Investing in property is a great way to secure a better financial future.
But if you don’t know how to help your investments grow, you could be missing out on cashing in.
To ensure you are on the path for maximum wealth creation, you need to understand how to add value and build equity.
Here are six ways you can do exactly that.
Get A Discount
We all love a bargain and if you can purchase a property for less than the seller was asking for, you have immediate equity in your portfolio. While it might sound like a stretch to achieve, it really isn’t. Sellers are often driven by more than finances, and often need to sell fast.
When people need to get rid of a property for whatever reason, or they have their finances tied up else-where there is an opportunity to negotiate on price and get a better outcome. Don’t be afraid to do this.
Think about ways to create a win/ win for all. An example of this could be that the seller is asking $500,000 and you’re wanting to offer $450,000 – could you also offer a quick settlement? If they’re eager to sell that could help get them over the line.
Renovate
Also known as “sweat equity” – renovating parts, or all, of a property takes some time, effort and money, but can add great value.
Refreshing tired kitchens and bathrooms can make a property much more appealing to a tenant, and a clean, more modern-look will also attract those who are happy to spend more in rent.
Buy Land And Build
If you have the right knowledge and expertise to be able to build a house, then buying a plot of land is a great value proposition.
As long as the house hasn’t been built yet, even if you buy a house and land package, you will only pay Stamp Duty on the land value, so you’re making a significant saving straight away.
Buy Off Plan
We talk a lot about playing the long game when it comes to property investment and buying a property “off plan” really speaks to that idea.
Purchasing a property from a developer while still in the development phase will only require you to pay a deposit amount.
From that point you technically own and control the property but have no further expenses for a period of up to two years.
If you do your research and buy in the right market, the property value could increase over that period, meaning you have created additional value at no effort or cost.
Add Paper Value
This might sound intimidating if you’ve never done it, but it’s actually not that hard to do and it can create some significant value.
Once you have made your purchase you can add paper value by applying to your local council to develop the property, perhaps by adding a second storey or a commercial unit with an apartment above.
You will need to pay for some plans to be drawn up and approved, but once they are you may have added hundreds of thousands of dollars of value (on paper) to your property, without having to lay down a single brick.
If this is something you’re interested in doing, get some help and advice pre-purchase to make sure the property could be considered for this type of development.
Develop
Adding paper value can stop there – but if you want to go the whole way and put those papers into action, you can go ahead and develop.
Demolishing an old house to make way for a new build, or even simply adding a storey, is going to involve some financial outlay, but do it right and it will add a great deal of equity upon completion.
Get the inside info.
Good property investors are nimble and adapt fast. They stay informed and enrol a team of experts to help them excel in times where others can’t. But most importantly, they start with a plan that is deliberate and based around the goals they wish to achieve.
To find out how you can be one of those people, we’re running a free property investing seminar.
Here you’ll be equipped with the tools, resources and support to thrive, and most importantly, not make the fatal mistakes that others make when they fail to have a strong plan in place that can properly maximise their potential and the opportunities that are available to them.
Limited spaces available.
Book here – Property Investment Seminar
Jason Whitton
Founder – Positive Real Estate