If you’d invested in property ten years ago when the recession started, you may have invested at a time when everyone else was trying to get out. During this period, house prices fell by 33%; however, they have regained more than 50% since. For the patient investor who had the capital to wait it out, the increase in their asset value will reflect handsomely in their accounting statements. But property is not just a great asset for those looking to live in a house that is building up equity as markets shift and mortgages are paid. It also happens to be a good foundation for a side hustle or home-based business.
Property Investment As A Buy And Sell Business
There is a very lucrative way to make fast money off a property, and that is as a house flip. The most important part to remember about a house flip, however, is that a fast turnaround on improvements will lower the costs of the improvements. It’s also important to pick a price point that is relevant in that particular market. The average ROI (return on investment) for a fixer-upper, is between 10% and 20%. The more properties you can do, the higher the ROI. When there are delays, this pushes up the labor costs. The faster the flip, the better the potential ROI.
The Property Tycoon
While this is along the lines of the house flip, there are investors who buy up properties and land when the markets are low in order to benefit from a market shift. This means that when the prices rise, the equity in their properties rises along with it. The change in equity can take many years to be sizeable enough to beat costs, inflation, and taxes. For investors, patience is an important factor especially if the property has any kind of finance on it. While they wait for this turn in equity, they can either use it as travel destinations for their family, rent them out as short term stays such as Airbnb, or consider putting in permanent or long-term renters. During this period, investors can also use the home equity in the property to either purchase additional properties or fund other projects.
Become Lord Of The Manor
There are many different ways to become a landlord and it doesn’t always require a second property. Homeowners can rent out a portion of their existing property, or they can build a flatlet on a portion of their land too. This way, although slightly more intrusive than being on a different lot altogether, does have the benefit of keeping an eye on your asset. While there could be some financial gain, it’s important to work out a budget and consider the cost factors closely to ensure that the profit is worth the sacrifice.
There are different levels of property investment, and it can start with something as simple as a room in your house, or perhaps even a storage facility on your smallholding. Keep an eye on the home equity and the markets to ensure you get the most out of your property investment.