The 11 Key Steps as a guide for a Risk Conscious Real Estate Investment Strategy
- Find properties that are suitable for both resell and rental. The market for renting and the market for properties for sale move in opposite directions. An agent will normally tell you what direction the properties for sale market is going through.
If you invest in properties that can be **easily resold or rented out** – then your investment is secure regardless of how the market turns.
- Buy a property for location. Your Estate Agent should be able to guide on this issue.
- Purchase properties at prices that assures you a 20% return on your investment after costs. This is crucial. This not only gives you a decent return, but also protects you against a fall in the market. Agents should be able to give you a rough estimate as a guide on what to expect.
- Build flexibility in your finance package – things go wrong, builders don’t turn up, people lose their jobs. Agents normally assist in speeding up this process in order for them to get their commission sooner.
- Don’t purchase the first property you see – take your time and find the right property.
Try to look at properties for sale from as many agents as possible.
- When you’ve found the property you want – move very quickly. Use a conveyancer or agents who can move at speed.
- Renovate for maximum profit on properties for sale – not for personal taste. Neutral is best – white bathrooms and plain kitchens.
- Control your builders/agents costs – set out an agreement, don’t change your mind, and hold back the money in stage payments.
- Stay on in control of your builders/agents and the quality of their work.
- Quickly sell or rent out your property – select your agent before the work is completed. Call your agent every other day to find out what is the progress.
- Don’t be greedy on the sale for your properties or rental price – accept mid prices.
“Returns from UK residential property were 20.4% in 1999 and have averaged 16.4% over the last 5 years”
There probably hasn’t ever been a better time for property investment – but do your homework well, read all the advice you can lay your hands on and follow a risk conscious strategy that delivers a 20% return.
If you can do all this then you’ve got the makings of a successful real estate investment.