Top 3 Property Tips

At rovster we want to help you, so every week watch out for our top property tips!

1. Location, location, location… the myth
   Although everyone thinks they know what this means they don’t! A good location doesn’t mean the best area in town when you are a property developer. If you buy in the centre of the best area then you are going to pay the highest price and that doesn’t leave you any room to make a profit. A good location for me means somewhere that provides the best return on my investment.  This is often on the fringes of a good area that in time can become part of that good area. Being near schools, public transport and green areas are essential when it comes to selling a property but being in the nicest street with the smartest post code isn’t. Some of the richest property developers in the world specialise buying in what most people would consider the worst possible locations, when in fact they are great locations for developing property making tons of profit, the trick is learning to spot these areas because often the only way is up!
2. You make your money when you buy, not when you sell
   You make money when you buy a property rather than when you sell it. Thus it is essential to buy the property at the right price, and every pound you can knock off the asking price is money straight in your pocket. If you pay top dollar for something, however good it may seem, you are not going to be able to make a decent profit because the margins are so slim. Look out for properties that have planning applications in with the local authority. They might accept a good offer subject to planning permission and if it eventually gets planning you get the upside!
3. Do your homework
   Property development is a risky business. You could make a fortune or you could lose everything and end up in debt for the rest your life. You have to do your research thoroughly before you buy. Find out how much other properties go for in that area, how much stamp duty, searches and fees will be, are there any restrictive covenants, and the cost of any refurbishment. When you have done your sums work out exactly who you will be trying to sell to, how much you will realistically get and whether the profit margin is worthwhile. Property development is very capital intensive and you have to get your sums right.

And remember, if it was easy we would all be millionaires!

Regards

Gary McCausland.