When I started investing 14 years ago I had £1,000 deposit and I negotiated 33% discount on the market price for the property. 14 months later the property I bought for £20,000 sold for £40,000. I had spent £10,000 doing it up, so I got all that money back and I had a significant deposit to spend on the next house.
I could claim this as my best ever property deal as this property gave me the launch pad to invest many times over, and gave me a significant lump sum which allowed me some lifestyle changes as well as deposit for the next property.
Times change though and this process is more difficult to pull off at the moment due to the lower property prices and lack of motivated buyers. That said, I try to implement this renovation strategy into all the property I now buy to hold so that I’ve added value to each property for the longer term.
My most recent deal, however is my best ever deal to date – here are the details:
5 Bedroom, 3 storey, one bathroom, kitchen/diner, lounge and downstairs cloakroom
Purchase price: £85,000
Revaluation £100,000 after 10 weeks (light refurbishment mortgage)
Actual value £110,000
Renovation included: 2nd bathroom fitted round the cloakroom
6th bedroom added by moving one of the walls
Complete new kitchen
Tiled flooring in hallway and bathroom
Furnishings for all rooms, kitchen, lounge: including white goods and 32” TV £5,000
Rental income: £1,820 per month gross
Council tax £100
Mortgage £333 at 6%
Total income per month NET £1,167
The reason this is my best deal ever is that it’s going to be producing me £1,167 per month NET month after month, and as long as I keep on top of the tenants payments and room rentals, then the NET earnings are £14,000 per annum.
The best part is that this is a repeatable deal, which I will be using over and over again to increase my NET income.
It will take less than 2 years to have no money left in this deal.
The most important elements of this deal are
• being able to buy a property cheaply because it needs significant work doing on it;
• Being able to add a bedroom which brings in an extra £65 to £70 per week;
• Remortgaging as quickly as possible;
• Creating as much rental income as possible;
• getting it rented out quickly;
• making sure the tenants can afford the rent;
• providing a great place to live that the tenants are going to take care of;
• building a relationship with the tenants so that you can deal with any issues quickly.
Whilst this property brings in a significant income, which is clearly important, the most interesting thing about the property and therefore almost more important to me in my portfolio building is that it needed a complete redevelopment.
I love to be able to rectify buildings and bring them back to their former glory. This is what provides me with the incentive to invest and the other elements are added bonuses.
I would challenge you to find the element of property investing that most appeals to you and to work out what your strategy will be around that. If you can inspire yourself to buy the properties and then make money from them then you will find yourself working towards your goals with very little effort, instead of working out forever if there is going to be enough income from each property.
For my free guide on how to invest Your Way go to: www.YvonneEmeryCoaching.co.uk/InvestingYourWay