A Guide To Making Money From Property
By Business Desk
Saturday, December 17, 2016.
For those looking to make an investment, the property market is still a lucrative one. Of course, it requires a bit of money to lay down the initial deposit. But those who are able to save up will eventually make a satisfying return. Here are a few of the ways that you can make money in the property market.
Buy to let
The most common way of making money from property is buying a house and renting out to tenants. You’ll have to take out a buy-to-let mortgage and may be required to do the house up a bit so that it meets legal living standards. From here you can enlist your property online and start finding tenants.
You can rent the entire property or rent individual rooms. You may be required to do a few repairs, but otherwise you don’t have to make any more payments (and the rent the tenants pay you should pay off the mortgage). Many have made an empire out of buying up properties and renting them out.
Flipping and 1031 exchanges
If you don’t fancy the hassle of tenants, there are other methods such as flipping and 1031 exchanges.
Flipping is when you buy a property for a low price and then sell it for a high price. This could involve hanging onto it for a while until it gains more value, or simply finding a bargain and then taking advantage by selling it at the appropriate high price. This kind of money making scheme takes a bit of know-how and you may need to already be making a fair income if you’re going to be paying off the mortgage without rent to cover it.
A 1031 exchange property meanwhile is when you trade one property for another. Both partners must see the other property as having more worth, making this a risky strategy. This technique however is often tax free and can be used to attain a property that you think you can then sell for a higher price, rent or refurbish.
Renovating to sell
Another way of making money out of property is to buy some real estate, do it up so that it is worth more, and then sell it. This strategy may involve hiring handymen to renovate it, which could be an extra cost. Those who are a dab hand at DIY may be able to renovate the property themselves, which can save money. There are many different types of renovation. You may simply want to repaint the walls, or you may want to restore a completely derelict building. Certain renovations such as extensions, new driveways and patios may require planning permission, but this should be relatively easy to obtain so long as it doesn’t bother neighbours. Whatever you do, don’t grow too attached to this property! The danger of transforming a property to your own design through your own graft is not wanting to sell it afterwards, when this is the reason you bought the property in the first place.