If you’re looking for a cool business idea, perhaps you should consider real estate investments. Property consistently rates as one of the best assets to include in your investment portfolio. The UK property market in particular is incredibly appealing to property developers. As a first-time property investor, it’s easy to get lost in the weeds. What to buy? Where to buy? When to buy? How to buy?
None of these are easy questions because the property market is riddled with complexity. One of the foremost experts in the real estate market is renowned entrepreneur and investor, Ofir Eyal Bar. He has started sharing his extensive knowledge with fellow property developers with his YouTube channel on how to choose the right investments, what to look for when buying a house, and much more content in the works.
Where to Begin with Real Estate Investments?
Your first property purchase is a milestone. It’s arguably the most important purchase you’re going to make in your life. With some money in hand, you can confidently begin the process of applying for a mortgage for your desired property. What will you buy? A piece of land? A flat? A townhouse? Maybe even a store at a strip mall? Whatever your preference, it’s important to conduct all the necessary research well ahead of time.
Some people buy property for resale purposes. Others buy them for rental purposes. Are you looking to make a decent return on your property investment? Or are you simply looking to drop anchor and beautify your home to the best of your ability?
Real estate investments undertaken for the purposes of generating a profitable return are unique because emotion is no longer a factor in the decision-making process. When you’re buying property to live in, you will invariably become personally attached to the project.
As a real estate developer, you’ve got to maintain an objective focus. While you may love the property that you have purchased, you cannot get too attached to it because it is intended for other people. To this end, it’s important to establish a business plan early on. What is your budget?
Your budget allocation should include accommodation for all manner of externalities. This includes rehabilitation costs needed to get your property up to speed. Will you be gutting the entire house, installing brand-new floors, kitchen countertops, ceilings, bathrooms, and other furnishings and fixtures? Your budget determines which projects get prioritised.
What Should You Focus on When Rehabbing a Property?
It all depends on the property. If you have purchased the most affordable home in the most expensive neighbourhood, kudos to you. Your goal as an investor is simple: find value in your real estate purchase. Careful property selection begins in earnest.
Always work with a reputable realtor who has an ironclad reputation for service excellence, integrity, and flexibility. You certainly don’t want your realtor pushing you into purchases that you can’t afford, simply because they’re trying to maximise their commission. There are many unethical operators in the real estate market – it’s your job to avoid them at all costs.
Once you’ve found your dream property, compare it to others in the area. What features do properties in the same class have that yours doesn’t? How can you successfully upgrade your real estate cost effectively?
This complex issue is easily solved with a budget. Your limited budget will dictate which issues get prioritised and which issues get relegated. Any structural damage needs to be attended to as a matter of urgency. Broken ceilings, rising damp, leaky pipes, cracked foundations, and termite-damaged wood must be repaired or replaced stat.
Many property developers understand that the purchase price is the first of many expenses in a real estate transaction. The real work begins once the title deed has changed hands and you get to roll up your sleeves and get stuck into the rehabilitation work. It’s always a good idea to consult with experts when managing major rehabilitation projects.
There are all sorts of regulatory matters to comply with such as permits, ordinances, building codes, homeowners association rules, et cetera. Focus on the rehab elements that will generate the most return on investment. Upgraded kitchens and bathrooms are a great place to start. These are big-ticket items which may be off-limits for the first-time property developer.
Once you’re ready to begin the rehab work, you’ll invariably feel the rush associated with it. Every task you complete is like a pat on the back. Painting, repairing, replacing, remodelling, and reinvigorating your property is a surefire way to boost the value of your home and its appeal to renters and potential buyers.