Wealthy Wednesday: 28 August 2019
How DO I find the perfect property?
First time home owners dream of getting onto the property ladder. Of course, the house in question must be picture perfect – the kind of house you can move into in the morning and invite friends over for sundowners that very same day!
While that dream holds appeal, remember that if the property needs absolutely zero work to make it liveable, it means there is no money in the deal.
If you want to make money by investing in property, you have to find something that requires work. If the property really is perfect in every way, how can you possibly increase its value?
Think of it like this: if most people walk into the house and fall in love with it, it is not worth buying.
Yes, I know it is a hassle and hard work and it takes time and effort and money. Which is exactly why most people simply don’t have an appetite for doing renovations of any kind on a house. If that’s you – stop reading. I can assure you property is not a get rich quickly scheme. It is a get rich slowly over time scheme.
If you’d rather do what is easy, you will never be rich.
When I say that, people say gasp in horror and exclaim “You are so harsh Tanya!” Maybe I am. Rather know what you are letting yourself into BEFORE you begin because when it gets tough – and it will – you need to be clear on why you wanted to start investing in property in the first place.
However, if you can see the massive opportunity afforded to people who are prepared to do more than the average person, congratulations, keep reading!
The value of a house is largely determined by face value. Let’s start with the bigger picture.
Is the property free standing or it is in a complex or block of flats?
Is it modern or old fashioned?
Does the living area flow nicely or is there a bedroom directly off the kitchen?
Is the kitchen/lounge/dining room open plan or is it composed of tiny boxy rooms that feel dark and cramped?
What about the garden?
Is there one?
If yes, is it large, perhaps offering an opportunity to build another house/cottage/unit or is there no development space available at all?
The point of all these questions is to get you to start looking at property differently, to train your eye to spot the opportunity.
Now we’ll zoom in a little closer. The two areas people concentrate on when looking for a new home are the kitchen and the bathroom. If the kitchen is old, dark and badly planned with rusty appliances, most people will turn up their noses and walk (or run!) away! Little do they know it is possible to revamp a kitchen cost effectively. Don’t be put off by the massive price tag attached to converting a kitchen to YOUR dream kitchen. When playing in the Buy To Let market, you are not building your dream home, you are creating an average home for average people earning average salaries to live in.
To attract tenants, you don’t need SMEG appliances and granite counter tops. You need clean, simple, functional. Do your research and find out how much it would cost to get the kitchen revamped to slightly above average. The flow and the color of the kitchen matter much more than the fittings. White, combined with very neutral colors if you must have color - is a winning formula.
Over to the bathroom. If the bathroom feels old and has avocado or brown tiles on the walls, strip them out and paint the walls white with paint that can handle the constant damp. You may choose to tile the bathroom walls, if you do, don’t tile all the way to the ceiling - tile to eye height. This gives a clean look without breaking the bank. Replace the sanitary ware with white, functional pieces. Tile the floors or use concrete screeding.
Think of the longevity of your finishes. For example, wooden floors in a wet environment is not a good call. Wooden flooring might work for the rest of the house, but perhaps non-slip tiles are more cost effective. Think durable, waterproof and appealing.
Finally, we turn our attention to the rest of the house. Replace old light fittings with simple modern ones. Ask at the lighting store which fitting has been in stock for the longest and is most likely to remain in stock. Get THAT fitting! The big idea is that if it breaks or is broken by an unruly tenant throwing a wild party, it will be easy and cost effective to replace.
Bedrooms need to feel warm and appealing. Consider carpeting the bedrooms. Wooden flooring is popular and gives a nice clean finish but again, check the durability of the finish. Tenants are notoriously hard on flooring so do your research and get something that doesn’t need to be replaced annually.
Don’t follow the trends, follow classic finishes that offer longevity not finishes that are hot for the season and see you needing to replace everything next year!
The garden needs to be well maintained to attract tenants. So many people don’t want to spend the money on mowing the lawn and weeding the flower beds believing that the tenant is only interested in the actual living space. Don’t be fooled into thinking that! First impressions count and it is well worth the money to make sure the property looks well groomed.
Build a garden service into the rental amount because as much as your new tenant promises to be an avid gardener who cannot wait to take care of your beautiful roses and fruit trees, life gets busy and when it does, your garden will be low on their priority list. A reliable, affordable garden service takes the stress out of owning a property with a medium to big garden.
Use these tips and tricks to change the way you look at potential investments. Thinking differently goes a long way when investing in property.
To quote Dr Wayne Dyer:
“When you change the way you look at things, the things you look at change.”
WHAT I AM READING: The Liberty of our Language Revealed Thomas Blackwell
Thomas recently certified me as a BECOMING YOUR BEST trainer. I spent three days with Thomas and was blown away by his steadfast character and ability to captivate his audience through the power of his words. Thomas wrote this book and it is as intriguing as he is. We all know this intellectually - our thoughts create our words, our words drive our actions and our actions determine our results. However, Thomas manages to weave age old wisdom into a nail biting fictional story that has you thinking deeply about the words you use and why you use them.
Powerful, transformational - highly recommended!
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