If you’re looking to secure your financial future by making some investments, you’ve probably already considered real estate. It’s one of the most popular investment strategies right now because the value of property is constantly rising, and you can make good returns if you rent a property out long term, or flip houses and sell them on in the short term.
The most common way that people invest in real estate is through buy-to-let properties. If you can find a nice property in a desirable location, for a good price, you can make some good money. But if you really want to improve your real estate earnings, you should consider buying a custom built home. You have complete control over the details of the property, so you can design a house that renters will be desperate to move into right away. However, there are a lot of challenges involved with custom building a house and you will only see the benefit if you do it in the right way. These are some of the most important things to remember when building a custom investment property.
When you are looking for a plot and home package, it’s easy to be taken in by bait advertising and sometimes, investors end up going through the whole process and paying more money than they need to. Bait advertising relies heavily on one word; ‘from.’ You’ll see a huge billboard with a very attractive looking price plastered all over it. But if you look closer, you’ll notice that the price displayed is the lowest possible price, and it says, from that price, which means most properties are a lot more expensive. Once you go through the design process, you’ll find that there is an added cost for everything and the salespeople will try to upsell you on the door handles, light switches, and whatever else. By the time you’ve finished, that amazing price that you saw on the billboard has disappeared and you will end up paying way over the odds. It’s important to remember that if something looks too good to be true, it is. Make sure that you know exactly what you are paying for before you sign anything.
Turnkey properties are called that because they should be ready to move in right away and everything will be there. Simply turn the key in the lock and that’s it. A lot of investors think that this is the best option and sometimes, it can be. But only if your idea of a finished property is the same as the developer and, unfortunately, it isn’t most of the time. It will only be small details like letterboxes, fences, or landscaping, but they will cost you a lot of money to add after the house has been finished. You won’t be able to rent the place out until you are done, which means you’re losing money there as well. It’s better to go with a developer that gives you options and involves you throughout the process, rather than going for a turnkey property.
Obviously, you want to get a good deal and the more you save on the property, the higher your profits will be when you start renting it out. However, you have to strike a balance between quality and price. There have been a lot of problems with new builds and the quality of workmanship recently, and if you go with a cheap developer, you’re likely to get a house with lots of problems. As the landlord, you’ll be responsible for fixing things that break, so a house that is cheap initially will actually be more expensive in the long term, and your tenants won’t be happy. It’s more sensible to go with a reputable company like Lowe Design Build and pay for quality, rather than going for the cheapest company you can find. It will save you money in the long term and you will find it easier to rent out because it will be a nicer property.
Variable Price Contracts
A lot of building companies will offer you variable price contracts. They will give you a cost for the materials and a rough cost, but they will be reluctant to give you a fixed price for the full build. That’s a big risk because costs can quickly spiral out of control and once you are halfway through the build, you can’t really do much about it. It’s always best to search around and find a fixed price contract if you can.
As long as you keep these things in mind, you should be able to build a successful real estate investment property.