Answer These Essential Questions Before You Invest In PropertyWednesday, June 22, 2016
Do You Know What You're Doing?
You might think that fixing a leaking tap or re-plastering a wall means you're a DIY maven but are you really? You have to be ruthless and assess your knowledge, if you come up short you don't have to call an end to the plans there but work on getting your skills up to scratch. Taking a course or class will be money up front, but you will save in the long run by being able to do jobs yourself. If you plan on leaving it to the professionals, be sure to include all fees for the material and work into your budget. Consult expert property advice & guides to plan and research everything thoroughly.
Do You Have The Time?
Project managing a renovation project is an actual job that people do full-time, so can you fit it around your schedule? However much time that you think you need, treble it. Quadruple it, even. You're going to run into problems- be ready for them, and the inevitable delays they will cause. Do not assume that a couple of hours here and there will have the job done in six months. If that's all you've got, you need to aim for a much longer completion date. It's important to keep that in mind when looking for your financing.
Is There A Market?
There's no point buying in an area where property prices are stagnating. In a perfect world, you'll tap into a brand new hotspot and be one of the first to take advantage of it- no one is ruling it out. But don't gamble. Don't assume an area is inevitably going to become popular because it seems like it should. If it's your first time, look for more of a sure thing. Stick to small family homes that are always in demand, in areas with a good reputation of selling well. It might not bring you a huge return, but baby steps- you'll get to more risky investments in the future if you do this one right.
Can You Afford It?
The most important question is saved for last. Just like you did with the time management, you have to double your budget as soon as it's set. At the very least, a big contingency fund is an essential. If it's not possible for you to do that, it's a red flag. Property flipping might not be right for you right now.