Property Investing Strategies
Buy-to-sell property strategy
When it comes to property strategies, it seems that a large amount of focus is placed on properties that are bought to be let out. However, that is not the only property strategy out there that you can invest in.
Another option that those looking to invest in property can consider is buying to sell. But what is it, how does it work and why is it a good idea for some property investors?
What is buy to sell?
Also known as house-flipping. The idea of buy to sell is that you buy a property that is available at a lower price (for a variety of reasons) and then you sell it at a higher price. This releases a profit, which can be quite substantial, and it is usually turned around in a relatively quick period.
The property
For the majority of these properties, the lower price comes with a need for the house to be refurbished or developed. This means that you need to consider your options on how you are going to do this.
Some property investors are lucky in the sense that they can carry out this work themselves, however, some are not DIY minded and will need to factor in the costs of having a professional do this for them.
Of course, both approaches are going to come with a cost, but one is going to be far less than the other.
What are the positives?
One of the best things about choosing house flipping as an investment is that it can when done right, produce a high amount of return on your investment. This can be great if you are looking to make more money in a shorter period than other investments.
Also, it is a good idea if you are looking to earn a lump sum that can be received at once, rather than having a longer drawn-out investment that takes its time to work its way back to you.
It is also worth noting that if you can arrange funding for the property (such as a mortgage) then you won’t need too much money behind you in the first instance. You may need a deposit, costs for the purchase of the property and also the costs to do up and renovate the property. However, the rest of the investment will be funded by the mortgage application.
What are the drawbacks of this approach?
Whilst there are plenty of positives to choosing to “house flip” it is important that you also weigh up the possible negatives that can come with this approach. The first thing is that you are not going to be bringing in any money on the property whilst you are in the process of preparing it to sell, but, depending on the financing approach that you take, you are going to be making payments on the property.
It is also important to know that this type of property investment is going to be hard work at times. Not only do you need to pay attention to the type of property that you buy, this can make the process seem like it is dragging on, but it is something that you do need to get right.
If you do want to try out property investing for yourself, then it is important to understand that it will take time and work to make it right for you. However, when you do get this investment type right, we can assure you that you will feel the reward and before long you will be preparing yourself to make another purchase and add to your portfolio.
