Property Development
Buying a property to refurbish and sell with the expectation of making a profit is becoming an increasingly popular form of investment and potentially more secure in an uncertain stock market.
A shortage of surplus funds means small-time investors typically have to live in the property they plan to resell and this can cause some problems, particularly if they get too emotionally attached to the property. But it also has a major tax advantage in that as owner occupiers they do not have any Capital Gains tax to pay when they sell the property.
If you plan to live in the property yourself, remember to keep the buyers' needs in mind when making any improvements and don't overspend. You are in this to make a profit so only improve areas of the house that need improving;
do not overspend on fixtures and fittings, and keep the decoration neutral.
If you decide to buy a property which needs a lot of work done on it, remember to calculate the additional funds you will need to carry out the work. Paying someone else to do the work for you can be expensive, but if you do not have the skills this will be your best option if you want the work to be of a high standard. Potential buyers will be put off by shoddy work and it may affect the selling price (and your profit margin).
Only the more serious developers (often builders) are in a position to take on dilapidated or run-down properties and refurbish them for resale with the properties remaining unoccupied until they are sold.
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