Five top tips for real estate investors this year and be…

“These products make it possible to quickly provide flexible financing, so that our customers can obtain the financing they need for their next real estate project.”

To reinforce this notion, Saif Derzi, head of SDGB Properties, who has worked with Together, lists five top tips for aspiring property investors to consider.

1. Take your time finding the right place

There’s this well-known saying about the three most important factors when it comes to choosing your home, location, location, location.

Do your research to find out exactly what the market is like in your chosen region. What are buyers and tenants looking for in this region? How much are they willing to spend? Talking to a real estate or rental agent is a good place to start.

2. Keep your eyes peeled for opportunities…but be careful

When looking for a property you will want to find a place where you can add value. Look for things like unused attics that could be bedrooms, large gardens that could be sold, empty outbuildings, or if a building could be divided into apartments.

If the condition is poor, see if there is a similar house for sale nearby that is in better condition. Then take a tour of that home to better visualize what is possible in the home you are considering.

However, if you suspect structural problems, be very careful and always request an investigation. If the property has complex issues, that doesn’t mean you can’t continue. It just means that you need to make sure this is factored into the price you pay and your renovation budget.

3. Keep your project handy

It’s always a good idea to shop in an area near you. Ideally, you’ll want it to be within an hour’s drive of where you live. Even if you employ a site manager and contractors to carry out the work, being able to make regular visits will help ensure that everything goes according to plan and meets your expectations.

If you know a neighborhood because it’s local, that’s a bonus because you’ll likely have a better understanding of its amenities and popular streets. With this local knowledge, you’ll be more confident to make a quick offer once the perfect property comes on the market.

4. Be ambitious, but recognize your limits

You need to decide what type of investment you are comfortable with – buy-to-let or buy-to-sell.

While buy-to-let is a great way to provide a long-term income stream, it’s not an easy way to turn a quick buck – you’ll need to be dedicated and recognize that your tenants’ needs are always paramount .

To be successful with buy-sell, you’ll usually need to buy a property that needs work, whether it’s improving the interior or converting the attic into an extra bedroom.

You then make the necessary renovations and sell for a profit, taking care to take into account the costs of the work. The more work required, the greater the risk and the greater the potential profit – but it’s a good idea not to take on too much if this is your first project.

5. Find the right lender for you

Having the right lender in your area is essential. They will allow you to quickly seize an opportunity and carry out the necessary work. There are several financing options open to property developers, from mortgages to bridging loans. The one you choose will depend on your situation and the type of property you are buying.

Often, if a property is run down and has little value, you may have a harder time getting a mortgage that would cover renovation costs. A bridging loan or development financing, only available through specialist lenders, could quickly help you in this situation.

*Saif Derzi is the head of SDGB Properties, a property investment and development company based in Lincolnshire.