Investment in property is an attractive proposition when you consider the current climate in the housing market. Of course, investment in bricks and mortar always carries some risk because of the sums of money involved. Many amateur property developers and potential landlords lost everything and went into bankruptcy,
How can you minimise the risk when investing everything you have in homes and property? Here are some top tips to help you along the way.
We all know that the location is the number one priority whether it is for domestic housing or commercial ventures. There are certain restrictions you face when you source buildings in the best areas. Firstly, there is the cost. The land there will command a higher price than in less desirable areas. It will also be in short supply because every time a plot or building becomes available, people will snap it up quickly.
You must consider what you hope to achieve when looking at real estate. If you intend to live there, you might invest more money than you would on a property you aim to rent out.
Buy To Sell
Property developers often buy a house for a low price, improve it. and sell for a high profit. You can do it too if you are wise. Here are some ideas for you to think about.
- Arrange a mortgage before looking at properties and offer a quick transaction so that you can negotiate the price in your favour with people who are desperate to sell. Never pay the asking price, everything is negotiable. It is not uncommon for unscrupulous developers to drag their feet when they reach this stage and then make an even lower offer or threaten to pull out of the deal. Desperate people accept that offer.
- Undertake improvements that will give you the best return. An extension to the building might be a bad idea. You would not recoup the money on the sale, but a new bathroom and kitchen could prove to be lucrative when the house goes on the market. Ask the estate agents in Withington or anywhere else for advice before you undertake significant construction work.
Buying To Rent
You must have a different outlook if you are buying a house to rent it out. The new people might not care about the property, fixtures, and fittings as much as you do. Indeed, the search for decent tenants is a hard one, as many landlords will testify.
- Search for the best deal on the property, just as you would if you were buying it to sell or live there.
- The interior must be functional and robust. You do not need to fit a designer bathroom or kitchen. Keep it plain, simple, and use commercial fixtures wherever possible. They might suffer from much abuse, and they must be able to take the knocks.
The government will soon take measures to calm the housing market. If the criteria for mortgage applications become more stringent than they are now, you might not qualify for one at all. If your plans are complete, take the leap now while the going is good. I hope your new venture pays dividends.