Magical Penny

In today’s economic environment, real estate investments are more appealing than ever. There are many possible routes to take, and investing in fixer-uppers is one of the most attractive. After all, developing a property by giving it the TLC it deserves should bring huge financial rewards, right?   

 Delving into the world of fixer-uppers can certainly be very rewarding. However, it isn’t always as great as it’s cracked up to be. Here’s why you must learn to view the full picture.

They Signify A Huge Risk

 All investments carry a risk. When physical assets, such as property, are involved, the health of those items is key. While there are no guarantees, even with new builds, there is no doubt that the risks are greater when dealing with unloved properties.

 In the best scenarios, all damage will be cosmetic. Hiring an independent property surveyor will give you the best chance of spotting any very costly problems. However, there’s still a good chance that they will miss things. If you don’t have the budget to deal with those potential issues, it might be best to steer clear.

 The last thing you need is to be left with an unfinished project that will struggle to sell fast or well.

Delayed Return On Investment

 When entering the world of investment, you’ll come across various terms. Return on Investment, or ROI, is probably the most important. After all, the whole point of getting into this game is to make money. As an investor, you want to see quick returns. That might not always be possible with a fixer-upper.

 After purchasing the property, you’ll need to complete the transformation before thinking about the next step. If all of your capital is tied up in this project, it could delay progress elsewhere. Conversely, when done right, this type of investment can yield big returns in just a matter of months. Still, appreciating the full situation is key.

They Will Consume Your Time

 For most investors, those activities are a secondary income. Therefore, it’s important to prevent them from causing negative impacts on your primary career. The ability to take a backseat role is just one of the reasons why a growing number invest in overseas property. Because if you can make money without working hard to do it, it leaves more time to enjoy those proceeds.

In truth, fixer-uppers are best left for those who wish to complete them as a labour of love. If money is your main motivator, gaining profit in a time efficient and stress-free method should take priority.

Profits Aren’t As High As You Think

 The thought of high ROIs is unquestionably one of the main selling points behind the popularity of this route. However, those profits may not be as high as you’d think. After all, there are many other costs that must be factored in.   

 Delays to work can result in increased costs while marketing and other elements can dent profits too. While a traditional buy to let idea can offer problems, it might be the better way to see quick revenue and large long-term returns. After all, rental income gives you a return without relinquishing the asset.

This post shouldn’t be viewed as a warning to never use fixer-upper investment opportunities. Nevertheless, it is a reminder that there’s more than one way to achieve success in the real estate market. Finding the right option for you is the first step en route to profits.

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It seems, at first glance, that life as a landlord is an easy one. You buy the property and then the rest comes easily; the tenant pays the money, you pay the mortgage, and you still own a property as a valuable investment asset. Put like that, it sounds pretty ideal.

The truth is somewhat murkier. While that can be the case, the majority of landlords will find themselves falling on rough times more than once over the course of their careers. If you find yourself in one of these tough spots that are the most common for landlords to experience, then here are a few suggestions on getting through them.

Problem #1 – Lack Of Renters

It happens. The house is ready to go, you’re happy to hand the keys over to anyone who is interested… and no one is interested.

Like anything else in the world of finance, the rental market goes through peaks and valleys in terms of demand. Even something as simple as the time of year can influence the number of renters who are in the market for property. People tend to move more in spring and summer, so you could find yourself in the midst of a bleak winter without a tenant in sight.

Solution: If you can’t find long-term renters, then why not look for short-term? Airbnb and similar services have made it possible to make good money from short-term lets, which may only last a couple of days – but it’s a couple of days of money towards your mortgage payment. With Airbnb management services, you don’t even need to worry about the hassle of coordinating the whole process for yourself – just sit back and wait for some much-needed income.

Problem #2 – Ruinous Renters

Every once in awhile, a landlord will experience a tenancy that seems to be nothing but trouble. From not paying the rent to causing problems with the neighbours, difficult tenants are a rite of passage for those letting property – not that knowing you’re not alone makes it any easier to handle.

Solution: Know your rights when it comes to what a tenant can and can’t do. If they’re not paying rent or if they’re causing you undue stress, then don’t flinch about starting eviction proceedings. You have bought an investment; you’re not in this to babysit someone who doesn’t seem to have their life together. It’s better to have the house empty for a few months than continue having it occupied by someone who is more trouble than they’re worth.

Problem #3 – The Aftermath

Most tenants that you experience will treat your property like their own home. Any damage caused will be more than covered by their deposit, so you’re not going to have to worry about being left out of pocket.

Then again, there are the tenants who will move out – perhaps even without telling you – and leave an almighty mess in their wake.

Solution: While it may seem invasive, requesting – in writing – access to the property on a monthly basis is a sensible way of preventing this. This gives you the chance to notice any problems as they arise, and potentially even evict tenants who are causing harm and expense. This is the best way to avoid having to fix a huge list of problems once they finally move on.

Life as a landlord can be tricky, but by following the above, you should be able to exert some level of control over your investment. Good luck.

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Investing in property is always a popular option.

It can be so much more personal than investing in gold or even stocks. What’s more, there are several revenue streams that you can generate from your single investment. You might rent an apartment out, or you might renovate a tired property to sell it on for a quick buck. But if you’re ready to give this type of investment a go, why not consider becoming a property developer?

Developers take the idea of renovation to the next level. For the most part, developing property is about starting again. You might take the shell of an existing building and develop it into beautiful new apartments. Or you might simply flatten the land, start again, and create something completely new.

There are several ways to get into this. You might already have some experience of self-building. Perhaps you built an annex or developed your loft space? Or maybe you took some land and built your dream home? Any experience like this is hugely beneficial to the budding developer.

Any project management, marketing, or design experience will also be helpful if you want to become a developer. After all, you’ll need to know that what you’re building will be exactly what your customers or buyers are looking for. And if you’re particularly savvy, you’ll be developing exactly what they need so you can take advance orders.

As you can imagine, the life of a developer is quite complex. Not only are you conducting detailed market research before you begin, but you need to be a master project manager and develop great working relationships with your site team. You need to be a creative salesperson, and you need to be creative enough to have a vision for your project long before it gets off the ground. You also need a lot of money management skills too.

Investing in property is never simple. You need to find the right plot or the right building. Then you need to negotiate the price that you can afford. The next step involves finding the right investors or development funding to suit you. Companies like Enness Development specialise in this area, matching the developer to the money. You have plenty of other things to be getting on with so it’s usually best to leave the legal and financial hassles to the professionals.

No project ever goes completely smoothly. This is why developers need a cool head and a toolkit of problem-solving ideas. Budgets can run out, contractors can walk out, and customers can change their minds. These are just some of the issues you might encounter. Sometimes you need a B-plan, and sometimes you’ll need a C and D-plan! Managing these types of situations is part of your job. Yes, it can be stressful, but tackling these challenges is what you are good at.

There is perhaps nothing more satisfying than handing over the keys to a completed home. You’ve taken an empty space and turned it into a place where the owner’s most treasured memories will be made. No wonder the life of a developer is so appealing!

Check out more property investing articles here

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