Understand What and How Much To Spend
You need to be in tune with what buyers in a certain area want, otherwise you might end up over-capitalising or creating something that’s out of sync with the rest of the suburb.
For example, you could make a profit from flipping a Golden Oldie in Parkhurst – but the market in this area demands a Chelsea-fied, sophisticated look, so a thatch would never sell.
On the other hand, you’d take a different approach in Brixton. Here, there is a lower price ceiling – you wouldn’t want to spend a lot on the property because you wouldn’t receive a high sales price. It’s best to buy in an area that reflects your culture. Spend time at showhouses to see what styles are popular in an area, and what sells.
Make the Right Choice
When buying a house, it all comes down to location, location, location. You need to purchase the worst home in the best area, because this gives you the room to do your renovations – whatever changes you make will raise the value of the house.
You need to examine the structure of the house to make sure it’s sound. Unless you have experience in making renovations, it’s essential to bring in a professional who will know what flaws to look out for.
You’ll need to do a lot of homework; for example, you have to look up the future plans for the area, because the property may be affected by major arterial roads that are being planned. You also have to submit notice of your own plans for comment.
Reward versus Risk
Remember that the bigger the bait, the bigger the fish you’ll catch. Higher-priced properties will bring the best rewards, but also carry the most risk.
When you’re ready to sell, remember that the first offer you receive is generally the best offer and delay means extra holding costs. Waiting for the market to provide your profit is a costly exercise because even if you get your price you will be re-buying into a higher market.