How Property Investors Can Boost Their Profits
The UK’s booming property market continues to be seen as a relative safe haven for investors. Both for newcomers and established investors alike, buying and selling at the right time, and in the right locations, can prove immensely profitable.
Even so, there is more to maximising profits on property developments and investments than these two considerations alone. Timing and location may hold the key to successful investments, but there are other ways to boost profits on property investments and developments.
1. Know Your Development Finance Options
Your preferred approach to funding will play a major role in determining the profitability of your next project. Choosing the right lender is essential, as is understanding the various different types of development finance available.
Examples of which include specialist property development finance, residential and commercial bridging loans, bridge-to-let, buy-to-let mortgages and many more besides. Enlisting the support of a skilled broker who can negotiate on your behalf is also essential. Be mindful of the fact that many development finance specialists offer their services exclusively via broker introductions, and do not work directly with borrowers.
2. Consider Commercial Conversions
Some types of commercial properties naturally have more profit potential than their residential counterparts. Square-foot prices for commercial properties are almost always lower, and they also tend to be more spacious.
This opens the door to a wide variety of potential conversion opportunities. Some of the most profitable property investments in recent history have involved structures like warehouses and factories being converted into chic industrial-style apartments. All at a comparatively low cost to the investor, yet generating huge profits by capitalising on demand.
3. Squeeze Every Available Inch
It can often be more profitable to convert a large property into several separate dwellings than to sell or rent it out as a whole. If it is possible and affordable to do so, it is, therefore, worth considering this type of conversion project.
In some locations, converting larger homes into multiple student residences can guarantee outstanding long-term returns. It is a case of researching local demand for specific types of properties, and determining which of the two options makes the most sense. The key is to carefully consider the property’s untapped potential, not just the potential it has in its current form.
4. Build On What You Have
With average property prices at an all-time high, more people than ever before are setting their sights on self-build options. If you already own one or more properties that incorporate even a modest area of land, it could be prime real estate for a self-build project.
Building a property on land you already own can work out exponentially cheaper than buying a property that already exists. A wide variety of self-build mortgage options are available from specialist lenders, including short-term bridging loans for investors looking to generate the biggest possible profits within a short space of time.
5. Take Advantage of Time-Critical Property Purchase Opportunities
Many (if not most) potentially lucrative property investment opportunities never appear on the conventional market. Instead, they change hands at auction, by way of an entirely different (and much more rapid) transaction.
Purchasing properties at auction using conventional funding solutions is not an option. This is where bridging loans and specialist auction finance can help. Bridging finance enables quick-thinking investors to take full advantage of time-critical property purchase opportunities. Not to mention, gain access to the kinds of fixer-upper ‘flip homes’ that would never be listed on the conventional property market.
6. Get Serious with Data Analysis
Savvy property investment and development finance decisions are always made on the basis of facts, not assumptions or gut instincts. Everything about a location’s current and future potential must be taken into account, before considering an investment property purchase.
This means assessing and analysing things like traffic congestion, general transport infrastructure, school ratings, healthcare, crime rates and so on – anything that could impact demand in the future. Remember that even when looking to flip properties for profit short-term, potential buyers will focus heavily on the property’s long-term desirability.