Tag Archive | Property Market

Should You Really Invest in Property?

In some ways the very opposite of making money online would be to invest in bricks and mortar, and start a property development business, however, when you compare the two methods of making money there are some huge similarities, as in both cases, people are building assets they then leverage to create passive income.

In the case of the property developer, they are doing this by renting out their property whilst the blogger for instance, is renting out space on their website… in both cases, they are leveraging an asset to create income rather than trading their time for money in the linear way most employees do.construction-process

The best way to make money, of course, is to invest.  A lot of people today are looking into cryptocurrency and concepts such as IHT Coin, which is relevant to real estate, yet an equal amount of people are a little timid about the prospect of all these “new” ways of making money and prefer something more traditional such as investing in property.

This article offers some give some general guidance for people thinking of dipping their toe into the idea of buying an investment property.  It’ll help you think about where to find a property, what to buy, and who to rent it out to.

WHERE TO BUY

Many amateur property investors choose to head to an auction, thinking this might be the best place to grab a deal, and in some ways they are right – however, one must thoroughly look into the reason the property is being sold at auction rather than by a real estate agent.

It can be as simple and innocent as the bank that has foreclosed on the house has a policy to sell at a specific auction, and in these instances, that’s fine… but just be aware that some houses might be going through auction as the owner knows you won’t be able to do a full inspection of the property.

Furthermore, it can be very easy to get caught up in the psychology of the situation at an auction, where your bids can well exceed your budget for a particularly property as the bids almost hypnotically spiral upwards.

WHAT TO BUY

There are several factors to consider that will require significant research; such as crime rate, the quality and proximity of local schools, transport links, and social amenities.  

If you are able to get your hands on some insider insight, such as from the local council, to understand what the next five years will bring to the area that would be helpful; for instance you would want to find out if a new sewage treatment was opening up in a few years time.  The point is, to do your homework, as whilst it might feel onerous and perhaps even costly, it will definitely pay off in the long run.

On this point, you might want to consider purchasing in an area that you are already acquainted with rather than going in blind.

WHO TO RENT TO

The next question is why to rent to, and within this, there are three core markets: students, professionals and those on government benefits.

Now, the wonderful thing about students is that their parents will often act as guarantor and are often willing to pay up front for a whole semester, or even academic year, which means this can be a very financially reliable way forward.

That said, the downside, is that students can be messy, disrespectful and noisy to the point they could disrupt neighbours and not always look after your property very well.

 For this reason, if you are buying a property with a view to renting it out to students – you’ll want to essentially buy a basic shell of a property that is fitted with relatively cheap carpet and furnishings that are all easy to replace.

The pros of professionals are that they are the most likely genre of people to keep the house tidy, conform to the rules, and pay their rent on time.  That said, there are plenty of professional people that end up falling behind with rent, and interestingly enough a large portion of eviction action, in court, is pursued against professional people.
Whilst there are some social disadvantages to consider in terms of the reputation and stigma of this demographic, there are plenty of people in receipt of government benefits that will take good care of your property.  

The main advantage when renting to someone on benefits is that you can set it up so the government pay you directly, meaning you are getting a reliable check in the mail from the government. This, therefore, makes renting out your property to people on benefits a surprisingly attractive and reliable option.

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What Really Goes Into A Property Development Business?

If you have an eye for investment, the housing market, and making a property as appealing as possible, you may want to find a career capitalizing on those skills. Property development is more than just building and it’s more than just buying and selling property.

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It’s the step-by-step process of finding, improving, and selling properties for a profit and it can be a hugely lucrative business in the right market. But what goes into getting such a business off the ground? What are the skills you need, the partners you need, and the processes you have to go through?

The funding

Property development is all about making investments pay off. As expensive as property is, of course, you’re not necessarily going to have all the cash you need to get started on hand.

All throughout your career, in fact, you’re likely going to have to keep finding and tapping sources of funding.to avoid eating the brunt of costs yourself. Property development loans don’t work like new build loans, either.

You don’t get the lump sum of cash all in one go, but rather it tends to be split into different stages, each stage representing a stage of development. For that reason, experience in creating and working to budgets on developments in the past could be crucial.

The strategy

Not all property development business work exactly the same, either. You might have a wildly different profit model from another business in the same market, for instance. In plain terms, your profit model might be based strictly on the purchase, development, and sale of land and property.

Or, depending on what your local market is like, it might be based on buy-to-let or build-to-let properties. You need to figure out your market, which of your options is going to be most profitable, or if perhaps you need to mix both strategies to some degree and come up with the appropriate business plan.

There are templates available to help you craft it, essential as it is. If you don’t have the path to profit laid ahead of you, it is going to be all the harder to find it.

The speciality

Most property developers specialize in some kind of property or some kind of investment opportunity. The most common kind is those who buy, renovate, and sell resident homes to the private market.

But you might focus on acquiring land and building new properties or developing properties for commercial entities instead. Finding a niche is valuable because it gives you a specific market to focus on. Properties have to be developed not by any one rule-book but catered to the specific buyer or tenant.

Learning what their priorities will be can allow you to focus your budget more specifically on what is most important about the property for them, not just a scattershot approach to increasing the value of a property.

The location

There’s one rule in property development that you have to learn above all else: you don’t make your money when you sell a property, you make it when you buy it. For that reason, opportunism is one of the key factors in a successful property development business.

Finding those opportunities for profit is all about location, first and foremost. You need to get to know different areas, look for the signs of neighborhoods that are on the rise, changes in demographics, whether a city or area is more rent-friendly or more profitable for buying and selling, and so on. Pay attention to rent price, to recent sales, and to signs of development in an area such as new services and businesses opening there.

The timing

Opportunity is all about timing, as well. The housing market has its ups-and-downs not just in the grand scheme of things but from year to year. To profit as much as possible, you need to buy when prices are cheap, then develop and hold onto properties until prices are high again.

Finding the ideal time to buy and sell might not always depend on seasonal shifts, either, but on market dynamics. It’s a good idea, once you’re up and running, to sell property before you buy, so you don’t always have to rely on bridging loans that can impose some restrictions on your overall budget.

The connections

As a property developer, your expertise is going to be in finding the best possible opportunities for property development. You are likely not going to be a contractor or renovator yourself, so you need to build connections within those industries to make the actual development side as painless and cost-effective as possible.

This includes builders, utility fitters, painters, renovators, architects, and companies that rent out equipment like diggers and tip trucks. Fostering connections within these industries is crucial. The better your relationship, the longer you’ve worked with them, the more likely you are to benefit from better deals.

Beyond just searching for these services like a consumer would, take the opportunity to network within trade shows that tend to act as a shared space for many of these services.

The marketing

The property market isn’t the only one you need to concern yourself with. You need to focus on building a brand as a property developer to the market of consumers, as well. This includes learning to market the properties you develop and doing so without the assistance of realtors can reduce your overall costs.

But property developers can also extend their services to others, such as landlords or property owners who want to increase the value of their own property. If you offer your development services to others, then you have a strong brand.

This includes having the right digital brand, but it also includes having show homes created in conjunction with interior designers and stylists to give an idea of the final product you offer.

If you don’t have any experience either in renovations, property investment, or construction, then it’s probably a good idea to get some. You need to know the market and what’s involved before you try to make a career profiting from it.

 

What Are The Safest Investment Ideas?

No investment is entirely risk-free. However, there are some options in which the odds are certainly much more favorable. Whether you have a small amount of money or a large sum to play with, you’ll want to invest wisely in order to get the largest return possible. This means doing a lot of shopping around.

If you have the funds, an investment broker may be worth investing in – a professional who can do the shopping around for you and place money into the right stocks at the right time. Of course, hiring a broker does take trust and many may prefer to save the money by taking the gamble yourself.

business-idea

If you’re currently unsure where to put your money here are some of the safest bets that might be worth researching further.

Property

Getting on the property ladder is hard work, but once you’re on the first rung, moving onwards and upwards gets a lot easier. Most property naturally appreciates over time, so if you have the funds to pay off a mortgage you can sit on a property a few years and slowly get your return.

Of course, there are faster methods such as renting out property – in which your rent covers the mortgage. This entails a lot of work as you have to ensure there is always a tenant and that various laws are always met and that repairs are always carried out on time. However, if you eventually decide to stop renting and sell, you will earn the entire value of the house plus any appreciation value it has gathered over time.

Renovating property is another popular option – which involves doing up a house to increase its value and then selling. Other techniques can include buying big and downsizing, buying a house in an upcoming area or flipping property. With new properties being built all the time and interest at an all-time low, there has never been a better time to invest in real estate.

Gold

Gold is never going to become worthless, unless we uncover a massive gold mine on another planet one day. Prices tend to fluctuate but will always return to a steady incline, many considering it a ‘safe haven’. Political tension is currently causing many investors to turn away from company shares in exchange for gold.

You should always research gold firms to make sure they have a consistent A + rating. This investment is suitable for any amount of money, although you should make sure the gold you’re buying is something you can sell when you need to.

Social Media

Only recently has this become a big area for investors, largely because the forecast has been difficult to read until now. Sites like Myspace proved that a social media site could become hugely popular and then fade away in a few years.

Many worried this may be the case with Facebook and Twitter, however, they have proven their stability and only seem to be growing, making it unlikely that a new social media giant will come along and seize the day anytime soon.

In fact, like Google, these social media platforms have almost wiped out all competition (although Instagram and LinkedIn are also still relatively safe bets). Having a good understanding of how social media works, and where to invest is important. This site offers more information on the matter.

Cloud technology

Investing in new technology can be risky, especially in this fast-paced digital age. You may find the next big thing, but another next big thing may come along eventually and swallow it up (for example vinyl being replaced by cassettes and then CDs and then downloads and now streaming services like Spotify).

Right now, cloud technology appears to be the next big thing – growing at a rapid 28% year by year. More businesses are seeing the potential of cloud storage – a technology that allows you to work on information remotely from any location without using storage spaces on your personal devices – and this seems to be the forecast for the next few years.

Perhaps a new intangible technology will replace it in years to come, but it’s unlikely to just be a fad. As a short-term investment, it may be the most profitable right now.

Cybersecurity

Digital security is much needed in this constantly growing digital world. Software is constantly having to evolve to protect against new viruses and hacking methods. This makes it a good source of investment, that’s likely to be profitable for years to come.

Whilst investing in startups can be risky, new businesses in the cyber security industry may be some of the most profitable. Creating digital security software may cost some money, but maintaining it doesn’t (unlike other companies that may require office space or large workforces to pay for). This means the profits will always be larger. It’s one of the few investments which benefits both the startup and investing firm.

As with all other investment plans, you should do your research first. Get to know the startup owner and their background to ensure that their business plan won’t be a flop.

Renewable energy

Oil prices have started to bottom out as more and more people are becoming environmentally aware. Businesses are going all-renewable as a way of marketing their business and even homeowners are starting to fuel their homes on renewable sources such as solar energy in order to cut their electricity bill.

As a result, there’s never been a better time to invest in renewable energy. With the demand constantly growing, more and more wind farms and solar panel companies and electric car manufacturers are springing up.

Wind farms have become a particularly popular option due to how lucrative they have proved to be. Once set up, wind farms require hardly any funds to keep running resulting in a huge profit.

Of course, you should always gather background knowledge before going down this avenue – you don’t want to invest in the construction of a wind turbine, only for it to be ripped down by a local council two years later because the neighbours found it an eyesore and petitioned for its removal. Get to know the location in which you are investing your money and whether the people there are behind environmental projects.

Foreign currency

Due to today’s political climate, you could argue that this is very risky investment strategy. However, as a short-term money-making scheme, it can gain you a healthy return, so long as you keep abreast of foreign news and currency exchange rates.

Track the history of a foreign currency so that you can get an idea of where it’s headed and how volatile it has been in the past. Find one that seems to have a fairly predictable curve to it and make this your currency of choice.

Unlike other investments, you can pour pretty much any amount of money into this from several grand to £10. Of course, you will have to take into account the transfer cost, which varies massively from company to company. Transfer companies will often provide different rates for different amounts, so bear this in mind.

ETFs are generally a safe bet as you don’t have as much leverage-related risks. CurrencyShares and WisdomTree are two of the largest and most reliable ETF providers. Those that want to invest in foreign currency directly should look into Forex trading.

Tips For Getting The Most Cash From A Property Sale

Real-EstateWhen it comes to selling a property, whether for personal or commercial reasons, you’ll need to perform a lot of research. Believe it or not, there are lots of techniques you could use to ensure you make the highest profits possible.

 

Most of them are pretty simple, and so you should read the information in this article carefully. With a bit of luck, you could end up earning thousands of dollars more from the sale if you’re smart. It’s all about timing, and making sure you have the best information possible. Of course, there are always elements of luck and chance involved too.

Research annual market fluctuations

While it’s impossible to predict when the property market might boom, you can take an educated guess. Prices will always increase over a long enough period. However, it’s the small alterations in value that make all the difference.

For instance, you should never try to sell a house during the month of January. As buyers spent so much cash at Christmas, they are less likely to make a decent offer. Likewise, selling during the summer is always a wise move. People feel happier and more willing to spend cash and work hard.

There are lots of blogs and magazines you could use for advice. So, make sure you subscribe to some of them as soon as possible. That way, you will have enough information to capitalize and make a killing at the right time.

Renovate the property first

People selling their family home should remove all personal photographs and decorate before viewings. That way, potential buyers will see the property at its best. Those selling for commercial purposes should strike deals with local contractors.

Experts like Kell won’t charge the earth for their services. In most instances, they just have to bring the home up to scratch and ensure it’s clean and tidy. Business owners won’t have enough time to handle that task without assistance.

So, take the time to research painting and decorating companies as soon as possible. In most situations, it’s feasible to complete an entire house in a matter of days. That means the job shouldn’t hold up the process of selling too much.

Contact the experts for advice

There are many specialist property advisors out there who can point you in the right direction. Whether you have issues with pricing, regulations or anything else, help is at hand. You might have to pay a small fee to get the information you require. However, it’s worth the expense.

Members of The Lars Group claim many clients can receive up to 10% from a sale after seeking guidance. That might equate to thousands of dollars depending on the initial value of the property. At the end of the day, that strategy would help you to save a lot of time, and it could also give you a little more confidence.

Now you know how to get the most cash from a property sale, we hope you won’t lose out in 2017. There is nothing worse than knowing you sold something for $300,000 only to discover you could have made a lot more. So, don’t rush into anything, and always get the best tips and information before you begin.