Although the property market in the UK is experiencing price stabilisation because of the credit crunch, it is still possible to earn money through property renovation – as long as you choose the right property at the right price. By using proven techniques, you will be able to find a suitable property that once renovated will gain value for resale or generate ample rent to justify your outlay.
What is property renovation?
Property renovation is a process that covers an expansive range of activities ranging from structural repairs and new building work to transform a property into a house, business establishment or an apartment with the objective of renovating the property to highest quality. Once renovation is completed, typically by tradesmen, it’s most likely that you will have added considerable value to your property – the main goal of property developers.
What property should you renovate?
Location and finding the right type of property are both important. Location is a crucial factor in choosing a property mainly because you may want to sell it in the future. Thus it has to be ideally located and must be appealing to buyers.
One of the most profitable types of property is the one where there are many of the same type of properties in the adjacent neighbourhood. Called comparables, they refer to other houses of a similar style and age that help estate agents and surveyors calculate the properties' reasonable market value.
If there's one really important thing to remember, it's that the secret to making good profit in property is to buy a property at the lowest possible price, most preferably one that's priced below market value.
How to find property to renovate
There are numerous ways to locate property. These are some of the most common methods:
* Scan local newspaper advertisements for items on properties needing renovation or refurbishment.
* Check your area for properties that have more than two estate agent’s For Sale signs. Properties displaying multiple signs usually signify anxious sellers.
* Scout the area you’re interested in for FSBO (for sale by owner) properties. These properties are excellent because they haven’t been marketed to a great extent – which means that many of your competitors may not even know such properties are for sale.
* Develop a network with knowledgeable local people. Estate agents, letting agents, accountants, and solicitors are among the people to get in touch with.
Financing
For investors to earn as much profit as possible, it pays to use creative property financing techniques as well as locating properties below market value. One form of financing is using other people’s money (OPM) which involves the use of private investors and bank financing to come up with 100% financing for your property deals. OPM is typically used to develop your property business and to take advantage of the power of gearing.
Renovating the property
For older properties, you can renovate with new construction or just by refurbishing older structures. The extent of renovation is also dependent on the establishment date of the property. No matter what type of property you’ve purchased, it is best to consult with home remodelling and renovation specialists. Once you have completely made up your mind to renovate a property, make sure to remember the popular adage, “It cost twice as much as it thought it would.” This should prompt you to manage your expenses well, control the flow of cash and build in some contingency.
Do-it-yourselfers can do parts of the renovation themselves to save some money. But if you want a fast turnaround and are fully aware that you may not accomplish your renovation goals in the time you have, it’s always best to employ the services of renovation experts.
Parmdeep Vadesha is a property investment expert and founder of the largest community of property entrepreneurs on the web who buy below market value properties from distressed homeowners facing repossession, divorce and bankruptcy. He writes a monthly newsletter for over 70,000 property investors worldwide - www.Property-System.com
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