Many budding real estate developers get their first foot on the ladder by buying a derelict property and carrying out extensive renovation. However, there are a few common mistakes that developers make when tackling this project. Specifically, there are two traps commonly encountered:
Not Taking Enough Time
The design of the property is the first thing prospective buyers will notice, so it's important to take time during this process. A complete redesign of a neglected property can turn a derelict site into a high value home, so make sure that you allocate sufficient time to get this process done correctly.
When renovating a property, it's important to keep your target audience in mind. Is the property situated next to a college and will attract students? Is it close to good schools and in a safe neighborhood that is perfect for a growing family? Whatever your target audience may be, it's important to renovate the property with that in mind.
After you have settled on a target audience, you should ensure you take enough time to plan how to deliver a high value home to prospective buyers. If you rush this stage, you run the risk of delays in actually delivering the project. This can result in your property lying empty for an extended period of time, which is a sure-fire way of losing money.
Buying the Wrong Building
It's easy to become overexcited when buying a new property. Whether you're looking to turn it into your dream family home or to flip in order to sell for profit, you need to be careful that you make good decisions early on the process.
Before looking at properties, you need to ensure that you have a clear end goal in mind. If you want to buy a previously neglected home and turn it into a family home, it probably doesn't matter how long it takes to complete the project. If, however, you are looking to sell the home for a profit, you need to make sure you are buying a property that you will be able to turn around fairly quickly and for sizable profit.
It's worth spending the time required at the outset to determine exactly how much renovation a property requires before you will be able to resell it. You also need to look at the market in your target neighborhood and whether or not you will be able to secure a quick sale.
Welcome to my website. My name is Larry Silva, and I want to talk a bit about private mortgage insurance. You may have heard the term PMI mentioned when you were in the process of purchasing real estate. When I first heard my lender talking about PMI, I was very confused. It was my realtor who sat me down and explained what private mortgage insurance was and when someone is required to purchase it. He told me that PMI is not lifelong insurance; it can be cancelled when the mortgage principal balance reaches a certain point. Once it was explained to me, private mortgage insurance was no longer a mystery or a confusing concept. I would like to pass on what I learned and hope that you find it to be of value.