The main key factor in successful property investment is of course research. Having a sound knowledge in the business of investment will provide a solid foundation to build success upon- especially in a world full of risks. Although there are many different investment options the most popular still remains to be house flipping, which involves buying an investment property and reselling to make a profit.
House flipping can be an effective way to make a good return but does require the general hard yards and a good purchase to start with. It can be helpful to get professional advice, property investments companies can provide the industry knowledge that can help ensure a successful venture. Investors also need to rely on the market so never count on flipping within a certain time-frame as it is always very difficult to predict the property market. There are particular tricks that investors use in order to reduce the risk of a bad investment with house flipping so read on to discover some of the key elements ensure success.
Image Credit: www.propellorproperties.co.nz
Property Shopping
When you start looking at properties be sure to take a clipboard to make any important notes about issues you may forget once you have returned home. Take note of everything from house size, layout, finishings, damage and landscape. This way you can gauge an estimation of renovations and forecast the financial side of the investment.
Note if the house has any unusual or odd characteristics. Occasionally there are homes that have poor layouts, for example avoid living areas that don't receive sufficient sunlight and rooms that can only be reached via another room. These functionality issues occur commonly amongst older homes and today's buyers will take notice as it's an expensive job to fix. Just as important is the outside structure, look for any extensions that seem to stick out in a way that disrupts the flow of the original structure. If you find any of the above issues, it's best to keep looking to avoid costly repairs and restructuring.
With all of this in mind we still need the property to have a unique feel to show buyers they will own something a little different from the rest of the street. This will make your property more appealing than the other 'plain Jane's' in the area.
Spend time researching the location you intend to buy in as this will have a strong impact on your sale figure. Homes in good areas fare well during property slumps and houses come up for sale less frequently. Remember buyers are also researching the location so be sure to investigate crime rates and noise levels because, for example, an Auckland property investment beside the motorway may have a lower market value and be harder to sell. Try to buy in suburban areas that are in close proximity to local amenities, this can be included in the sales pitch. Ensure the location matches the target group's expectations.
It is easier to buy for a target buyer group rather than just buying any old property you come across cheaply, this way you will have a general idea of location, budgets and property type. Family homes are the easiest to get rid of and fetch a middle range price, these buyers prefer homes with renovations already complete which works perfectly in your favour.
Upon the selection of a suitable property the last step would be to order a comprehensive house inspection as this could be the make or break of a sale. An inspection will provide an insight into the homes structural stability and highlight any trouble areas that would need costly repairs. Cosmetic renovations are affordable, major structural repairs are not. Hold on to that inspection if the sale goes through as it will offer a selling point for potential buyers later on.
Once ownership of the property has taken place a budget must be worked out for completion of the necessary renovations. It is imperative to complete the least amount of work while achieving the maximum wow factor. If any professional work needs to be done never hesitate to hire a professional contractor. Fixing up DIY muck-ups is both a waste of time and money. Simple jobs such as paint, curtains and general tidying up can be completed by you, saving a few dollars. Don't go overboard with designer paint or fittings, generally neutral tones will achieve the same result for a much lower price tag.
After the completion of renovations the house will need to be listed on the property market. Real estate agents will make sure your property receives the attention it deserves as well as providing a liaison for buyers and vendors. Shop around to find an agent that comes recommended while still offering a fair fee. This fee is deducted from the sale of the house so remember to factor it into the budget. Once the property is listed it's time to sit back and wait for a buyer!
To sum it up, the best fix and flip properties are those that require simple renovations to achieve the maximum increase in market value - as well as buying for a large target market. By focusing on starter homes in good areas that are not economically obsolete, you can dramatically increase your odds of success. Happy buying!
House flipping can be an effective way to make a good return but does require the general hard yards and a good purchase to start with. It can be helpful to get professional advice, property investments companies can provide the industry knowledge that can help ensure a successful venture. Investors also need to rely on the market so never count on flipping within a certain time-frame as it is always very difficult to predict the property market. There are particular tricks that investors use in order to reduce the risk of a bad investment with house flipping so read on to discover some of the key elements ensure success.
Image Credit: www.propellorproperties.co.nz
Property Shopping
When you start looking at properties be sure to take a clipboard to make any important notes about issues you may forget once you have returned home. Take note of everything from house size, layout, finishings, damage and landscape. This way you can gauge an estimation of renovations and forecast the financial side of the investment.
Note if the house has any unusual or odd characteristics. Occasionally there are homes that have poor layouts, for example avoid living areas that don't receive sufficient sunlight and rooms that can only be reached via another room. These functionality issues occur commonly amongst older homes and today's buyers will take notice as it's an expensive job to fix. Just as important is the outside structure, look for any extensions that seem to stick out in a way that disrupts the flow of the original structure. If you find any of the above issues, it's best to keep looking to avoid costly repairs and restructuring.
With all of this in mind we still need the property to have a unique feel to show buyers they will own something a little different from the rest of the street. This will make your property more appealing than the other 'plain Jane's' in the area.
Spend time researching the location you intend to buy in as this will have a strong impact on your sale figure. Homes in good areas fare well during property slumps and houses come up for sale less frequently. Remember buyers are also researching the location so be sure to investigate crime rates and noise levels because, for example, an Auckland property investment beside the motorway may have a lower market value and be harder to sell. Try to buy in suburban areas that are in close proximity to local amenities, this can be included in the sales pitch. Ensure the location matches the target group's expectations.
It is easier to buy for a target buyer group rather than just buying any old property you come across cheaply, this way you will have a general idea of location, budgets and property type. Family homes are the easiest to get rid of and fetch a middle range price, these buyers prefer homes with renovations already complete which works perfectly in your favour.
Upon the selection of a suitable property the last step would be to order a comprehensive house inspection as this could be the make or break of a sale. An inspection will provide an insight into the homes structural stability and highlight any trouble areas that would need costly repairs. Cosmetic renovations are affordable, major structural repairs are not. Hold on to that inspection if the sale goes through as it will offer a selling point for potential buyers later on.
Once ownership of the property has taken place a budget must be worked out for completion of the necessary renovations. It is imperative to complete the least amount of work while achieving the maximum wow factor. If any professional work needs to be done never hesitate to hire a professional contractor. Fixing up DIY muck-ups is both a waste of time and money. Simple jobs such as paint, curtains and general tidying up can be completed by you, saving a few dollars. Don't go overboard with designer paint or fittings, generally neutral tones will achieve the same result for a much lower price tag.
After the completion of renovations the house will need to be listed on the property market. Real estate agents will make sure your property receives the attention it deserves as well as providing a liaison for buyers and vendors. Shop around to find an agent that comes recommended while still offering a fair fee. This fee is deducted from the sale of the house so remember to factor it into the budget. Once the property is listed it's time to sit back and wait for a buyer!
To sum it up, the best fix and flip properties are those that require simple renovations to achieve the maximum increase in market value - as well as buying for a large target market. By focusing on starter homes in good areas that are not economically obsolete, you can dramatically increase your odds of success. Happy buying!
About the Author:
Enlist the support and advice you need to make your real estate investment venture a success with Propellor real estate investments.
