This Forgotten Property Strategy Will Save You During This Recession

Considering the current climate, I thought you guys might want to know what is, in my educated opinion, the best recession-proof property strategy. Having been investing for over 8 years now, I have tried and tested most options – with one pretty obvious outcome.

Resilient for recessions, downturns and almost any storm that may come your way; this property strategy is often overlooked. Well, actually, pretty much forgotten. However, it is the strategy that has allowed me to build a solid foundation with a consistent income and live on my own terms.

So, what strategy is it? Single let properties. More specifically, single let properties up North.

Now you may be thinking, “Harvey there is a reason they are so overlooked.” But hear me out! I’ve been doing this for a long time, and I also have my own HMOs and a commercial conversion, but single let properties suit me so much better. In fact, whether they suit you or not – they are almost essential for building your foundations as a property investor.

When COVID hit, I heard numerous horror stories about tenants returning house keys to travel back home. In the case of HMOs, people don’t want to share houses at the moment; leaving landlords struggling to fill rooms. If the market goes down as it has whilst you’re trying to do a development, the money is gone out of it. Although in normal times, these higher-earning strategies can be fantastic, they also carry a higher risk.

Which is exactly why single lets can provide such a strong foundation. They’re so robust, and the risk can easily be minimised up North. For example, all of my properties are intentionally bought so that if the tenant falls out of work, universal credit or benefits will cover the rent. I purposefully buy property with a rental value of around £500 PCM and find working tenants or often single mothers already on benefits. In London however, if the rent is £3k PCM, the maximum you can get on universal credit or benefits is £1,500 – creating a £1,500 shortfall in the event of a recession or lack of work.

As is the case with COVID, a lot of people have been furloughed. The government funding for this, however, is capped at £2,500 per month. Whereas my rents could be easily covered by that, something in London may still have a shortfall, so although the higher risk ventures may be more exciting – a solid foundation of single let properties is still essential to survive in the ever-changing economy.

To add to that, there is wealth in owning assets. I like owning properties, so although rent to rents can be a great stepping stone for someone starting out, they don’t often work out longterm, and definitely not for me.

Personally, I invest in Stockton-on-Tees. Although it’s four hours away from my physical location, I met a guy that educated me on the area, and I now know it better than most areas 40 minutes away from me. We’ve all seen Shameless and may have our misconceptions on Northern England, but there are good and bad areas everywhere. Research is key; but generally, where there are transport links and employers, there is strong investment to be had.

Do you think you know a more recession-proof strategy?
Can you agree that singe lets are essential for a strong foundation?
What areas do you invest in?
Would you ever virtually invest in property?

Let me know in the comments below!