In recent years there has been significant media attention on property renovation and the way in which it can transform investors into property millionaires. However, property is a huge investment, and failure to plan the project carefully could result in bankruptcy.
When investing in property, it is important to select the property and the area in which the property is located, carefully. This will require thorough research. If you buy the property through an estate agent, they will be able to tell you about the area, for example what the local schools, hospitals and GPs, roads and public transport are like, however, if you choose to buy property at auction, you may need to conduct more independent research. Mouseprice.com provide area guides (by postcode district) with information about the housing stock of the area as well as demographic information. These guides provide useful reference information, and indicate who your market might be if you later choose to sell or rent out the property.
Before embarking on a project you must be aware of the work involved. Will it essentially be a refurbishment project or will it require full structural renovation?
Prior to making an offer, most property investors or property developers would get a survey done by a reputable chartered surveyor. The result of this survey would then allow the property developer to make an informed offer. It may also be sensible, at this stage, to invite relevant tradesmen, such as builders, plumbers and electricians to provide quotes for the work they would provide. Also make sure you are aware of potential structural limitations of the building – has the property been refused planning permission in the past? Which are the supporting walls? etc.
The growth of the property market and property renovation as a means to financial stability is featured on so many television programmes that it could be seen as a flawless way for up and coming entrepreneurs to increase their pension in the form of property. However, it is essential to conduct the proper research before embarking on any project and manage the project in a professional manner. It may be tempting to snap up a bargain property, only to realise later that the price reflected the amount of work that needed doing. Research and planning will not eliminate, but it will reduce the possibility of ending up with a half finished empty property, and a hefty credit card bill! Remember, an investment can return less than the initial payout just as easily as itcan turn a profit.