Landlords: would you buy your own portfolio today?

When you have spent years building a property portfolio, it is understandable that much of your attention goes into running it.

Today, I would like you to take a little time to consider what you really want your rental property business to provide for the next stage of your life.

Your priorities may have changed since you bought your first, or last, property. The income you need, the responsibility you are willing to carry and your family’s plans all deserve a place in that discussion.

With that in mind, here are five questions I would encourage you to consider:

1. How much of the case for retaining your rental property portfolio depends on capital growth?

What income are you actually keeping after costs and tax, and how does that compare with the equity tied up in the properties? What percentage return would you regard as sufficient for the work involved and the risks you carry?

If you have mortgages, how is your next refinance likely to affect your profits, taking into account both interest rates and fees?

If the announced four-percentage-point increase in property Income Tax rates from 6 April 2027 applies to you, have you modelled its effect on your cash flow?

Taking those changes into account, would you still be comfortable retaining the portfolio if property values were broadly flat for the next five years?

2. Would you make the same investment decision today?

Suppose you held the cash representing your share of the proceeds after selling the properties, repaying any mortgages and paying Capital Gains Tax and selling costs.

Would you choose to commit that money, together with comparable borrowing, to buying the same rental property portfolio, or would you consider other forms of investment instead?

The costs of changing course clearly matter. Even so, asking whether you would make the same investment today can help you explain why you continue to hold it.

3. How committed are you to retaining the whole portfolio?

Would you be open to comparing your present position with selling selected properties and reducing borrowing, or releasing some of the capital for other purposes?

Would you find it helpful for us to calculate your likely net sale proceeds, property by property, after repaying the mortgages and allowing for CGT and selling costs?

Knowing what you would actually have available gives you a firmer basis for comparing your options. That comparison also needs a proper assessment of what you might do next, including the income it could provide, the risks, the costs and how readily you could access your money.

4. What is your intended direction?

Do you expect to continue operating the rental business for the long term, or does your thinking include selling some or all of the properties?

If you envisage stepping back, roughly when would you like that to happen? A plan for the next two years may involve different decisions from a plan to remain a landlord for another twenty.

5. How does the business fit the life you want?

How long do you want to remain involved, and how much responsibility do you want to retain?

Have your intended beneficiaries expressed an interest in continuing the business? Have you asked them what they would actually like to inherit, and what responsibilities they would feel comfortable taking on?

A case study I recently shared on Property118 explains why I think these questions are so useful:

£2.5 million in property equity, yet £30,000 a year short of living costs

The conversation changed when we examined what the client’s accumulated wealth could provide for his lifetime needs, alongside what his children actually wanted to inherit. They did not want to take on the rental business. That was an important consideration when exploring his options.

Your circumstances might be very different. The outcome of answering these questions might be that you become more confident about retaining your portfolio. On the other hand, you may identify a few properties to review, or decide that you would like a clearer plan for stepping back.

Whatever your answers, I would encourage you to share these questions with your family and compare your thoughts. You have put a great deal into building your wealth. It deserves a clear purpose in the life you want from here.

Enjoy the rest of your day.

Mark Alexander
Founder, Property118

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