Yahoo Finance Phil Spencer on how to become a property mogul with less than £30k
Making money on property is seldom quick or easy — the key is to treat it as a business investment rather than an emotional one.
If you only have £30k then there are a few things to consider before you start building your property empire.
There are two ways to make money from real estate: if you own a property but don’t live in it you can let it out. And whether you live in it or not, you can make a profit in the future if you sell it for more than you paid for it. To make a real profit, you need to pick a property which will rise in value faster than the general market trend.
There are three ways to do this: 1) buy in an ‘undervalued’ area where prices will outperform the norm, 2) make the property bigger, or 3) make it better. If you can score on even two of these fronts, you’ll be on your way to becoming a property mogul.
It’s best to look at areas where your savings can stretch to a 20 per cent deposit to make mortgage rates more favourable.
The first home I ever bought was a flat on a busy road in Battersea. This was 1996, when Battersea was as unfashionable as it was affordable. Over time, prices went up as people were priced out of nearby Fulham and Clapham, and I added extra value by converting the one large flat into two.
Few first-time buyers can buy in Battersea these days, so if I was starting out now I’d be looking at areas further out. Try to identify hotspots that people are starting to be priced out of and then look in the neighbouring boroughs.
Phil Spencer is the presenter of ‘Location, Location, Location’ and co-founder of Move iQ, the advice site for buyers and renters (moveiq.co.uk)
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