property for profit

Author, Sam Shaw, considers some of the important factors when it comes to successful buying, renovating and selling property for profit such as:

1. Assess the position in the market cycle. Try to buy at or near the bottom and sell near or before the top. Rent during the fall. While this does sound patently obvious, quite a few renovators pay absolutely no heed to market cycles and timing. If you're planning to buy and never sell you can probably ignore market cycles without major damage to your bottom line and if you're planning to add value and sell, generally you can still make profits in any property market. However, if you time your property acquisitions and dispositions to take full advantage of market cycles, your profits will be magnified.

2. Look for opportunities in changing market requirements and cater to them; e.g. design to suit bigger or smaller families, style changes such as Mediterranean Tuscan etc.

3. Don't get caught catering for a market that won't exist when you come to sell. Be aware of demographic trends that affect housing demand.

4. If you're renovating the property you're living in with the primary objective of making a profit you need to plan your renovations so that the property will appeal to the needs of your target buyer group, rather than your own needs and requirements. For example, you may only need a three bedroom home but if the general market in the area is calling for four bedroom homes plus a study then you do that.

5. Always make sure that the end result is not going to be the most expensive property in the area. Even if it is the best property, the sale value will probably reflect the general value in the area.

6. Don't be a 'Pioneer' in setting trends or styles. It's usually the pioneers who lose their shirts.

7. Always completely finish the project and leave nothing remaining for the new buyer to do... even landscaping.

8. Use professional tradesmen and do not attempt to do work on a property yourself unless you're highly skilled in the particular field. The end result will always reflect an amateur finish if not done correctly, which will make the property unsaleable or less valuable.

9. Stay in an area you know and constantly monitor what buyers in the area want. It's easy to follow trends in your own area rather than have to learn about a foreign area.

10. Make sure that the renovation has street appeal, because if it does not it will not be saleable.

11. Look for easy projects that may only need cosmetic renovation unless you've graduated to heavier (and more expensive) renovation work. Landscaping and painting alone can add huge value to a Property. Many people spend all their money on getting a house just right, only to forget the landscaping which is the first thing a buyer will see when they get to the house.

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Originally submitted by: Sam Shaw