It is not a secret that after the recent financial crisis many people lost their jobs and homes; many of those houses ended up in auction houses and those lucky enough with a job, enough money and a good credit record were able to grab themselves a bargain; but have you ever considered buying a house in ruins and transform it into a palace, your new home or a great investment opportunity? Although the numbers of houses are considerable less than a few years ago; many lender providers have tightened their lending criteria and mortgage collection; therefore, it is expected than once interest rates go up again many people will be unable to fulfil their mortgage repayments.
Credit: Daniel M RamirezWhile it is tempting to buy a house without having to refurbish it; it is true that you will have more opportunities to increase the profit you might be able to get if you buy a house in ruins and transform it according to the latest trends in what people want; this will improve the value of the property once you put it on the market. Buying a house in need of renovation is easier to get and not as likely to get snatched by one of the thousands of property developers waiting for an investment opportunity.
House Action Tips
Do your own research: although it is very tempting to bid for a house when the price is not too high, you should consider the condition of the property; try to arrange a visit and do your own survey; you must know what to check when buying a property if you don’t want to lose money; if one of your friends is in the construction sector why don’t you invite him or her on your first or second viewing? A good analysis of all costs involved in the renovation project is fundamental and it is something you need to do before buying.
Study the area and potential of the house: there is not point in buying a house in a poor area and having to spend vast sums of money to refurbish it when you will not able to recover the investment and make a tidy profit or at least break even. Location, location, location is the key to increase the profit margin; if you are not familiar with the area, there are hundred of websites that you will be able to check in order to find out the price of similar houses around the area; this will give you an idea of the amount of money you should invest.
Compare estimations against future profits: once you know the price you are likely to sell it for when refurbished then look for a builder who will be able to provide you with a budget of the costs involved in the renovation project; however, try to add at least 10% to the total to avoid any surprise. A valuation provided by a certified Surveyor is highly recommended when the amount of money involved is high; he or she will provide you with detailed information about the possible structural issues with the properties; this must be provided to the builder for a more accurate estimation.
Any restoration project has its own risks but the possibility of increase the possible profit margin is in your hands; take all the measures needed and you will be one of many property investors making money in these turbulent times once you decide to put your house in the market.