This strategy consists of 4 parts: BUY, REFURBISHMENT, REFINANCE, RENT.
1. BUY
The first step is to buy a property in poor condition that you can add value to. This is usually done through cash, bridging finance or a joint venture partnership. However, there are many more ways to finance this deal.
2. REFURBISHMENT
Once the property is secured you can then begin refurbishing it to a higher standard. The key to this is ARBITRAGE. You want to create the most value using the least amount of money. However, we recommend that no corners are cut as this will cost more in the long run. Our rule is if you wouldn’t let a family member live there then fix it.
3. REFINANCE
Having added value to the property, you want to make sure you achieve the highest valuation possible. Make sure you build a good rapport with the valuer and present examples of comparables within the area. Also, always ask for a slightly higher valuation than you want so the valuer has room to come down and you’re still happy.
4. RENT
The final part is to rent your newly refurbished property to tenants. Make sure the properties are well marketed to achieve maximum rent and the tenants are well vetted to avoid any problems further down the line.
Done correctly this can be one of, if not the most lucrative strategies in property. It also happens to be something we specialise in.
Please get in touch if you have any questions or need advice on any situations!
