Do you ever get fed up of hearing about the property moguls who make a living from buying and selling houses? It seems that they have got it made, simply buying up places and renting them out for a while, and then selling them on for a massive profit when the prices rise. They probably started with just one or two properties, and then gradually moved up the ladder by being calculated and careful. If you think that you may have what it takes to join these guys, please read on and see if you feel the same way after digesting this article.
Understand The Concept
The basics of property development are fairly simple, you need to buy a property first and eventually sell it for a nice profit. Before you actually make your first purchase you should ensure that you understand what you should be looking for. If you have any doubts you should pay for a local builder to inspect your potential purchase before taking the plunge. One of the easiest mistakes to make for a first time buyer is to take on a property that requires too much work. By doing this, you can easily underestimate the costs of the work required when effecting repairs and modernisation work.
You should have a pretty good idea of how much money you have to spare on buying your property. But do you have a budget calculated to allow for the additional work that may be required? Here is a checklist of figures you will need to consider:
• How much does the property cost?
• How much is it actually worth?
• How much do I need to spend on the improvement work?
• How much will I be able to sell it for after this work?
• What is the profit that I will make from this project?
• If I can’t sell the house, will I be able to cover the mortgage costs?
Estate agents may not be your favourite people but you will need to communicate with them frequently. You may as well get on good terms as you will benefit from their insight and contacts. Disregard the newbies and seek out the experienced agents, they may be able to see potential that you cannot.
Supply And Demand
You need to be able to spot what type of properties are in demand in your locality. Do some research and ask your estate agents about the places that are selling quickly and for a nice profit.
Once you have made your purchase, you need to think about the work required to raise your property’s value. Before this has started you have to understand the regulations that are in place for building improvements. Ensure that you have the correct planning permission before any work is commenced.
Do Not Personalize
This is one of the biggest mistakes made by new property developers. Do not design the house around your own tastes. Try to think neutral when designing that living room or kitchen. Otherwise you may waster valuable time when waiting to sell your improved property.