The real estate industry is a lot like a maze. Like the most complex mazes, there are a lot of routes in and often only one truly correct path. Other paths will either take too long or lead to dead ends, and that’s exactly what will happen if you start off at the wrong point investing in property. You’ll get lost, trapped and confused before it’s out. What makes things even more complicated is that with this maze, the paths through are constantly in flux. One minute your best option is to buy apartments and the next, well, the maze has shifted.
This can make it difficult for new real estate investors with money to spend but no knowledge of how to make a property investment work for them. Today, we’re going to look at some of the easiest ways into the maze and ensure that you don’t make a massive mistake as you’re just starting out. There are a few choices to consider here.
Focus On Your Own Home
The first option and perhaps the best is to just focus on your home. A lot of people make a killing simply by selling their own property, and yes, this does count as a property investment. Let’s explain how this works and what you’ll need to do to see an ROI.
Okay, you might buy your home for around 100K. That’s great because it means, assuming you have a solid income, it won’t take that long to pay off. For that price, the mortgage repayments should also be under control as well, hopefully giving you spare savings each month. This means that you can put money towards renovations.
Before you buy the home, you should consider the roof. Certain roofs are very easy to renovate into a third floor. So, make sure you check this out, looking at how much headroom you have in your home. Hopefully, there’s quite a lot, and if that’s the case, you just need to upgrade the side roofing. This can be accomplished by a expert contractor and often you don’t even need planning permission.
You can also think about making changes to the kitchen and bathroom. Statistically, renovativations in this area will add the most money to the value of your home. Essentially, you just need to work on keeping it modern, fresh and exactly what new home buyers are looking for. Do this, and you can add around twenty percent to the initial asking value of the home, earning a nice little profit. It’s solid, but it’s not a massive investment so let’s explore another possibility.
Buy The Holiday Home
The holiday home option is ideally suited for people who have a nice little nest egg and aren’t doing much with it at all. For 200K you can buy a great holiday home in a variety of different places around the world. In fact, some holiday destinations have homes that sell for a lot less. Even if you don’t have the nest egg, you can still consider this possibility because you can borrow and then buy. Now, if you have a mortgage, you’re probably wondering how you’re going to afford the cost of that holiday home.
There’s good news on that front. You just need to start renting it out right away. If you buy the home in a holiday hotspot, market it will keep excellent standards, you’re going to make a fortune through the summer months on this property. Within a few years, if you don’t spend it, you can use the money you make to completely pay off the property.
There are only a few things you need to watch out for. First, do make sure that you use a property agent to find the right home to buy. You can view LJ Hooker for more info about this and what you should be looking for when hiring an estate agent. Basically, they can help you find the ideal holiday home for you at the right price.
The other issue is downtime. There are two types of downtime in the holiday home market. First, there are the off peak holiday times through the year. You can still make profits at this time, but you need to make sure you drop the prices. Watch other homeowners in the area to find out where roughly you should be targeting for charges. You also need to watch out for a hit on the market as a whole because holidays are a luxury commodity. If the market gets hit, people no longer buy those expensive trips to stay at your beautiful villa.
Invest In Student Housing
You may also want to think about investing in student housing. Why invest in this specific type of property? Students want the bare minimum. They want a nice, fairly modern place to live that is secure, and that’s it. So, you can buy multiple apartments, invest in bulk in wholesale furniture and kit it all out on a tight budget. As long as you keep health and safety standards on point, you won’t receive any complaints.
One downside is that students move out through the summer, leaving properties empty. You do need to take this into account for your costs otherwise you’ll be in for a nasty shock. The extra benefit? Students have guarantors who essentially act as safety nets. There will always be someone legally obligated to pay the rent and the bills, even if they can’t.
Go In As A Group
Lastly, one of the biggest issues with property investments is the massive risk that is attached when you’re handling huge levels of capital. To deal with this, we strongly suggest that you think about entering the maze as a group. By doing this, the costs are fractional and the individual potential losses minimal. But, if you all put the effort in you can still see the huge profits that people speak of when boasting about their own experiences on the property market.
We hope this helps you navigate this weird, wonderful maze, practically bursting with profit potential.