Property investment – the ideal passive income stream in 2021

creating income through propertyDrawing on his vast experience and expertise, Dr Harry Singh shares invaluable insight into why early 2021 is a great time to get into the business of property investment.

One of the great realisations for dentists in 2020 was that their income is not as rock solid as they once thought.

For dentists whose sole source of income was practising dentistry, this has been a very challenging year in financial terms. And in many other ways too, of course.

There are some things we can’t change. But what we can do is diversify our streams of income, so that they come from different sources.

For example, it wasn’t a worry locking down my aesthetics clinic, because I still have a property income coming in.

The great news is that 2021 is looking like a positive prospect for investing in property, and it’s easy to start.

A stimulated property market

During lockdown 1, we could obviously not view properties in person. Moving was near impossible and things were starting to stagnate.

But, as soon as we gained back some level of freedom, the powers that be stimulated the property market with a stamp duty exemption. As for us landlords, they waived the 3% extra tax.

That will currently cease at the end of March 2021. However, I do think there is a good chance the government will extend this by another six months.

That stated, don’t rely on that extra time. If you are looking to buy, try to do it in the first quarter to take advantage of the tax-saving opportunities.

It is important to note that although there are stamp duty incentives, the market is a bit inflated at the moment – maybe by about 10%. That’s not necessarily a problem for property investors who are in it for the long haul. Over 10 or 20 years, that kind of increase is not going to pose a problem.

Counting the interest

The other significant aspect as we move on from 2020 is that interest rates are incredibly low. Before COVID-19 hit, there were rumours of an increase. Of course, that hasn’t happened, and it is extremely likely rates will stay low for a considerable amount of time.

This means 2021 is a great year to borrow. The cost of debt is really low and the banks are a bit more flexible than previously in the months before the virus hit. Some are willing to take just a 5% deposit, which is good news for first-time buyers and investors alike.

A word to the wise – if you receive an offer for a mortgage holiday, don’t just jump at the chance. If you really need the break, then fine. If you can manage to keep paying, then do.

No lender will say this to you officially, but taking a mortgage holiday isn’t appealing to future lenders.

Yielding results

At the Dental Property Club, we suggest looking for property yields above 6%. This is the annual rent divided by the market value. That will help you weather any unexpected storms and keep money coming in. That’s how you secure your future beyond the realms of the dental practice!

If you would like to learn more, the Dental Property Club can help you achieve financial freedom in a number of ways. For further information, please email [email protected].

The Dental Property Club has some incredible programmes scheduled for early 2021, catering for all levels of knowledge.

They include the live online event, ‘Property Training for Dentists: How to Evaluate Your Property Deals’. Here Harry will share all the tools and templates you need to achieve success in the property game.

Meanwhile, the hugely popular ‘Two-Day Residential Advanced Property Workshop’ is on Saturday 27 and Sunday 28 February 2021.

Imagine gaining all the knowledge you need to make a success of property investment in a fast track environment:

  • Discover why the wealthy invest in property and make money whilst they sleep
  • Learn how you can buy 27 properties in 24 months
  • Aim to become financially free and only work when you want to.

For further information, please visit www.dentalpropertyclub.co.uk/workshops.

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