Most people can come up with at least a couple of ways with which they can make money from property, but these are largely going to be conventional and rather run of the mill. Here we take a look at both the obvious and the unusual, giving you the full range of options available should you want to make property work for you.
1. Buy a neglected property
Let’s start with one of the more obvious ways to make a profit from property. Buying a home that needs work is one of the best ways to show a fast return on your investment, but it isn’t for everyone.
You may be able to handle minor improvements, such as painting and decorating and small makeovers, but are you prepared to go the whole hog and buy a property that needs a lot more than just a little TLC? It’s something you really need to consider prior to purchase, as major renovations can prove to be both stressful and time-consuming.
Homes that need minor repairs and a quick lick of paint can pay dividends too, but they are harder to come by these days. Regardless of the scale of the work involved, remember to factor in all costs, and don’t forget the fees and taxes associated with selling when making your final calculations.
2. Bag a bargain
Buy low, sell high. Easy, right? Granted, it’s the most obvious way to make money from property, but if we left it off of our list, someone would have said, ‘Hey, what about…?’
Unfortunately, as it’s a bit of a no-brainer, it’s always been extremely difficult to find underpriced gems in a competitive arena such as buying and selling homes, but that doesn’t mean BMV (below market value) property sales no longer exist.
You may know someone who wants a quick sale, or it could simply come down to good timing. Having a great relationship with your local estate agent can definitely help with the latter. Let them know the kind of property you’re looking for and tell them you’re willing to move fast on any BMV property deals. With your agent doing the groundwork for you, your part of the buying process could be as simple as taking a phone call.
While we’re on the predictable property profit turners, we might as well get good old buy-to-let out of the way. You’d have to have been living under a rock for the last couple of decades to not realise that becoming a landlord is one of the prime ways that you can turn a profit with property.
With record low interest rates hurting savers, buy-to-let offers a fantastic alternative. Property markets have outperformed stocks and other investment vehicles for years, and they’ve even weathered recessions remarkably well, so it’s little wonder they’re so attractive.
Is it too late to join the legions of landlords making money from property? Definitely not. Is it harder than it used to be? With things such as the 3% increase in Stamp Duty, undoubtedly. However, when you weigh up your financial options and look at other speculative ways to increase your wealth, property still wins hands down. Not only that, searching for the best investment property in your area can be exciting too!
4. Rent a room
Let’s face it, the cost of living these days is putting pressure on a lot of people. Wages have been stagnant for a while, yet everything else continues to rise unabated. Renting out spare rooms, therefore, is becoming an increasingly popular option.
While it may not be to everyone’s taste, taking in a lodger can bring in a handsome amount of cash. Plus, if you sign up to the Rent A Room scheme, you are currently allowed to keep the first £7,500 each year without paying any tax. Not bad!
5. Make a profit from parking
Councils are making life more and more difficult for motorists, and you can capitalise on this if you have an unused driveway. This is especially true if you live in and around a city centre or have great transport links close by.
Your first reaction may be, ‘Is it worth the hassle?’. Well, the hassle-factor is actually quite low, and when you take a look at the returns you can get from sites such as parkonmydrive.com, you might just be persuaded to give it a shot.
Take a look at our article on how important parking is to a property’s value. In this post, we explain why you should definitely take off-street parking into consideration, even if you don’t own a car.
6. Go green
It’s now common knowledge that installing green technology can help us cut our bills and make us feel good about lessening our impact on the environment, but did you know that you can actually make money by doing so too?
The initial outlay to install solar panels, wind generators, ground source heat pumps and the like is quite high (up in the thousands), but it won’t be long before you get that back, as you’ll be able to sell electricity back to the National Grid whenever you have excess energy. This is on top of the fact that you’ll no longer be paying any electricity bills yourself, a saving that can easily run into four figures for larger households.
7. Let your home while you’re on holiday
Going away? Why not consider letting your home to someone who’s in need of accommodation while you’re away? Depending on where you are and what’s going on around you, tidy profits can be made from short-term property lets.
Take our area, East London, as an example. During the 2012 Olympic Games, property rentals were fetching £5,000 per week. Imagine the holiday you could have with that amount of cash coming in!
8. Go from big to small
Another way to make profit from property is to buy big and make small. Converting houses into flats has always been popular with investors. However, with the amount of first time buyers struggling to get a foot on the property ladder increasing, this strategy makes more sense than ever as flats are in such high demand.
Generation Rent is very real. Nowadays, barely half of all families in Britain own their own home, and many simply cannot afford to rent larger properties. Flats, therefore, are highly sought after, both for renting out and for resale, so it’s certainly an option worth considering.
Don’t dive straight into this one without doing your homework, though. Look at other properties in the same road to see if they have been converted, as you’ll stand a much better chance of being accepted for planning permission if a precedence has already been set.
It’s also important to get a good handle on the costs involved before you buy. Work out how much the renovation work is going to be and compare this figure with the current market value, both for selling and renting. This will give you a good idea of whether your prospective investment is going to be viable or not.
9. Stay abreast of the news
Everyone knows the importance of location, but most people make the mistake of simply looking at what is already there. Don’t fall into that trap - think ahead! Investors looking to make a profit out of property deals are always aware of what’s going on in their areas, and you should be too.
Take Crossrail, for example. If you were savvy enough to buy property in Forest Gate or Manor Park (two of our local residential areas) back in 2005 when the ‘hybrid bill’ was passed by parliament, you would be sitting very pretty indeed!
From buying BMV property to going green, our nine ways to make a profit from property will give you a good idea of how you can make bricks and mortar work for you. Our expert team are always happy to answer any questions you may have, so if you are looking to invest in property around Wanstead, Buckhurst Hill, or their surrounding areas, give us a call.