We always hear it: “property is a good investment”. Now, if you’re like my daughter that incurred a lot of debt when she and her husband bought their first home, you may wonder how ordinary people can buy other investment properties. But when you watch telly, you get flooded with these lifestyle channels showing the Property Brothers, House Hunters and all that – programs which make investing in property look so accessible. Even my daughter is now thinking about purchasing an investment property because of these shows, despite still paying for the mortgage of her house.
So, is it really possible for ordinary mums and dads to get into property investing?
If you asked me a few years ago, I would’ve said don’t risk it. But thanks to technology, I have encountered quite a number of experts that have shown concrete steps on how to invest in property without burying you in debt. One of those methods is the Fix and Flip, which high-profile investors like Rick Otton have discussed about in their programs (We Buy Houses Podcast Episode 139: Top Tips From Fix And Flip Expert)
Cost vs. Gains
For the budget conscious, investing in property renovation can be a sensible option. A home that needs renovating can be bought at really good bargains. And these types of houses don’t necessarily have to be run down. If you know what you’re looking for, you can snag great deals for houses that only need minor tweaks, which improve their value significantly. (For more info on these types of fix and flips, just tune in to Episode 139.)
For the few thousand dollars spent/invested, you can often double or even triple your investment as long as you spend it on the right things. As well as adding capital value to the property you can also increase the sale ability. Time must not be an issue for such projects because a house with a good facelift is always liked by potential buyers, thereby increasing chances of a lucrative resale.
A quick example of increasing the building capital value as well as saleability and rent ability is adding a garage or carport. If the property has the space to add a car shelter and it does not have one, future buyers or tenants will see the added value. When you rent a property you can often recover the cost of the work from a tenant within two years. After that, the extra rent you charge will be pure profit. On top of the rent amount, if you are making additional changes to the property at the same time, your bank will take the renovations into consideration when you get the property revalued.
Property renovations are normally undertaken on the whole structure and look of the property and this also includes the electrical cabling, furnishings and even the colour schemes. The whole concept of renovation is to improve the property such that both its usefulness and comfort level rises. Owners can even enjoy a value increase of up to 50% on their property if the restoration has been a good one.
Any good renovation must primarily target at improving the looks of a property. If the refurbished interiors wear a modern look, then buyers who are normally conscious of the newest trends in interior design would be more tempted towards making a purchase.
Professional service of a qualified interior design expert is a must for proper refurbishing. Even if you do not want to restore the whole house, the interior designer can recommend certain intelligent enhancements in certain parts of your house that will make it more attractive to the buyers.
For instance, an interior design expert knows how to generate good results by putting in a few architectural details at minimal cost. The design on the floor and the colours of the walls can make the room look brighter and more airy. Advice on the edifice and the need for reinforcements can also be provided by an interior designer. Being widely experienced, he can suggest you the correct strategy, taking your spending capacity and requirements into account.
With an interior designer by your side, you can also be guaranteed of quick availability of sturdy makeover materials at affordable prices. Buying the materials and appliances at discounted prices is something that is effectively managed by these people. They can also tell you how much time would be required for the entire restoration project to complete.
It is also a sound decision to get some updated information of the real estate sector from a seasoned property broker to understand what is it that potential buyers are looking for. After all, the whole purpose of the renovation is to please them to be able to fetch a bigger price for the property.