Not all homes are worth investing in – a property expert reveals what to look for and what to avoid
If you were to believe every real estate show you’ve watched, you’d think investing in bricks and mortar is a surefire way to boost your bank balance. And while it can certainly leave you with a healthy profit, you should rush the buying process at your own risk.
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Whether you intend to renovate, sell and reinvest in another project property, or embark on a buy-to-let business, it is important to do your research before signing on the dotted line.
Estate expert Thomas Goodman of MyJobQuote shared his advice on five signs to look out for when considering investment potential to ensure you don’t waste your time and money on a property that’s unlikely to rise in value.
1. Location, location, location
It’s been said countless times before, but that’s because where you buy really matters. You might be tempted by a cheap property in what you might consider a booming area, but buying a more expensive property in a place where the housing market is already strong may be less risky.
Goodman says, “Do thorough research on the area, demographic trends and properties that have recently sold, in addition to any planned development. All of this can affect real estate prices and decide whether your home will appreciate in value over the next few years.
2. Look for problems that can be solved
Goodman strongly believes that there is a solution to every problem, it just depends on how much you are willing to spend.
“Poorly landscaped properties can be reconfigured,” he says. “Unappealing properties can be brightened up with a fresh coat of paint, and you can recycle or replace old furniture for a whole new interior.”
If you’re working on a small budget and want to maximize your return with minimal stress, look for properties that only require cosmetic alterations – and be sure to get a professional survey before bidding to check for bad ones. surprises.
Replacing kitchen cabinet doors can make all the difference in a tired space. Image: HUSK
Consider minor changes that will make the space more appealing. Sometimes it can be as simple as updating tired kitchen cabinets.
3. Look for eco-potential
Some investors mistakenly reject a home if it has poor energy performance, but adding insulation and ventilation can quickly turn the tide – although current efficiency should be considered when bidding on the House.
Goodman says, “If you have the budget to renovate your property, you can hire an engineer to add green features, like an energy-efficient heating system or solar panels on the roof. This will instantly modernize any property and bring it into the 21st century, which is sure to increase its long-term value.
4. Look to the future
If you’re willing to play the long game, it’s a good idea to check if the area where you’re looking for a home has any major development projects going on. If so, holding onto an investment property until the market catches up might be a smart move.
Additions such as new schools, new businesses and regeneration projects will make the area more attractive and help your investment grow.
Converting an unused attic is a great way to add value to a property. Image: Oak Furniture Land
But Goodman says it’s also important to look to the future when it comes to how you develop your property.
He explains, “The down payment on a mortgage may mean that you are currently unable to afford a major renovation. However, perhaps there is potential for a loft conversion or driveway redesign in the future? Planning ahead and saving to reach your goals will help you reap the rewards of your investment later.
5. Research local demand
Although you may know that an area is in demand, have you thought about what type of property is most in demand? There is no point in buying a one-bedroom apartment if the area is popular with families, for example, while on the other hand, one-bedroom apartments can turn a quick profit in areas popular with young people.
Goodman says, “Watch housing prices in the area for a while before buying, so you can see if they fluctuate and cause your investment to grow.”
READ MORE: 24 smart ways to flip a house for profit
Image: Ewelina W/Shutterstock