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Making Money As A Property Owner
4th July 2014
With the UK property market slowing down, you need to undertake a lot of research before you find a property that is suitable for your needs. The information below shows you how to make money as a property owner, rather than just being someone who invests in property. Enjoy!
Look for opportunity properties
So called `opportunity properties’ are one of the best ways to make money from property. Be forewarned however, that you need to have done your research first and know the costs of upgrades and renovations.
Opportunity properties are gems in good areas, which just need some tender love and care. With some landscaping, painting and renovations, they can either sell for good profit margins or be rented out at good rates of return. Finding these properties isn’t always easy, but if you spend a few hours every weekend researching, you will know one when you see one.
Buying for investment
Buying a property for investment purposes means that the owner will rent the property and wait for the property to increase in value. When looking for investment properties you need to put in more work than when looking for a property for yourself. Funnily enough, many investors look at hundreds of properties when it comes to choosing their own home, but only one or two for their investment property.
You need to consider neighbourhood, rentability, location to public facilities and a range of other factors. It isn’t a decision that should be made quickly. On top of this, you also need to look at your rate of return on the property by look at mortgage size, calculated rents and ongoing costs. It is a complex decision that requires time.
Make sure you buy a property that is in demand for the area
There is no point buying an apartment if the demographics of a local area need three bedroom houses. Research the areas you are looking to invest in and make sure that what you are offering is what the majority of residents need and want. This serves two purposes: One you will actually be able to rent the property out; and two, you will have your choice of tenants as a lot will apply.
Independent valuations and inspections
While a lot of people don’t place much emphasis on these when it comes to profits, they are still vitally important. A £300-pound evaluation can save you thousands of pounds in the future. A £200-pound building inspection could stop you from making a very expensive mistake. Organise these for every property you are looking to purchase. Make sure that the valuer is fully qualified and independent, and you won’t have any issues with the banks not accepting your valuers assessment.
Look at return on investment and appreciation
Successful investors look at both the rentability of a property and how much the property will appreciate. This future proofing ensures that they make an investment that makes them money in the short term, and that they can also sell for a profit in the future. If a property doesn’t allow for both then don’t consider it. Simple! While the above ideas aren’t complex, they will help to ensure that you actually make money from the property you invest in.
A small amount of effort, and some small costs, will seem insignificant if you buy the right property in the right area.
Do you have question about making money as a property owner? Greens Lettings in South East London SE18 would like to help. You can contact us by clicking here.