With 2017 in everyone’s sights, it’s time to start thinking of new year’s resolutions and making promises that you’ll (hopefully) stick to. Owning property has become one of the most wished things for people in 2017—is it also on your shortlist?
It seems like every year more and more people get into the property development market, only to crash and burn and waste thousands of pounds on failed developments and half-hearted attempts at breaking into the industry. The truth is: not everyone is cut for the property investment business. It’s cutthroat, people are scoundrels and you’ll end up feeling more stress owning your own business than working for a questionable boss.
However, that doesn’t mean you should be discouraged. For those that prosper, they’re able to make a good living from just collecting rent and occasionally filling in a couple of forms. Investments are almost like gambling because you’re putting money on the line for a hopeful return, but it’s not down to complete chance and there is almost always a method to flip a failing investment into something profitable. Here’s a brief guide on how to get your foot into the property development market and make the most of your money and time.
You can’t get into the property market without first saving a substantial amount of money. Before you consider buying a selling or renting our property, keep in mind that you actually need to own a house first. You can look at help provided by Mortgage Advisors, but it’s always a good idea to do a considerable amount of research into the costs involved. You’ll have to consider mortgage payments and fees when buying a home, property costs, refurbishment deals and even hidden fees that agencies charge to list your property for sale or rent.
The key to having good finances is managing your budget properly. Not only does it give you more money to spend, it also guarantees you’ll have a positive credit rating to improve your chances of taking a loan or mortgage to buy your property. If you’re not able to save money or stay in the positive, then it’s time to start taking control of your finances and make some lifestyle changes.
The location is extremely important when scouting for properties to sell or rent. Being close to local amenities such as public transport, supermarkets or schools can improve the value of the home by a substantial amount. If a property is far from these facilities and services, then it requires the homeowner to have a car or be accustomed to walking fairly long distances before they reach a shop or service they need.
However, you can be smart with your developments and always look for rising opportunities. For example, if a train station is going to be built near a relatively cheap location, or a large shopping mall is in development close to a remote area of housing then it’s worth buying properties in those locations to plan for the future. Investments in the property market are slow and take years to build value, but making smart decisions and planning for the future is key to improving your chances of making a successful and profitable sale.
Be warned, though, many property developers understand this golden rule of opportunity and will have the contacts and resources to beat you to the punch if you’re in a contested area. Make sure you contact the local council or look for upcoming developments and make sure you do plenty of research before you try to compete with established agencies and developers. If possible, take your developments to cheaper areas on the outskirts of town or in relatively remote areas and specialise in a niche so you can establish your brand without contesting against others.
Weigh the Risks of Renting or Selling
Assuming you’ve purchased a home for the sake of investment, next comes developing it into a rented property or a place you want to sell. Refurbish the area, clean up the insides and outsides of the property, ensure cables, wires and pipes are installed correctly to supply the home with water, gas, energy and phone. It’s extra money to spend on top of buying a property, but it can add a good chunk of value if you know the best home improvements to increase home value.
Renting is arguably an easier and safer investment. While you’re still paying the mortgage for a home, the income from rent can help you pay off the mortgage so that you’re essentially getting a free house after the deposits and fees. If you manage to increase the prices and develop it into a modern property near local amenities, then your rental price will skyrocket and you’ll have buyers lined up to live in your property.
By carefully adjusting the price of rent, planning the location and adding valuable improvements, you could buy a house and rent it out to gain profit while also paying off the mortgage. You’ll have to find clients on your own or negotiate fees with a local agency, but make sure you’re always looking for prospective clients so that you always have someone lined up to live in your property and you never have a lull in tenants because it could seriously harm your profits.
If dealing with tenants doesn’t sound appealing, then perhaps selling the home is more suitable. There are a lot of fees and talks to go through, but you’ll gain a large chunk of money instead of small payments. It’s important that you invest in renovations and improvements to the home because you’ll be selling the entire house to a prospective buyer.
Make sure you upgrade and modernise appliances and designs, and decide whether you want to furnish the house or sell it as a blank slate. In most cases, it’s better to furnish the house so that your buyers have a reference point on how to arrange their own rooms. It’s vital that you present the house to buyers as if it was currently being lived in. When you hold an open house, feed their imagination—don’t ask them to imagine the house themselves.
Get Your Foot in Early
Hopefully, this small guide has given you enough pointers to get you started with your property ladder career. It’s not easy, it requires a lot of money and research, and there are risks involved. However, if you manage to prosper then there’s a relaxing job-free life waiting for you.