Tuesday, 9 March 2010

Adding Value improves your chances of success

So often I hear people say “I’d like to invest in a property but what happens if interest rates rocket, prices fall, tenants trash the property, rents are unpaid, voids etc etc “

Telling it straight, no one knows if these things will happen or not. I can only speak from experience and share with you some of the steps we’ve taken to protect ourselves from the worst that can happen.

Amateur Property Investors tend to forget that it’s a business which you need to manage efficiently and add as much value as possible. Over the next few weeks I will share with you some of the steps we take to ensure our business flourishes and we are protected from the unexpected.

Adding value will give you the edge, improve your success and help to protect you in tougher times.

There was an excellent discussion on the subject on the Property Tribes forum recently which is worth checking out click here

My tip is to always consider difficult properties, they can offer the greatest potential and give you more negotiating power. Many of the properties we have purchased have been the ones that others shy away from and have dust on the details at the estate agent's office. However, one criteria we never compromise on is location. Most other things can be resolved and often cheaper and easier than you might think.

Always do thorough research and be fully aware of the difficulties of a property then tackle it head on. We find neighbours, planners and tradesmen are only too happy to tell you the negative points about a property you might be interested in purchasing. Use these valuable and free tools to your advantage.

When adding value you need to be very disciplined with your budget, shop like it’s your last pennies and always ask yourself twice if you really will get the money back (+ profit!).

Don’t treat your investments like a hobby or an excuse to practice your interior design skills – unless you plan to make a living exclusively from interior design. Your customer really won’t appreciate it. Buyer or tenant, they all like to put their own stamp on a place so keep it simple, clean & fresh. We've sold some high value exclusive property with very simple finishes.

And for the gadget gurus I have to add, please don’t think that adding all the latest sound systems and wireless/remote control gadgets is going to add value to your property. At best it is going to impress and maybe help sell it. It is not going to make you a profit.


Jayne said...

Very well said, Jo. At the end of the day, as you say, it's a business and we have to treat it as such. Fear can hold people back indefinitely, so sometimes we need to take courage in hand and make that step forward, whether it's for the first property, or to do something new with the umpteenth property, as you mentioned in your previous post.

Jo King said...

Thanks for your comments Jayne and I'm so glad to see you on here as you have a great deal to contribute - I'm looking forward to your blog too!