Is it possible to live off a buy to let portfolio?

There are many different aspects of everyday life which have impacted the real estate market but perhaps the Internet is the one main factor which has brought many new people into the real estate market. Whether or not all entrants to the worldwide property market have their eyes open, are too optimistic and perhaps only hear the good stories is a matter for debate. However, more and more people are now asking the question, is it possible to live off a buy to let portfolio?

While the “live off” factor will obviously depend upon your lifestyle, where you live and your dependents there are still a number of factors to take into consideration.

Don’t run before you can walk

Many new entrants to the real estate market, and especially the buy to let market, see those who have built up property portfolios over years and are now living off their rental income. There is nothing wrong with wanting this type of lifestyle, in theory it is possible for everybody, but many new entrants to the real estate buy to let market seem to want shortcuts for everything and many are not willing to take the time, money and effort to think long-term.

Quote from PropertyForum.com : “Does the European real estate market offer exceptional long-term value?“

We do not have to look too far back to find out what happens if you run before you can walk with regards to property investment and in particular buy to let assets. If you’re property portfolio is growing too quickly, your finances are stretched and you are a little more reliant on rental income to cover your monthly mortgage payments than you should be, then you could be building up trouble for the future.

Make your mistakes in the early days

Whether you have gone to university and studied property management or you have hands-on experience through an employer, you will make mistakes. Those who enter the real estate market adamant they will not make mistakes are the ones more likely to feel the wrath of the markets when the economy wobbles. Those who go in with a reasonable attitude and willingness to learn from their mistakes are more likely to be around in 10 years, 20 years and more.

There are very few property experts who have never experienced financial trouble, many of them have been bankrupt but they all have one thing in common, they have learned from their early mistakes.

Maintaining a job and build your portfolio

Perhaps the most sensible approach, in a perfect world, would be to maintain a full-time job in the early stages of building your property portfolio. This would allow you to maintain a regular income going forward while using your spare time to build up your property portfolio and increasing your buy to let income. As your property portfolio builds over the years this may well offer the opportunity to reduce your full-time working hours and balance this against the income, hopefully growing income, from your buy to let investments.

While this is not always possible one thing you should be aware of is the fact that a buy to let portfolio needs strong foundations and long-term nurturing. If you expect to become a buy to let property millionaire in just a few years then you are living in dreamland. Take your time, plan short, medium and long-term goals and do your best to hit them.