entire investment strategy, clearly identifying your long-term goals.

              Request Virtual Tour

              Receive the virtual tour for this 2-bedroom apartment today.

                9. Consider Buying Off-Plan Property

                Whether you want to know how to build a property portfolio with £50k or how to grow a property portfolio from just £20k, one of the best ways to develop a portfolio on a budget is by buying off-plan property.

                Simply put, off-plan properties are new-build properties that can be purchased while still under construction and usually come in the form of residential as opposed to commercial property.

                There are several strong reasons why buying off-plan property is ideal for investors in 2024.

                They are:

                1. As an incentive to invest, off-plan properties are usually offered significantly below market value.
                2. Off-plan properties allow investors to get in early and cherry-pick the best units in a development.
                3. Thanks to the lower prices, off-plan properties usually grow in value upon completion and with UK property prices set to increase over the next five years, 2024 is an optimum time to invest.
                4. Off-plan property investment is one of the best ways to enter the market If you have a starting budget of 100k, 50k or even 20k, it gives you time to make staggered payments while construction is ongoing. Meanwhile, your investment is likely to have increased in value by the time construction is complete.

                Of course, if you do choose to buy off the plan, you need to carry out ample due diligence to ensure the developer is reliable and the property will be of high quality.

                Off-plan properties can be riskier due to the fact that delays are often unavoidable in the construction industry, so ensuring the developer is of a high standard and has a portfolio of completed developments is important.

                Many people interested in entering this lucrative market wonder how to build a property portfolio from nothing. Well, given the growth potential and the time it gives you to complete payments, investing off-plan is one of the most cost-effective ways to start a property portfolio.

                To learn more about buying an off-plan property, be sure to check out our ultimate off-plan property guide.

                Join Our Mailing List

                Sign up to our mailing list today for information on the latest buy to let deals, new property launches, expert insights, and more.

                  Text To Let on a sign with blue background

                  10. Avoid Buy-to-Let Mortgages Where Possible

                  If you’re trying to determine how to start a property portfolio with no money or have a low starting budget, you’re likely considering a buy-to-let mortgage.

                  While this is a popular decision among landlords, one of our top tips is to avoid buy-to-let mortgages if you’re a cash buyer and can afford it – particularly if you’re planning for retirement.

                  The reason we say this is that BTL mortgages are different to typical residential mortgages.

                  Aside from the fact that BTL mortgages require a larger deposit (usually around 25%), they are also interest-only.

                  This means that every month, mortgage payments will only cover the interest without touching the overall debt.

                  Then come to the end of the mortgage term, you will have to pay off the total debt, usually by remortgaging or selling your properties to cover the cost.

                  Naturally, if you’re planning for retirement and want to make a profit on your property you won’t want to be forced to use your sale to cover the mortgage payments.

                  You can get mortgage relief if you really need to use mortgages, but you may require forming a limited company to get the best returns.

                  You will also find it harder to get a BTL mortgage if you are purchasing an off-plan property, due to the added risks that come with buying off-plan.

                  In any case, when thinking about how to build a property portfolio, the way that your investments are financed is an essential factor to consider.

                  You can learn more about buy-to-let mortgages and forming a limited company in our buy-to-let tax investment guide.

                  With £10k Discount Applied

                  Completed and fully furnished limited back to market properties in our best-selling, flagship development.

                  Property Portfolio Example

                  How to Build a Property Portfolio UK

                  We hope you’ve enjoyed our guide to building a property portfolio in the UK.

                  The following will show you what an example property portfolio may look like with a property investment company like RWinvest.

                  RWinvest is an award-winning property investment company with over 17 years of experience in residential and student property.

                  We currently have some fantastic available properties that cover a range of price points, meaning you can help build your portfolio with us at an affordable price.

                  Whether you want to know how to build a property portfolio with £50k or how to build a property portfolio with 20k, the following properties offer some incredible investment opportunities.

                  Property Portfolio Example:

                  If you want to learn more about investing in any of these areas, you can read our detailed guides to learn more.

                  Each of these offers invaluable advice and expert insight into the UK’s best property investment markets, further outlining why property is one of the best areas to invest in this year.

                  Our Latest Property Guides:

                  Avatar photo
                  Author

                  Dale Barham

                  Dale is a property content writer at RWinvest. Keeping a close eye on the UK property market, Dale helps our readers stay informed and up to date on the latest market news and statistics.

                  Disclaimer

                  Contact Us

                  Want to Get in Touch?

                  Fill in the form to contact us today and a member of our award-winning property team will be in touch to help.

                    I can honestly say they have put my mind at rest from day one answering all my questions I had , true professionals, I am not experienced in buying off plan or for a rental income but I have to say the process has been smooth from sales to Chloe in client care and now I’m handed over to the final stage for the site visits
                    I feel very relaxed and happy with how amazing the team have been. I I can’t wait now to see the end built ! Thanks 🙏

                    Kelly Webber

                    Google Reviews Logo

                    I have had the pleasure of experiencing exceptional customer service from RWinvest. Adam and Michelle were remarkable and were exceedingly supportive in facilitating the acquisition of two properties in Liverpool, at "The Gateway." Their guidance was instrumental in the purchase of the properties and I express my utmost satisfaction with their assistance, and I am inclined to not only endorse but also consider any property advertised by RWinvest.

                    Narendra Rai

                    Google Reviews Logo

                    I am very happy and satisfied with RWinvest. Their team was always responsive, supportive and friendly throughout my investment process. Thomas from RWinvest team was especially very supportive and he made sure that I have all the necessary information at the right time. He helped me with all my queries, and helped me to complete my investment process smoothly and with peace of mind.

                    Babak

                    Arrow left
                    Arrow right
                    UK