Property investment has always been cited as an excellent way to secure income. But, you have to make sure you can afford to tie up a large portion of capital into a long-term investment of five years or more, or be prepared to accumulate long-term debt through the likes of home loans.
There are many different types of property in which you can invest
The four main types include a home for your family, a business property, a holiday house or a property bought purely for investment purposes. All four of these property types are considered a good investment, an excellent way to spend your money, but the most rewarding property investment is when you purchase a dilapidated property in an upcoming area and renovate it. A fixer upper. Most times you spend very little on purchasing the property but you spend a fair amount on renovating and refurbishing the property which results in a hefty profit when you sell it.
Fixing up old properties to resell can make you an incredible amount of profit if you do it the right way
Make sure to plan ahead and consult the relevant professionals before committing to purchasing the property. You have to do your research on all fronts because there are dangerous pitfalls that prevail. These include running out of money, purchasing in the wrong area for your expectant price range and biting off more than you can chew when it comes to renovating.
Consult all the experts and source comparatives where possible
Purchasing a fixer upper and making it look beautiful can be a fulfilling project but ultimately, the whole process and journey needs to result in a sturdy net profit for your back pocket.
The neighbourhood in which you purchase is possibly the most important decision you will make. Don’t purchase in areas that seem to be becoming more popular or used to have a bad reputation and hope for the best. This is far too risky. Consult an estate agent about areas that have a longstanding, good reputation and draw a comparison in price ranges and recent sales in each of the areas you decide to explore. Then, purchase the absolute worst home in this area for your fixer upper project. In this way, you are guaranteed a sale and a profit.
Find out about your renovation costs before purchasing
This is really a case of knowing what you’re in for. Consult with a building contractor. If you need to gut the kitchen and bathrooms as opposed to simply replacing the tiles or if you need to sort out plumbing and mould problems as opposed to just replacing the cabinets and giving it a lick of paint, then have a cost estimate from the professionals from which to work. By having this type of information available you can plan your expenditure properly, use your money wisely and you’ll have a time estimate. You’re then able to fathom when you might expect to market the property and gain your profits.
So, should you buy that fixer upper?
Yes, sure you should. But only if you have done your sums properly, been smart enough to do your homework and are happy to consult with the best property aficionados in the business. Property investment can give you ample rewards but the buying and selling of properties is, most times, a cut throat business that requires a lot of money, patience and tenacity.