There are a growing number of property TV programmes which attract significant audiences with many investors looking for their dream property. This has created a raft of TV property experts who talk the talk, walk the walk, but do they ever invest in property themselves? We never hear of property transactions involving TV property experts so this prompts the question is it easier to, sell the dream or buy the property?
Theoretical transactions are easy
In theory it is very simple to find the next lucrative property investment which will either create a long-term income stream or bank you a relatively good profit in the short to medium term. Pick an area of the market which is doing well, local economy which is going from strength to strength and a region which has a strong flow of potential tenants. The idea is that a shortage of rental properties will ensure rental values remain strong, even during economic dips, which will help pay down loans, increase equity stakes and provide more capital for the future.
Then there is the idea of buying a property which is in need of significant renovation after which you can either refinance, banking a “profit”, or simply flip and crystallise a profit. The likelihood is that if you walk down the street you could, in theory, spot a number of properties which could benefit from some renovation and create a significant profit. The problem is that it all looks very simple from a distance, it all looks very straightforward but when you get down to the nitty-gritty, there is work to be done.
One issue which we do see covered on a regular basis by property reality programs is investors fighting to control costs. Their initial budget may be on the low side, there could be unexpected issues or time delays increase finance costs and impact forecast profits. If there is one key area in the battle to crystallise a profit on property investment it is the ability to control costs. In reality there are very few property investment projects which come in under budget so if you can maintain costs around about the budget level then you are doing well. This will give you maximum potential to create a short, medium or long-term profit although those looking at rental income are perhaps not under as much pressure in the short term.
Selling the dream is easy, doing the work is difficult
If you think about it, the idea of buying a property, renovating and either selling on of renting out seems easy. It is when you get down to the nitty-gritty when it becomes difficult, a challenge to maintain budgets and a real test of your forecast improvement in the value of the property. Those who are successful in property investment tend to split their projects into individual tasks and tick each one off as it is completed.
It is certainly easier to sell the dream but with determination, research and a strong will there is every potential to make a good profit. Those who fall by the wayside in the early days leave more for those with determination to make things happen.