Long-term investment strategies are a much better option in a fluctuating property market
If you are an astute investor, then you would know that the best way to maximise your profits is to look for long-term investments. It is harder to make money from the “buy, renovate, sell” short-term strategy than it is from the “buy, renovate, sell” long-term strategy.
So what do you do if you have the perfect property that fits the bill for a “renovation
investment”?
Obviously, first things first – make sure you buy it for the right price and do not overspend.
Remember, the reason you are buying is to renovate the property and sell it for a profit. If
you overspend to begin with it will be very hard to turn the renovation into a profitable
exercise. The easiest way to work out whether you will make a profit is to do all of your
research first.
Have a look around to see what houses/units are selling for with the renovations intact. Then decide exactly what it is you want to do and get some quotes and draw up a budget; it is also worth getting building and pest inspections at this stage (as the budget will blow out if there are any hidden problems that you have to deal with). Then deduct your total costs from the predicted future sale price and see what profit you come up with – in turn determining whether it is a sound investment or not!
There are a few handy tips to remember when buying and selling an investment property:
• Remember most renovations cost more than you budget for and take longer than you expected, (even getting a quote these days can take forever).
• Before you go ahead with any renovation think about what type of tenant you wish to attract, and plan your renovations with this in mind.
• Look at the property as an investment – it is unlikely that you will want to live there at any stage so be more practical in your approach to décor. It is not about putting your stamp on it – and it is far easier to get a tenant for a property that has been decorated in neutral tones thus allowing them to put their own personal stamp on it.
It is a tough job renovating and investing but if you get it right in the beginning it can be a
good money-spinner.
