BUILDING PROPERTY PORTFOLIO
Building a property portfolio * safeguard against the next property crash * foreign exchange rates * safest way to invest in property * buying property in UK and overseas
Start of article about investing in property.
Previous page about buying investment property.
There are going to be bargains to be had in abundance and I will have the cash to take advantage of the depressed market and the safety net to be able to buy and hold until the market takes a turn for the better. Sometimes I buy property and do nothing with it, I often buy land simply because there is never going to be any more and so values have to increase. The important thing is to understand that it is all paper profit until you sell. Providing you pay cash, markets can go up, down or sideways and it doesn't really matter. You don't pay tax on profits until you collect.
But how do you go about building a property portfolio without borrowing money?
BUILDING A PROPERTY PORTFOLIO WITHOUT BORROWING
This is all about timing, making the right decisions, being prepared to get your hands dirty and patience and this advice is useless if you are sitting in rented accommodation and unemployed. However, if you already own a house and have a reasonable amount of equity, this will seem so sensible, you will wonder why you never did it before.
This is a slow process that once you have done it two or three times starts to speed up providing the markets move in your favour.
You most likely own a house that is well decorated and maintained that most people would be prepared to move into. It may need a little cosmetic surgery but it isn't going to cost much to put it right. So you put it on the market at the maximum price and go looking for a property that is in poor repair but not needing serious reconstruction. There are always plenty of properties that have been neglected that can be bought for less than market value. You would be well advised to use one of our property finders to do this if you do not know what you are doing. This is a free service.
You do not buy a property until you have sold your own and be prepared to move into a property that is in a sorry state of repair. You should be looking for a property that needs cosmetic decoration, new bathroom and kitchen or possibly a property that can be converted into two flats. Investigate the cost of other similar properties on the market, how long they have been on the market and how quickly any of them sell.
You need to keep back capital to pay for all building works and it is a good idea to get estimates before committing to a property. Once you have done this a couple of times, you will have a good idea of how much everything costs. It isn't just about how much profit you can make on buying and selling a property in this way as timing is everything and you should be looking at repeating this process every three to four months.
You will be moving into a property that you plan to renovate and sell on, so look for good looking but low cost kitchen and bathroom furniture. This maximises your profits, whilst allowing you movement on any offers. Don't hold out for the maximum price. A £25,000 profit in three months is better than a £30,000 profit obtained in five months.
Don't try and do the work yourself if you are not handy or have a well paid full time job. An experienced builder will do the job in half the time, to a better standard and allow you to generate your own income in the meantime. As soon as building work commences, put the property on the market as a refurbished property.
Most people tend to keep moving up and increasing their mortgage, your job is to keep buying property and reselling to reduce and eventually become mortgage free. If you keep repeating the process, within eighteen to twenty-four months, you should own a home that is mortgage free and have enough money to buy a second property.
You do not stop moving at this point. In the UK, you do not pay tax on any profit you make on selling any property that is your main residence, so you can build up substantial capital by repeating this process as many times as you wish. You will however have to pay capital gains tax on any profit you make on any properties you sell that are not your main residence.
Building a property portfolio like this means you are pretty much living in a building site for a few years. Not an ideal situation and it won't suit everyone. However, the more hard headed business minded people amongst you will think that this is a small price to pay for financial security.
You have to get your sums right, you have to buy the right type of property and you have to be well organised. Time is money and if you are wasting time and letting the process drag on, all that will happen is that you will be living in pretty squalid conditions. However, you can do this in any country you wish but check out the tax laws and make sure you have an expert property finder who can advise you.
Competitive UK mortgages
Euro mortgages
Cheapest European removals
Shipping
UK tradesmen
Euro Currency exchange
Discount car hire
Low cost flights
Property rental
Budget hotels
Cheap airport parking
Buying in a seller's market means that you will find it easy to find and buy the bargains but not so easy to move them on so do your homework and be prepared to cut your cloth accordingly. When you have built up your capital, you will find it much easier to operate and take advantage of the property conditions whatever they are. Just remember, if you are starting out now, there is a property crash coming, so I would recommend hanging on until it is well and truly set in. then you can profit from the property crash.
