Investing in property can be hugely lucrative, but there are plenty of pitfalls you’ll need to swerve along the way. The key to a good investment lies in being able to spot a golden opportunity and dodge prospects that aren’t so secure. If you’re keen to start a property portfolio or you’re on the lookout for your next investment, here are some tips and tricks to help you succeed.
Location, location, location
There are few things more important than buying in the right location. This goes for any kind of investment, whether you’re looking into retail, commercial or residential properties. Location can affect the asking price significantly, and it will also determine the marketability of the property. If you buy in a desirable area, you can expect to sell quickly at a premium price. If you try and snap up a bargain in a region that doesn’t quite have the same appeal to buyers, you may be waiting longer, and your profit margin may be reduced.
In many cases, it pays to get ahead of the crowd when it comes to choosing a location. There are certain towns, districts of cities, and villages that will always demand the top price, but these aren’t always affordable, and properties may be few and far between. If you’re priced out of the market in these areas, you can still make money by identifying up and coming towns or suburbs and investing here. Look out for signs of redevelopment and investment by local councils or authorities. New housing estates, municipal buildings, and cafes and bars are always a good sign.
Before you consider making an offer, find out everything there is know about the local area. You’ll need to be aware of the average value of homes and sale prices for properties that are similar to you, and it’s also beneficial to look at local schools, transport links, and crime rates.
Many investors make their money by being able to spot the potential to maximise their profits. Rather than buying a new build in an established area, they may set out to find a rough diamond in an emerging market. If you buy an older house, which needs work, in a town that is on the up, you’re likely to make a lot more money. Once you’ve carried out a renovation, you can put the flat or house on the market, and hopefully, you’ll make a significant profit in a short space of time.
Buying a doer-upper is not always a blueprint for success. There are lots of properties, which have the potential to turn into money pits, and by taking these on, you’ll be giving yourself more work in return for lower profits. Make sure you carry out extensive research before making a purchase. Pay attention to the results of structural surveys, and get some quotes from building firms and estimates from local estate agents so that you have an accurate idea of how much the project will cost in comparison to the anticipated return.
When you’re looking around properties, whether they are flats or houses, always keep your eyes peeled for opportunities to add value. Could you add an en-suite or convert the loft? Is there scope to add an extension to create a large, open plan kitchen or could you create an office in part of the garage?
As an investor, you want to take home as much profit as possible, and it’s wise to consider options when it comes to minimising losses through taxation and fees. Do some homework before you choose a solicitor, find out more about agent fees, and look into schemes like those offered by 1031Gateway. If you buy and sell a lot of properties, even small savings on each acquisition or sale can make a massive difference to the balance sheets. Once you’ve bought a property, smartening it up for sale can help you to generate more interest and higher offers. Present the property with the target market in mind. Often, spending a small amount of money on paint or paper, and freshening up the interiors can make a massive difference.
Even if you’re buying an investment property rather than your forever home, it’s important to have patience and to bide your time before making a decision. If you dive right in, there’s every chance that you could end up paying more for a property that isn’t suitable. If you’re interested, arrange another viewing, and get a better idea of what the property offers, and how you would go about increasing its value. Think carefully about whether this is the right choice for you, and try and focus on the long game. Property investment can generate profit quickly, but it usually takes a long time to establish a winning portfolio. Make sure you have all the information you need before you take the plunge and sign on the dotted line.
If you want to hear about the next gem that’s coming onto the market before anyone else, it pays to have a network of contacts. Make sure you’re in touch with local agents and keep your ear to the ground for news of new developments. Check online property portals on a regular basis, and sign up for alerts if you’re keen to focus on a small catchment area. It also pays to establish partnerships with other professionals you’ll need along the way. To buy and sell houses, you’ll need legal and financial advice and help from builders and people with expertise in other trades. Once you have a team of people you trust around you, it should be easier to turn projects around faster and reduce costs.
Are you keen to take a step into the world of property investment or are you looking to expand your portfolio? Buying flats or houses is often a very effective way of making money, but it’s not always plain sailing. Although you can make a lot of profit in a relatively short space of time, not every risk is worth taking. Bear these pointers in mind, and keep your eyes peeled for that golden opportunity.