Most of us have aspirations to be a homeowner from a young age.
Sadly, it’s not as easy to get on the property ladder as it used to be, but investing in bricks and mortar remains one of the best ways to make money in the modern world. If you can climb that ladder and choose your portfolio pieces carefully, you could benefit enormously. Here are some of the best ways you can generate an income and boost your balance by buying property.
Playing the long game
If you’re on the hunt for a new home, you may have a wish list that contains features like a big garden and a family kitchen, but it’s also wise to consider the potential to generate profits. When you buy a house, you’re investing in an asset, which will hopefully appreciate over the course of time.
You may not be looking to move for another five or 10 years, but it’s always worth looking into the future when you’re shopping around. Think about location carefully and don’t be put off automatically by something that isn’t quite the finished product you may have been hoping for.
If you can increase the value by doing a little bit of work, this will make a huge difference when you come to sell. If you know you’re going to be in the same property for a period of time, it’s worth looking at ways you can add value. Good examples include converting lofts and basements, extending to create a larger kitchen or an extra bedroom and adding a garden room or a conservatory. You don’t have to start work immediately or take on a number of projects at the same time, but making changes as you go will stand you in good stead to reap the financial rewards when you do move on.
Joining the crowdfunding revolution
If you don’t have enough money to make it onto the prized property ladder, consider the option of joining the crowdfunding revolution and take a look at a Fundrise review.
There are crowdfunding ventures out there that enable you to put a certain amount of money into an investment pot. Your money, along with funds pledged by others, will be used to invest in commercial ventures, which will hopefully bring you profits further down the line. It’s worth doing some background reading and looking at different options before you make a payment. You may want to start small and then increase your investment once you become more familiar with the system and you have a better insight into how likely it is that you’re going to get a return on the initial outlay.
Buying a fixer-upper
If you dream of becoming a property mogul, you may have come across TV programs or stories in the media, which chart the success of developers who have turned rundown houses into stunning new pads. Buying a fixer-upper can lead you to a goldmine, but there are risks involved.
Make sure you understand the level of work that is involved and steer clear of red flag signs, which are expensive to rectify. If the walls are sloping and there are damp patches everywhere, for example, you may end up spending a lot of money to make the property habitable.
Search for opportunities to turn a rough diamond into a polished gem without taking too much time or blowing the budget. Cosmetic changes are a good place to start if you’re new to the property game.
You can usually achieve incredible transformations on a budget in a matter of weeks or months, rather than years. If you’re on the lookout for a doer-upper, consider the location, think about your target market and always have a strict budget in mind. Your budget should cover the purchase price, fees and the cost of renovation and redecoration. You need to ensure that you can acquire the property and pay for restoration work and still generate a healthy profit.
Buying to let
If you’re looking to use a property to boost your income over a period of time, you may be thinking about buying a second home to rent out. If you have a rental property, this will provide you with a cash boost on a monthly basis. Your rent may cover the mortgage, meaning that you won’t be eating into the value of the property. You could also use the rent payments you receive to invest in other properties or to pay off a mortgage on your home.
If you do plan to buy to let, you’ll need to ensure that you have the required agreements and legalities in place before you find a tenant. If you’re not around much or you don’t have time to deal with tenants, it’s worth looking into managed services provided by letting agents. When you’re searching for a property to rent out, bear the target market in mind and try not to let your own taste dictate what you buy. Your priority should be to find a house or flat that will fly off the market when the ‘to let’ sign goes up. If you’re hoping to attract students, for example, proximity to transport links, local colleges and universities, shops, cafes and bars may be more important than stainless steel taps or a south-facing garden.
Are you looking for ways to make money from bricks and mortar? Whether you’re searching for a place to call home, you’re hoping to join other investors, or you’re buying to sell or let, there are opportunities to generate profits from property.
It’s not an easy way to boost your income, and you’ll need to make the right calls and research the market thoroughly, but the rewards can be substantial. Focus on finding properties in appealing locations, stick to a budget and try and add value whenever possible. If you can’t afford to buy at the moment, consider crowdfunding options or join forces with others. Negotiate on price, plan meticulously and always prioritise the target market. If you make the right decisions at the right time, a property can be incredibly lucrative.