Can you still make money in property?
With house prices in some areas now rising at a rate that makes it more profitable for some home owners to stay put than to go out to work this may seem a daft question, but if you want to really make money in property is it still possible?
The answer is “yes” but it’s not as easy as it once was.
The key for those looking to make serious money is to follow the example of other businesses and to look at what the market wants. Find an ‘ugly duckling’ and turn it into a swan. Web sites like Rightmove can be hugely helpful with looking for demand – with around 90% of all homes for sale via estate agents on the site, and monthly information on average asking prices across England and Wales, it’s easier than ever to be able to get a good feeling for what the market is looking for.
Back in the 1990’s the trend was to find houses that could be converted into flats. Today, those with the ability to buy often are older, those trading up who already have both a deposit and an income to fund a mortgage. Ironically I am seeing people buying flats and converting them back into houses for families who’ve outgrown the huge numbers of two bedroom flats that were built during the boom times leading up to the Credit Crunch. Flats are priced on what buyers can afford to borrow but those buying a house often have equity from their previous property of a legacy from their parents. They may not be reckless but they have the ability to pay more for the right thing.
The demise of the local boozer is well documented and whilst getting planning consent to change them into homes isn’t straightforward it is possible and often rewards the developer with a handsome profit. Likewise, the Government’s policy of encouraging the conversion of commercial properties into residential has helped to expand the demand for pretty period buildings in towns up and down the land.
Look for new infrastructure that will improve an area – a by-pass, a new station or even a new school. All can change an area and with it raise demand and then prices.
Making one plus one equal three isn’t easy but it can be done and can be profitable. As always, keeping a close eye on costs, getting professional advice and having time to do a project can be rewarded in both cash and satisfaction. Sure, some people will continue to make money just by owning a property but more and more are discovering that adding imagination can also add value.
Henry Pryor is a buying agent. He is a regular commentator on the BBC and in a number of national newspapers.
http://www.henrypryor.com/
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