Refurbing (renovating) a property is a “property fundamental” which will really speed your success. It will help to increase the value of the property, and with it your equity, the rental value, and increase your chances of getting a favourable revaluation when you refinance. It’ll also help with sale-ability should you ever need to exit, and will make the property easier to rent out.
Many (particularly new) investors think the only way to get their profit out of a property after a refurb is to sell. Of course, that’s only one way, and often not the best way.
Often the best way is to keep the property (not sell), rent it out and then refinance and pull out your equity.
You’ll have to wait 6 months (from the date you purchase the property, not the end of the refurb) “The Six Month Rule” (actually a guideline and NOT a law, and some lenders don’t follow it or are fairly flexible with it) before you can refinance but if you’ve added enough value through the refurb (which you will have been planning to do) you’ll be able to get a good chunk of the extra value out.
When you know how to do this IT IS entirely possible to buy properties, refurb and refinance and get out all or most of the money you put in.
Then you can “go again” and buy another property and do it all over again.
And this is how you build a portfolio using limited funds.
When you get the hang of it, and the taste for it, you’ll just keep on going!
If you are serious about making a profit from buy to let and would like to learn more, why not take a look at my best-selling “The Successful Property Renovators Workshop”, now updated for 2017.
Here’s to successful property investing
Peter Jones B.Sc FRICS
Chartered Surveyor, author and property investor