Gearing up for the New Year

I'm guessing I'm like a lot of landlords at this time of the year.  You reflect and start hatching your plans for the forthcoming 12 months.  Do I stick with the number of properties I've already have or do I gear up and look to expand?

Conditions right for expansion?
It looks on the face of it that the economy is once again starting to grow.  A growing economy in theory means rising living standards, which means that people have more to spend on things including property.  However, we have a problem here.  As the economy starts to grow, the government will start reigning in the loose monetary policy and interest rates will rise.  This for most people will make property prices less affordable.  I've said before that the government has helped us all avoid the biggest property crash of all time (through monetary cloak and mirrors).  But don't be fooled ......we have had and will have for a considerable number of years the hissing sound of a deflating property bubble.  There is no getting away from it house prices aren't cheap which is one reason why I'm not rushing to expand my portfolio.

Gung ho & ambitious landlords
That is not to say that there are not opportunities out in the investment property market.  Auctions always through up anomilies and opportunities.  The reality is that if you are patient and look at the long-term then when faced with alternatives residential investment still makes sense even if in my book isn't a screaming buy on capital valuation.  The government has done a good job of breathing life back into the market but don't rely on governments to be the judge of good value in the property market (look at the number of booms and busts they have presided over as evidence of this).

What am I doing?
If I was a young ambitious landlord I would be doing exactly what I did before hunting out ways of gearing up my finances for the New Year.  As it is I'm happy to drip feed my cashflow into partly paying down my debt and investing in effectively tax efficient private equity called Venture Capital Trusts.  In a couple of years time when interest rates are at a more normal 5% ish then we will all see whether house prices were cheap and whether the slow hissing sound of the property bust has finally ended.

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