Real estate is one of the oldest kinds of investments a person can make. Humans have been living in built houses for thousands of years, and in that time it has become popular for humans to acquire extra property for financial gain. Today it is one of the more potent investments a person can make, especially when compared to stocks or hedge funds because you actually have something physical to show for you purchase. There are many ways in which you can turn around a profit in real estate, but as a startup there will be much trial and error, perseverance is the key.
Use Your Own Skill To Lower Costs
Usually as a property developer you’ll be purchasing houses, making improvements and then selling it on for a profit. The issue is that if you’re having to undertake major structural work you’ll need to pay a qualified professional to do it for you and it reduces whatever projected profit you have. If you have a skill, be in decorating, building or plumbing you can help work on your property and negate the costs of a hiring. If you’re in a partnership then it is easier with two people. It all depends on the turn around time, do you want to make a quick profit or are you happy to hang onto it a bit longer and do some work yourself for more money? If you have the skills, you’re generally better off doing it yourself.
Commercial real estate is essentially properties and buildings that are rented out or sold to business uses for offices or work based premises. You can make money repurposing homes or buildings and then selling or renting them to business owners who need space. Again, it is highly lucrative but remember sometimes repurposing places into an office environment can be a lot of work. Perhaps you yourself need an office for your new development company? You can find some great mobile office space to suit your needs, it is especially useful if you’re developing property in a far flung place or city.
You can also make a profit by purchasing a property, acquiring planning permission on the property grounds and then selling it on at a profit. Homes with planning permission go for more than homes without. This also doubles with leasehold and freehold. If you manage to change the property from leasehold to freehold you can sell the property on again. These methods garner less return but if you manage to buy a few houses at onces, acquire the relevant orders then sell them on you can still make a tidy profit.
Repurposing is a long winded project but gives you the best return possible. You purchase a home, usually a larger home and turn it into an apartment for higher rental return. You can then sell it on to someone who wants to rent it or indeed rent it out yourself. It can be tough because it means installing another kitchen and bathroom, so it means a heavy amount of cash needs to be invested and depending on your skill set could take quite some time to do. But, when you’re ready to sell the profit margins can be huge because you’re selling more than one property whereas you only bought the one.