We delve into four key strategies – flipping, off-plan investment, auctions, and motivated sellers – each with its unique set of challenges and rewards.
Flip
Finding a property that is below market value due to condition, can be a good opportunity and relatively short-term method of making profit from property.
But diligence in the financial analysis is crucial as without diligence, the purchase price can wrong, the cost of refurbishment can be wrong and the potential market value for sale can be wrong.
All three factors play a significant role in the resulting profit. Contact with local agents and regularly reviewing what is for sale and viewing properties of this type takes time. so put the effort in to see the results.
Off Plan
Market conditions must be favourable, and the location of the property must be in demand, for off plan investment to be profitable.
Buying a property before its built can lead to a profitable sale on completion of the Build if there is a high demand for the Development or if they market conditions and pricing has improved.
A combination of the two can be very profitable indeed. However, the reverse is also true… if you exchange contracts too far in advance and the markets have reduced or corrected, you could find the property value of the final build has in fact reduced, very challenging if you purchased with the intention of financing!
Auctions
This method of purchase has become more mainstream in the last 10-15 years and is no longer the domain of repossessed or distressed property sales.
With the introduction of on-line bidding, it can take no effort to bid from home, after you have registered for the Auction. This does take the edge off the competitiveness in an Auction Room, but also means there are many more bidders involved due to the ease of access.
To succeed, viewing is very important, and full consideration of the Legal pack is a must.
Most auctions lead to exchange of contracts and paying a deposit on the fall of the hammer, and most auction houses, now charge fees to the Buyers and not the sellers (read the Terms and Conditions before you get carried away)..
You must be able to financially complete the purchase in 28 days and then you are free to sell on or hold the asset – Diligence and Analysis is again the key, pre-bidding!
Motivated Sellers
There are sellers who through circumstances are forced to sell, indeed a whole industry of BMV (below market value) Companies have been established to deal with demand…
We come across these properties and discounts are available. but there are moral judgements to be made on whether you are seeking out opportunities or taking advantage of someone’s situations – not for the faint hearted but the market exists, and someone is making a profit.
In the dynamic world of property investment, opportunities for profit abound, but so do the risks. While flipping properties can offer quick returns, it demands precise financial analysis and thorough market understanding to avoid costly mistakes. Off-plan investments, buying properties before construction, can yield high profits in a thriving market, but they’re also vulnerable to market fluctuations. Auctions, increasingly popular thanks to online bidding, require keen insight and prompt financial action, with legal considerations playing a crucial role. Finally, engaging with motivated sellers opens a door to below-market-value deals, but it also raises ethical considerations.
Understanding these strategies is crucial for anyone looking to navigate the property investment landscape successfully, balancing potential gains with the inherent risks. Speak to an expert and see how we can help you with your investment.
