Buying an old property that needs a lot of work and fixing it up can be lucrative - if you get it right. In this guide, we’re going to show you the best ways of making property renovation work for you. And, hopefully, give you a great return that you can use for your retirement, or more investment.
Choosing the right location
First of all, think about the location you want to buy into. It’s an important choice, and there are a few reasons why. First of all, you need to be near enough so you can get to and from the house without spending too much on travel. Also, you should think about other house prices in the area. It should give you a good idea of whether you will be able to turn over a good profit or not. However, just because an area is cheap, doesn’t mean you can’t make any money. If there are plans for regeneration on the cards, then you might even make even more within a couple of years. So, keep your ears to the ground and keep up to date with your state’s housing ideas.
Finding the right home
Now you know the area you want, it’s time to choose a house. You’ll need to think carefully about the state of the property. If there’s a lot of work to do, you may not have the budget, which could cause you problems. It’s a good idea to hire a home inspector to give it a thorough look over. If there are structural problems, for example, then the costs could be astronomical. If you aren’t going to make that money back - and more - on the sale, then there is little point in investing.
Many mortgage lenders won’t give you a home loan if you are planning on fixing up a ramshackle old property. There’s just too much risk involved - especially if you haven’t done a renovation before. There are alternatives, though. The government may well back your project under their FHA loan system. This will help you get a home loan - but you will need to check that you fit the FHA eligibility requirement first. It’s also worth raising as much of a deposit as you possibly can. Not only will this make the home loan cheaper, but it will also give your lender more confidence that you are serious.
It is essential to choose the right building team to help you with your project. Ask around your hometown for personal recommendations from family and friends, and do some online checks. The Better Business Bureau will have plenty of information about reputable businesses in your area, so check there, too. Ideally, you will want to find someone that gives you a great quote, but also ask about timing. The longer you are renovating your home, the more it will cost you - so speed is a vital thing to think about.
And there you have it - the four major things you should think about if you are considering making some money from renovating a property. It’s a lot of hard work, and it might be very stressful - but follow these tips and you should get through it. Happy building!