If you think about it, property investment is like playing a life-sized version of Monopoly. Once you’re on the market, you’ll be looking to buy property that is valuable and perhaps even expensive. Or, that could be valuable in the right set of circumstances. Then, as you progress with your investment, you can gradually add things to it so that it’s more valuable. Or, if you’re smart, you can sell it on to someone who is incredibly interested in buying. Does this sound familiar? Now, we all know that as you continue to play the game of Monopoly, the aim is to pass go without going bankrupt. So, how do you do this when you’re playing on the actual property market. How do you win?
It’s all about choosing the property you buy carefully, knowing what to do with it once you’ve bought it and finding the target buyer. Tick off these three boxes, and you are well on your way to being a success as a property investor. But there are other factors to take into account too. And, while we think a game of monopoly is an apt simile for property investments, it’s not quite as simple as that. So, let’s start at the beginning of a property investment and work through it to the point where you’re making a large profit.
The Right Time
The first thing you need to think about is whether it is the right time to invest and purchase the property. How is the market doing? If houses are selling well, it’s probably not a great time to invest because house prices are going to be high. Remember, you need to look at the level of the market specific to the area where you’re buying. Houses might be selling well, but if you’re investing in office property and that hasn’t followed suit, it doesn’t matter. Ideally, you’re looking for a lull in the market where the property isn’t selling at all. This will bring property prices crashing down and give you a good chance of getting a great investment at a fantastic price. This happened recently in London, England when the housing bubble burst spectacularly. You can read about that on https://www.ft.com/content/.
It’s not just about whether the property market is at the right point of course. You need to think about whether you are ready to invest as well. Don’t forget the property market is always going to be expensive. You need to be willing to risk a lot of capital, and we’re not just talking about the initial buy. Eventually, you’ll have to put money into improvements as well. If you don’t have this type of money in your accounts, you will need to take out a loan. This can take time, and you will certainly need to make sure your credit score is in tip top condition.
Remember, you might find there is a very specific drop in the market. It could be in a local area where the property isn’t selling at all. This doesn’t mean it’s worth investing in. It’s quite possible there’s a reason it’s not selling, and the infrastructure of the area isn’t growing as it should be.
Finding the right property is always a unique challenge. The first step you should take is deciding what type of property you want. Commercial or residential? Are you going to sell or let? If you decide to let you can get a staggered investment, but it requires a lot more time and effort. However, selling is a lot trickier, and it can essentially be the luck of the draw. Any time you consider investing in property, you should be speaking to a broker. A broker has their ear to the floor on the property market. They can help you find a piece of property that has a lot of potential and make sure your investment pays off.
You do need to think about your target market, though. It is essential you know who you’re going to be selling too. For instance, you might join a group investment in a block of apartments. If that’s the case and it’s in the middle of the city, you could aim to let them out to students. Or, alternatively, you may offer them to working professionals. There are plenty of advantages to letting to students such as being able to use the guarantor contract. As for professionals, they tend to keep the properties they use, clean, tidy and well maintained.
If you’re selling it on, consider who’s going to buy the property. For blocks of offices, you’re going to be looking at wealthy business owners. Make sure you understand exactly what they want from a property they’re going to buy. Factors such as security are always going to be high on their list. Check out http://sbrroofing.com/safety-tips-for-your-commercial-property/ to see how you can boost a property’s security.
Fixing It Up
Once you have found the right property and you’ve invested, you need to think about fixing it up. It has to be ready for the market. On the most basic level, it needs to be safe for people to use or to live in. That means your first priority is finding if there are any immediate issues that need to be addressed. There almost always will be if you’ve bought a fixer upper because it’s probably an old building. Anything older than a 1980’s build and you’re at risk of having lead paint present on the walls. A staggering amount of houses in America still have lead paint walls to this day. If the property was built in the 60’s or 70’s you can guarantee there is asbestos in the floors and ceiling. Asbestos can cause mesothelioma while lead paint is toxic to young children. If you have a look at a site like http://www.schemel-tarrillion.com/lead-abatement/ you can get lead paint either removed or covered. But, a service like this is going to cost you. You should really know about any of these problems before you buy.
It’s not just going to be safety issues that are a concern either. The home or business property needs to look presentable. Buyers need to see it and immediately want to buy. Potential tenants should feel right at home as they walk through the door. If you have bought a bulk property, it only makes sense to kit it out in bulk too. You can buy wholesale furniture from https://www.kitoutmyoffice.com/pages/ online that looks stylish and is well made. This is one of the ways you can minimise the costs of improvements.
Think about kerb appeal too. The first impression of the property is going to be what buyers see when they’re outside. So, it needs to look stunning. A great improvement you can make to office buildings would be metal panels. Metal panels can trap heat inside the building providing great insulation and make the exterior look modern. So, it’s both stylish and practical.
The final part of passing go is making sure that you can sell the property. Or, getting the tenants you need. If you’re renting out the property, you should find it quite easy to attract tenants once it’s been fixed up. If you’ve priced it correctly, there will always be people knocking at your door. Selling a property on is a little harder. First, there will be a set point that you must sell at before you start bleeding money from the property. Don’t forget you’ll be paying bills and tax on the property until you sell it. That’s why you need to aim to shift it off the market in around three to six months. Although, it does depend on the size of the property that you’ve invested in. Obviously, if you had the capital to purchase a block of apartments, this is going to take longer.
At the same time, you can’t rush the selling process. It’s not possible to jump out of the property market once you have committed. You will need to wait for the right offer. Getting an offer that does the property justice isn’t always about what you’re selling. Instead, it’s about who’s representing you. You need a great property management team because they can sell it for you. They can make sure that the offices you have bought are seen by the right business buyers. They can guarantee that buyers are dazzled as they walk through the doors of your property. It is absolutely crucial that you don’t cut corners or cost with representation. You need to find the best company on the market. Have a look at http://www.rtabusinessesforsale.com/ for one of the most recommended companies today.
Once you’ve sold your property, you can either keep the capital or reinvest. You might find the property market is addictive. Once you’ve made your first fortune, you’ll want to do it again and again. You may even start buying up more than one property at the same time and grow an investment empire. Be careful though because the more you invest, the more risks you’ll be taking on. And, it is a gamble so you may find that sometimes you don’t even break even. Good luck!