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Tips When Looking to Buy Old Property to Renovate and Resell

The real estate market can offer big returns; make the right purchase, a rundown place, spend money on a major renovation, and sell for a healthy profit.

image - Tips When Looking to Buy Old Property to Renovate and Resell
Tips When Looking to Buy Old Property to Renovate and Resell

It isn’t quite as simple as that, however, and when looking to renovate properties, there are many aspects to consider; location is critical.

Whatever else happens to the economy, real estate is a finite resource and with a growing global population, demand for land is guaranteed.

Crunch the Numbers

The very first thing to do when you find a suitable property is to crunch the numbers;

  • Cost of property
  • Legal fees & stamp duty
  • Cost of renovation, inclusive of all materials and labor
  • Sale costs

Take a look at the projected valuation of the renovated property and that will give you your margin.

If it all looks good on paper and you’re sure you haven’t overlooked anything, you can start thinking about raising the capital. Here are a few tips to help you generate wealth with your property renovation projects.

Define your Goals

What are you planning to do? Look for a quick turnaround for a good profit if the property market is healthy. It is easy to find out land prices for any area in Thailand and with a fully renovated house, see what the margins are.

Set timelines and be realistic and if it all looks good on paper and you have the financial wherewithal, your project should net you a very good return.

If you renovate, why not rent the property out for a year or two? Think of the extra value, plus you have generated an income renting out the property.

Indeed, some astute investors buy real estate with a view to 10-15 years of rental, before selling when the price is right.

A turnaround would likely take 1-2 years and once the first one is sold, you could start another two at the same time.

Simply replicate the process and take on a manager to oversee the other project, while you focus on the main one. Many of the big property developers started with a single house and things just expanded, it very much depends on your objectives.

Sourcing Materials

Places like the manufacturing electrical products store with an extensive catalogue, you can rewire the house; buying online saves you money; up to 40% cheaper than in a retail outlet for some materials.

Free delivery is the norm, providing your order exceeds a set minimum. Of course, you could leave all that to your builder, which would be a smart way to go; settle on a final design and agree on a price and completion date.

Choosing a Builder

You need a builder who renovates rather than constructs and they work to your budget and ensure that the property is ready for viewing according to the project timeline.

We would strongly advise you to check out a few of the builder’s previous projects, which is a strong indication of what to expect.

If you have a feeling with a specific contractor, do your homework, and if they checkout, you have found the perfect partner for repeat projects, which should be profitable for both of you.


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Staging Property

The professionals really know how to present a property; give them a budget and they will work their magic, with quality furnishings and fixtures that can easily be included in the deal.

This will ensure a quick sale and add the cost to your asking price, while the property looks amazing and the first viewer will probably want to make an offer. Click here for bathroom remodelling tips.

Legal Aspects

Find a local real estate lawyer who can handle every aspect of the purchase and the sale; factor these costs into your project and if the working relationship is good, use them for every project.

Property Auctions

The best places to find cheap real estate is at the bank and finance company auctions, where foreclosed homes come under the hammer and some due diligence before the event should result in a good acquisition for project number one.

This all happens online these days and Google will take you to online real estate auctions, where you will have to register.

Then you can start viewing property lots and look at expected sale prices; as with any auction, you might get lucky and no one has looked at your target property and you pick it up for a song.

You won’t need reminding that location is everything and making the right choices will make sure you reach your goals and the property fetches your asking price.

Funding

If you have the equity in your home to cover the renovation cost, you should be able to get a mortgage to fund the purchase; when looking at lenders, make sure you inform them that you are turning the property around and show them your business plan.

You might know a private investor who is looking for a good ROI over 2 years, which would pay them better than their current investments.

Taxation

Of course, you will have to pay your taxes and if you enlist the help of a local accountant at the very outset, he or she will ensure that you pay the minimum amount of tax, while also offering the best advice.

It always pays to stay on top of government taxes for obvious reasons and for the little it costs; a local accountant takes care of everything.

Many private investors are moving into real estate, as global markets face more uncertainty and if you approach the project with the right attitude, you should come away with a good return.

The key player in your organization is the builder and if you find the right construction company, ongoing projects can be planned.

If you are a good organizer and have covered every aspect of the project, there’s every reason to expect success.


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