Buying Rental Properties from IB money?
Maybe I just haven't spoken to or seen anyone do this within my bubble, but is it common for people working in IB/PE to purchase rental properties to earn supplemental income? To me, it seems like a no-brainer. I even think it's not crazy to say that after a good amount of time owning properties, you could make enough to leave finance.
Would love to hear thoughts and if anyone has had any success with this or knows anyone who has.
Entirely possible if you buy outside of London (set up a Ltd company; get a 75% (which will be max) LTV mortgage, then say a £200k property in somewhere like Sheffield should get you decent tenants and require an outlay of maybe £60 - 70k post costs and stamp, etc.)
I'm not sure "no-brainer" is the right word though. It's a big time commitment to go around seeing properties on the weekend outside of the Southeast on top of an already demanding job. Reasonably low-maintenance after that if you use an agent, but don't underestimate the initial property search. And you have alternatives which are much more tax-friendly (especially with the direction of government policy for landlords; maxing out your pension and ISA for one). Not sure how senior you are but unless you're extremely flush with time and money, the juice might not be worth the squeeze.
I don't disagree with it; can be lucrative. Just a question on whether it's your best option at least in the junior years.
Great, thanks for the insight! I’m still a student currently, just trying to think ahead.
Based on the most helpful WSO content, buying rental properties as an IB or PE professional is not uncommon, but it comes with its own set of challenges and considerations. Here are some key insights:
Feasibility While Working in IB/PE:
Financial Considerations:
Long-Term Potential:
Success Stories:
Challenges:
In summary, while it’s not the most common path within the IB/PE bubble, it’s certainly a viable option for those willing to put in the effort and manage the risks. Many professionals view it as a way to diversify income streams and build long-term wealth.
Sources: Investment Banking to Private Equity - 6 Things You Should Know, Buying rental properties as an IB analyst?, Building Personal Real Estate Portfolio, https://www.wallstreetoasis.com/forum/real-estate/whats-with-all-the-ibpe-bros-asking-about-cre?customgpt=1, Regrets About not Going to Corporate Finance?
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