Three Ways People Can Make a Killing in the Property Market

Image by 401(K) 2012

Houses are a big investment, but they are also a tangible, solid asset, which means that there are always investors looking to make money in the property market.

Going about it in the wrong way, though, can cost thousands of pounds.

Here are four common ways people make money from the property market, and some quick and useful tips to help you get started with each.

 

Renovation

Property renovation is one of the most time- and labour-intensive methods of making money in property.

This makes it feel like a kick in the stomach when your plans don’t pay off, but when they do pay off, they tend to pay off in more satisfying ways, and on a larger scale.

Buying houses with relatively easily-fixed problems that make the building unlivable is a good way to go here, as an ordinary buyer simply cannot buy a home that has, for instance, a leaking roof in the bedroom – unless they have a high tolerance for cold water waking them in the middle of the night.

This reduces demand significantly, which in turn reduces the price much more than it ‘should’ be reduced by.

Alternatively, going for low maintenance and long-term solutions can also help bump the price up – replacing shoddy wallpaper with paints, and exposing bare wooden floorboards rather than covering them up with carpet, for instance.

 

Property ‘Flipping’

Unlike traditional methods of making money in property, making money in property ‘flipping’, at least in its pure form, shouldn’t require you to use time and effort that could be directed elsewhere.

Instead, the idea goes, you buy properties in ‘up-and-coming’ neighbourhoods, and sell once they hit the peak.

Naturally, this carries a degree of risk. As with investing in any stock, the value of your investment can go down as well as up.

There’s no real ‘rules’ for this practice, as it’s more about exploiting outlying opportunities and being able to sense a neighbourhood that’s about to become more expensive. There are some key assets you must have to be successful, though.

Good local knowledge, an understanding of changing demographics and prevailing trends, and an understanding of the legal and practical requirements that go along with making home improvements are all essential qualities in a property flipper.

The bread-and-butter of the property flipper is the same as it ever was, though: “Buy low, sell high”.

 

Repurposing Property

Repurposing property is the most elaborate way of adding value. Property repurposing involves purchasing an old, unprofitable, or niche property, and changing its use completely so that it appeals to a broader or wealthier demographic.

For instance, pubs, which have been squeezed by breweries, clubs, chain pubs, wine bars, supermarkets and off-licenses encroaching on their territory, are often bought and turned into flats.

An important thing to consider here is whether the redevelopment adds anything to the community. If it detracts from the community (by removing a centre for local social life, for instance), aside from the ethical concerns, your plan will be opposed at every turn by any means necessary, and may take years to push through.

Repurposing property is complicated, both in terms of skilled labour and in terms of legal wrangling and diplomacy. The best way to go may be to take up industrial buildings and convert them into domestic or commerce properties, as this is relatively uncontroversial.

 

Making Money Isn’t Easy

Making money isn’t easy, or everyone would do it. If you want to make money reselling property, you either have to assume a great deal of risk, or you have to work very hard to get an advantage.

The rewards are there, but you’ll have to work hard and learn a lot to get them.

Attached Images:

James Duval is a business writer for eMoov, an online estate agent offering an alternative to percentage-based high street estate agents.

Speak Your Mind

*

Spam protection by WP Captcha-Free