Attention! There’s a new strategy that can help you profit from property renovation deals within minutes!
A few years ago, people were going bananas over renovations as a way to make money from property. Not everyone realised their dream of becoming a property millionaire, except for a few people who took reasonable risks like Michael Holmes, editor-in-chief of Homebuilding & Renovating magazine.
In an interview with the Telegraph, Holmes revealed that by putting to use these practical tips, he was able to sell renovated properties for up to £500,000.
1. Unlock a hidden gem
Most properties that need renovations are diamonds in the rough. You can’t really add value to it unless you pinpoint the problem and find the proper remedy for it. Some common problems include deciding whether it’s better to extend or refurbish; extending the lease; and how to remove restrictions on the land. It’s not easy to come up with a solution for every problem. In case you run out of ideas for a particular property, then it’s about time to walk away from it.
2. Seek expert help
Find an architect or a surveyor that can help you materialise the design in your head. Hire planners that the can advise you on what projects could be beneficial for the property. Most importantly, look for a financial adviser that can lead to affordable financing options.
3. Be cost-effective
It’s pretty easy to find a low-cost property ready for renovation. The real challenge comes with the task of keeping expenses at a minimum when the time to renovate actually comes. Remember that profiting from renovation doesn’t just come automatically with buying a below market value property. You’ll also have to control your building costs to achieve your goal.
An Alternative To The Tried And Tested Methods
Granted, not everyone has the resources to do a fixer-upper. If you have a property that you want to get rid of that needs renovating, but you just don’t have the budget to fix it up and make it saleable, there’s still something you can do to sell for profit.
Rick Otton, a certified expert in making profitable property deals, has a nice twist on selling houses that need renovation
“Many renovators are stuck with the old paradigm of doing property renovations. This old process (which usually takes 3 to 4 months) include buying cans of paint in the hardware, undergoing inspections and appraisals, and then applying for bank loans. What a lot of these old timers don’t know is that they can still get make profit from a renovation within minutes,” said Mr. Otton.
According to Mr. Otton, the faster way of making a profit from renovations is through changing the paperwork financing structure.
“When you change the paperwork, you are simply making the house easier for the next person to buy it. This simple change in the paperwork will now be that added value that people are going to pay you for and increase the value of the house,” he said.
One of the ways to do this is by giving your buyers flexibility on the buying process. Instead of asking for all the cash now, perhaps you can give the buyer some breathing room when it comes to the deposit.
For instance, most buyers have a hard time coming up with the 10%-20% deposit they need for a bank loan right now. But suppose you allowed them to pay the deposit in increments – say in 24 months – then it becomes easier for them to get their bank loan because in the perspective of the bank, they’ve taken care of the deposit. That flexibility in the paperwork alone can compensate for the less-than-stellar condition of your property and allow you to sell at a reasonable price.
Whether you like to keep it old school or jump into the new wave don’t forget that there’s a strategy out there which can help you earn money from renovations, so try them out now!