You may like to think of yourself as pretty astute with your money. You’re the kind of guy who can head to a supermarket and locate every single buy one get one free offer within a five aisle radius. You know when a car is a lemon. And you enjoy utilising those email vouchers you receive weekly allowing you to have a starter free with your main course at your favourite chain restaurant as long as you don’t go at the weekend. You enjoy making your money work for you and have the savings account to prove it. However, it’s not all about saving for your twilight years and having a nest egg for your retirement. Yes, you could have a sure fire long term investment in the form of a mundane bank account, but the minimal amount of interest you’ll accrue each year will hardly set the world on fire.
Making your money work for you in a more lucrative way will inevitably involve an element of risk. While you don’t want to put all of your hard earned savings at the mercy of the markets, you could choose to be a bit more aggressive with a third of your nest egg.
Bricks and mortar has long been considered a safe investment, if you do your research. The world of property has seen the emergence of daytime TV shows regaling viewers with stories of just how easy it is to buy at auction, renovate and sell on at a profit. Thousands of people have holiday homes that they use for themselves for a fortnight in the summer and lease to other people at other times of the year. And many people are now becoming amateur landlords, quickly developing a property portfolio that they can cash in come retirement day. If you’re keen to have a dabble in the property realm, take a look at this guide to ensure that you make money.
The thrill of an auction doesn’t just occur when you’re picking up an antique or a piece of art. Property auctions can be goldmines when seeking out houses or flats at ridiculously low prices. However, it’s vital that you do your homework first and don’t find yourself with an overpriced subsidence pit. Before you commit to a property purchase at auction, make sure that you head to a few first. They can be grand affairs and held at sports grounds, or they may be smaller village hall affairs. Pop down to one, get yourself registered with a couple of forms of ID and watch. Get a feel for the bidding, observe the increments used, and make a note of the prices reached for the sorts of property you might be interested in.
When you’re ready to buy, get hold of an auction catalogue and view the properties, you’re considering. Always view. Never buy blind. This is the quickest way to lose your investment. Make sure you scour the legal pack for any odd covenants and set yourself a price. If a pad is looking tired, needs redecorating, a bit of reconfiguration and maybe an extension, it might be worth a punt. Make sure it’s in a decent area, get yourself a survey done on the property and factor in your costs. If you can make the numbers add up, you could be onto a winner.
Flipping Or Renting
It doesn’t matter whether you purchase a property from auction or whether you buy from the traditional estate agent, you will still need to work out what you’re going to do with the dwelling. For the long term investor, renting out a pad might be the best option. If you buy a flat that needs a little bit of work like a lick of paint, some re-carpeting and a new kitchen, you can then list it for rental. Picking it up at the right price might mean that you can receive your rental payment each month, covering your mortgage repayment as well as giving you some readies to top up your nest egg or fund your next purchase.
Renting isn’t always the easiest option. Everyone likes to think that they can be a fair and professional landlord, but when a pipe bursts at three in the morning and your phone keeps ringing, it can be a nightmare to sort out. You will need to be on hand all hours, and be responsible for repairs to the dwelling. You may prefer to hand over the responsibility to an Airbnb management services company, who can ensure that your pad is kept in good order throughout a tenancy and make sure that you are receiving the optimum monthly price. They can even vet your tenants, provide you with relevant insurances and give you the peace of mind knowing that your property is being looked after.
If renting isn’t really your bag, and you’d prefer the thrill of making a quick buck, the world of flipping could be more your forte. You must try and buy a humble abode of the worst condition but on the best street. Sticking to this old adage and buying at the right price can mean that you have a sure fire investment return on your hands. Don’t scrimp on the finish and ensure that you put your interior design skills to good use. Whip out the white paint, keep the decor neutral and seduce your potential buyers with a lifestyle. Remember this is a business, so don’t get too personal with wallpaper, furnishings and avocado bathroom suites.
It’s imperative that you set yourself a budget and always aim for the ceiling price of the postcode. Buy well, renovate quickly and sell for a premium price to make a profit. You may have to pay capital gains tax, but your profits should be able to swallow this impact and leave you with a tidy sum to reinvest into property elsewhere, or you may simply deposit it back into your savings account.
You may be keen on branching out into property but you might not have the time to renovate a pad, or you don’t have the motivation to become a landlord. Instead, why not check out the touristy regions of the country. You could investigate penthouses in achingly hip Brighton, check out cosy cottages in the Lake District or look at beachside homes in Dorset. These properties, when presented well, will always have people wanting to rent them on a weekly or fortnightly basis. Holidaying at home has never been more popular and is seen as a more thrifty way of spending the annual summer vacation rather than flying overseas.
Consider the areas of the country you love, and purchase there. This way, you can use the dwelling a few times a year and let it out the rest of the season. Unlike a long term let where you receive a monthly income, you will receive a bumper weekly rental payment. In high season this can run into the thousands. However, at the same time, you need to be aware that you might not be able to rent out your Southend apartment in a wintry January no matter how lovely the seaside view is. Over the course of the year, you will need to budget for your mortgage repayments when you have no income for the low season months. Buy at the right price, and you could find yourself with a much more lucrative way of your money working for you. And as a bonus, you get some cheaper holidays.
If purchasing a pad seems too much of a risk, but you are highly creative and adore flexing your design muscles, why not branch out into interior design. While it won’t be your pad that you’re honing into the perfect dwelling, you can charge clients a fee for your design skills. Offer to design a few friends’ pads, showing off your creative eye and style. With the advent of Facebook et al. it won’t be long before you can build up a reputation for creating exciting, vibrant and dynamic spaces.
You don’t have to give up your full time job to do this. By day, you can be a graphic designer, an accountant or an IT contractor and by night (or at the weekend) you can be rescuing dire decor from poor taste and colour faux pas. If you love designing homes, room and decor combinations, why not give it a go as a side hustle. You will need a minimal financial outlay and could see yourself earning another wage alongside your full time job.
Property has always been seen as a strong investment. This is why more novice investors plump for bricks and mortar over stocks and shares, Forex trading and art curation. If you want to see your money working in a more aggressive way, you don’t mind taking a calculated risk, and you’re willing to work hard to see results, then a dabble in the property market could be for you.