The quick fire way to value your property investments
A property investment needs to offer a great return for your money, or what’s the point in taking on such a project at all? However, it’s a daunting prospect when it comes to determining the value of a property, you need to be able to look past all the work that needs doing and be completely certain you’re making the right choice.
Which is why this quick fire guide, with questions to ask yourself, should help value those potential investments before you get started. We also recommend reading through this detailed article on how to value a house, as it contains all the information you will ever need.
Compare against other properties nearby
Is the local area profitable?
A popular area is going to prove lucrative for the property you are considering. You should look for a property development in an area where families or first time buyer couples are looking to purchase a home. The more likely this is, the higher the value of the property on completion.
Use this checklist
There are a few things you need to be sure are in order before you make any investment, when it comes to property certain jobs will eat up a budget. Use this checklist to determine which larger jobs may be required:
Is there mould or damp?
Is there any external damage i.e. roof tiles missing or brickwork requiring repair?
Is there a new boiler and gas central heating?
Are the windows double glazed?
Does it need a new kitchen/bathroom?
Those purchasing a newly developed property will expect all of these things to be fixed or in place, so check carefully and work out the cost to get things fixed before you make any investment decisions.
Can you get the right contractor?
Whatever upgrades need doing, Jason Harris, First Urban Group’s Director, suggests that those contractors you choose to work with should be of the highest calibre:
“Build relationships with professional partners you can trust,” he says. “The people you work with say a lot about you as a developer, so if you are looking to renovate a commercial property or develop on a large site it’s important you have dependent, hardworking partners that consistently complete projects to a high standard.”
Knowing you have contractors that will do a good job should boost your confidence in the value of your property investment, you know work will be completed to a high standard so no further budget is required later.
All of these factors can help you determine the value in your property investments. If the work required outweighs the budget you have or if the local area is not a popular one for homeowners, perhaps it’s best to reconsider and understand that the value of such an investment may not surface.
Consider the rising cost of buy to let
For many property investors, the costs associated with renting out property are too great to live comfortably with many now selling their properties to combat the heavy tax they now face for owning a rental property. Do the maths before making an investment if you are considering buy to let, and ensure that not only is your mortgage covered in the monthly rental price but you can also afford any further taxation.