If you have money to invest, property remains (even in the current economic climate) a lucrative option. In fact, this is the perfect time to pick up property bargains to add to your portfolio.
And, reassuringly, housing transactions have stayed constant for the last four years at 1.2m per year (with some variation across the country). But thanks to fluctuating house prices and a lack of buyers, there are lots of potential investment opportunities for both established property investors and those just starting out with their property business. If you need help with housing, take a look at Sky Marketing for new housing opportunities.
Depending on your circumstances, there are different types of property business – you need to find the right one for you. Here are seven tips to help you get started.
What is a property business?
A property business can be anything from owning only one or two properties that support a pension plan or a large-scale cash-flow business boasting a rich portfolio of multiple properties.
But, what if you’re cash poor? Don’t worry you can still embark on creating a successful property business. In fact, in some cases, you don’t even have to buy the property yourself. Instead, you can act as a property source or join a partnership venture—either way, to get to reap the benefits of an investment.
So, if you’re new to the property investment market and you’re not sure where to start, here’s a quick run-down of what your options are:
1. Identify The Right Opportunities
When you’re starting your property business, you’ll need to take advantage of as many profitable investments as you can. Not all of these will be made the same, so you’ll need to get adept with figuring out what’s what. You’ll naturally want to focus on high-return property investment opportunities, so knowing how to spot them is vital.
Once you’ve gotten a few of them, it gets much easier to do this. Consider market conditions, the condition of the property, and similar factors to see what you’ll need to put into it and what you could get out of it.
2. Property Auctions
If you’re looking for a wider choice of properties for your business portfolio, online property auctions are the perfect place. Whether you’re searching for a piece of land, a doer-upper, or a rare, unusual property, property auctions provide more investment opportunities than a traditional estate agent. These auctions allow you to attend the event in online, watch the bidding war in real time and, if you’re the highest bidder, pay a deposit and the next stages of the sale quickly follow. Take a look at Flick & Sons property auctions for more information on how this works.
Being a landlord isn’t for everyone. Also, thanks to a recent tax clampdown and the introduction of a 3 per cent surcharge in stamp duty, the buy-to-let market has cooled down in recent years. The number of buy-to-let mortgages decreased by 36 percent between 2015 and 2017. Despite this, due to falling house prices, it’s still a good time to pick up a deal, which is great news for newbies.
Here are a few tips to kick-off your buy-to-let business:
- Find out about the housing market in your target area—can you afford it and is there a rental market?
- Know your tenant profile and make sure you cater to them (not yourself). For example, if you’re targeting young professionals, you need a modern property close to transport links and social amenities.
- Carefully choose a location. Is it close to where you live already, so you can manage the rental yourself? Is there are rental market? Are the amenities close by? Will the area appeal to your target tenant?
- Calculate your rental yield—this is the annual rental income against the value of the property.
- Don’t forget to factor in maintenance costs (such as cabling, TV aerial installation or repairs) the cost of no occupancy, and mortgage payments into your budget so you can plan ahead.
If you want to be a property developer, you need to embrace a slightly different mindset than if you were buying to rent. For starters, location is paramount here. As is finding the right seller—so keep them in mind when you’re sourcing potential properties. The aim is to make your money when you buy not when you sell. And, if you’re a cash house buyer, you can move more quickly to secure a deal or pick up a bargain at an auction. If you need some capital to get your first buy, look into quick and easy loans like an instant online title loan or a HELOC.
5. Property sourcing
Now, this is a bit different as you’re acting as an intermediary, so you’re not spending your own cash. Property sourcing involves finding properties with potential that you then sell on to investors charging a fee. There are lots of benefits to this approach—it’s a great way to make contacts, build skills in the housing market, you can do it without investing your own money and avoid some risks associated with starting your own business.
6. Stay close to home
Let’s say you don’t have enough money to buy a property. If that’s the case, don’t hang up your business hat immediately. For instance, if you live in a large property already, but don’t need the extra space, you can rent out unused rooms and generate an additional income to supplement your main one or as part of a pension plan.
7. Invest with others
No rule says you have to fly solo. Paying for a deposit or buying a property outright by yourself can be both daunting and risky. Why not shoulder the responsibility with others and embark on a joint venture with other investors?
With more investors, someone else can help manage the portfolios and shoulder the financial responsibility. Also, by combining your resources, you can make your money go further and maximise profits. Your investors can also consider applying for title loans online to get the most out of the investments!
8. Last bits of advice
If you want to build a successful property business keep the following in mind:
- Be willing to play the waiting game.
- Diversify your portfolio.
- Learn to spot potential.
- Always look for ways to add value.
- Do your maths—become tax-efficient
9. Don’t forget to have an exit strategy
And when you’re no longer an active investor, depending on whether you own your properties outright or have a mortgage —this will impact your tax responsibilities. Also, you can hold onto your portfolio, sell it, split it or restructure it. But, it’s always best to check with an advisor.
Need help to sell a property quickly?
As you’re likely aware, when it comes to the property market, things can change overnight. So, if for whatever reason, you find yourself in a position where you need to sell any of your houses quickly, companies like House Buy Fast can offer you a range of services to help you. For more information go here—https://housebuyfast.co.uk/