Could You Become A Property Entrepreneur?
As life expectancy is on the rise, there has become a huge shortage of property both in the rental market and properties available to buy. Many property entrepreneurs are taking advantage of this by taking on property renovation projects with the view to sell on at profit or build up a rental portfolio. The TV programmes make this look remarkably easy, but in reality, you need to keep your wits about you otherwise the whole renovation project could turn into a money pit! However, with careful research and management, property renovation can be extremely lucrative.
Often people embark on their property renovation career by chance. People in the building trade may take on a project as a sideline, or perhaps due to money being short, the first house purchased in order to get on the property ladder needed renovating. As profits rise more projects are taken on and before you know it used forklifts are being researched along with other equipment in order to make the renovation process easier!
What is the best way to approach a renovation project without making costly mistakes?
Do your research
There are agents that solely concentrate on selling properties which require renovating. When you spot a property that you like it is important to check other house prices in the area, how long it’s been up for sale, is the postcode area sought after and are there good transport links for commuting. You will be able to get a general view of whether there is enough potential profit margin before you even look at the condition of the property.
Get professional advice
Depending on your level of building work knowledge it is probably best to hire the expertise of a surveyor. They will identify the work which needs to be completed which will give you a good idea of the expected costs associated with the project. It will also allow you to clearly see if there is sufficient profit once completed.
As it is a renovation project there will be work to be done, however, there is a huge difference in costs associated with cosmetic improvement and major structural work such as subsidence. The costs of roof repairs, damp proofing and electrical rewiring will also eat into any potential profit. As long as you know what you’re dealing with, you will be able to plan accordingly.
Knowing how much the project will cost will also give you ammunition to get the property at the best possible price.
Purchase the property
Good property renovation projects are in hot demand, so expect competition. Developers keep a keen eye out for future projects. Many renovation properties are sold at auction. Buying a property at auction is a daunting process if you haven’t done it before and you need to keep your wits about you. Ensure you do your research on the properties you are interested in prior to entering the saleroom in order to avoid nasty and costly surprises. Ensure you keep the guide price at the forefront of your mind and don’t get swept away into paying too much if a bidding war ensues! Remember you need to make as much profit from the renovation as possible.
However you purchase your property, whether it is at auction or through an estate agent, be aware of the fees associated with solicitors and agents and factor these into any likely profit.
Time to start renovating!
This is a collaborative post.