Hindsight is a wonderful thing.
We all knew about COVID-19 but have all been hit at speed in a way no-one was expecting. And the fall out is catastrophic.
No doubt we will now have a plethora of articles about ‘lessons learned’ and all that but the only real lesson we should take for the future is that we all need to think ‘what if’ with our businesses and not just have plan Bs, but Cs and Ds.
What this looks like will vary by business and no-one can ever predict the future; we just need to be more fluid to adapt.
Having 100% foresight is not possible, but being flexible with strategy and offering will be important. In the future, there’s no doubt that diversity of offering will be vital for many.
So, what does this all mean for buy to let?
Well, for intermediaries, it demonstrates the need for diversification right across the piece – whether you’re a specialist buy to let adviser or not. If you are, then landlords will have other product needs that you should certainly be servicing. Don’t just focus on the mortgage and ignore everything else.
You may feel that that you do not have the expertise in-house to deal with this, but then there are so many opportunities to collaborate with other specialists. So diversification can be indirect as well as direct.
Firms will often argue that this approach means they lose ‘full control’ when actually service agreements can be put in place that provide peace of mind in terms of client ‘ownership’ and ensure the client has all the protection they need. Doubly important, given the current situation and what many borrowers are facing.
And what does it mean for landlords?
And then there’s the situation for the landlords themselves – indeed all types of clients. Again, this current market appears to show the benefits of having a fully diversified property portfolio, and a fully-diversified array of investments in general.
For landlords, that diversity can help them ride out any downturn, so they may want to consider the property types they own, their location, the tenant demographic, etc, and seek to ensure that not all their property eggs are placed in the same basket.
So, landlords (and indeed their advisers) should always try to have a diversified investment portfolio which means being able to access cash quickly if required. The Coronavirus crisis has given us a prime example of a situation which can escalate rapidly and the need for accessible, fluid assets is going to be paramount for many, many people.
Hindsight is a wonderful thing but what will beat it every time is having a plan in place and preparations which allow you to deal with even the most fluid and fast-moving of situations.
This article first appeared in Mortgage Introducer.