“So many people are scared off property investment because they don’t have the staying power” says Vicky Keyworth in her latest blog post.
“Ten years is regularly the investment period you’ll hear quoted – a decade is normally the average time it takes for a property to double in value.
To some people ten years is an awfully long time. To others, the likely profits are worth the wait and – done right – you should have tenants queuing up to cover the mortgage for that period.
But there is actually a shortcut to sizeable gains.
I’m talking about a strategy called ‘flipping’.
Put simply it’s buying a property, doing it up and selling it for a profit. The process can, and should, be done as fast as possible – a year or under is normally the golden rule.
But it takes skill and experience – and the pitfalls are plentiful!
I tend to recommend looking at terrace houses – something there’s plenty of in this area – if you’re just starting out. They’re more affordable and you’ll normally be selling to a first time buyer which means there’s less chance of the sale falling through.
There are still a myriad of potential downsides though. Costs of a refurb can be extortionate unless you know what you’re doing.
You need to know the property’s in good shape before you buy.
You may have already had a mortgage survey carried out for lending purposes but remember the surveyor will have been working on behalf of the lender not you. If they thought the property needed further investigations they would normally suggest you arrange a structural survey. If you’re in any doubt it’s worth investing rather than inheriting a problem could run into thousands further down the line.
There may be hidden issues like damp; dry rot; Japanese knot weed; asbestos or a new roof might be needed.
Many developers will recommend you only buy at 25% below market value. However, you can’t always get houses at that price so sometimes you can save money on the refurb or maximise the sale price by investing in improvement works.
I regularly help people with the process through the sourcing of investment properties, help with refurbs and help with the re-sale.”
- Vicky Keyworth runs www.letzmove.com She is currently working on her first book. You can contact her via: info@letzmove.com
