Many would be interested in how to go about buying and selling property for profit

Buying and selling a benefit that used to be "easy." By the millennium, you can buy a property and found to be making money in a few years and in some cases, a few months. Some people (and mortgage lenders!) Seemed to think that housing prices continue to rise, others warned of a housing bubble, but there seem to be able to accurately predict when it would burst.

However, it exploded, from the U.S. and the UK hitting hard. The recession seems to start in real estate and in a few months we have seen sales fall 50% prices fall 20% from a peak of 2007. Rental income usually rises when housing prices fall, has been falling year after year with 5% or more, have increased the gaps as tenant rent arrears.

At the moment we seem to be in a strange state of flux. Nobody seems to know what will happen next. Nobody can believe that a sharp recession, less than 12 months may seem 'more'. However, reports of green shoots in the housing market and overall economy seems to talk about every day. The private sector is asking for their order books are growing again, and recent figures suggest even unemployment is slowing.



But things are really starting to turn around? What about the huge debt we owe as a country, estimated at £ 13,000 per head of our people *? It is true that the company has taken the brunt of the credit crunch and the public sector has not been squeezed? If this is true, what effect would job cuts and public sector pay be frozen (or cutting) has on our economy - and the housing market - the next year?

More importantly, as property investors, what does this mean for you? What is the good news? What is the bad news? And most importantly, if you have money to invest, are there properties that are "safe" to invest? They are short-term benefits of the property is possible, or is it only possible to make money with property in the long run?

The good news

Many investors who had withdrawn from the market back in 2006 (or earlier) have been buying heavily since October 2008. Those who bought during the first six months of the accident benefited by buying bargain over the large range of sales and a massive increase in foreclosures. Buy "below market value" became the phrase "favorite" of the investment goods industry and shrewd property investors were buying up to 50% below their real value.

The bad news

The credit crunch yet it means that investment in these offers only for cash rich buyers and buy to let, commercial and development financing became difficult and sometimes impossible to ensure that. The return of the deposit requirements of 25%, higher financing costs and, more recently, a dramatic fall in the supply of goods in many areas has become even "below market value" bids which in recent months has been difficult to finance and find.

The difficulties of funding is the six-month re-mortgage rules to prevent an investor buys a property "below market value" and then immediately re-mortgage to get cash to invest in the following property. While some still say that this can be done, most investment experts believe that it is only possible if during the process, someone commits mortgage fraud.

Therefore, if you can get cash, this is a good time to invest?

Currently there are two schools of thought. The first believes that we are in an "artificial" state of recovery. The artificially low interest rates, government support is now to stop foreclosure and have yet to see the effect of reducing public sector costs. As a result of a school of thought continues to predict property prices falling further and stay low for some years as the impact of unemployment and the return to normal interest rates continue to depress the economy.

The second school of thought is that despite the low demand and supply is causing the current signs of 'green shoots', the likelihood that many of the properties back on the market is small. Some predict that interest rates will remain low for many years (CEBR estimate interest rates will only increase by 2% in 2014). As a result, their predictions are that property prices will remain stable, and in areas where there is a shortage of supply, as the South East and London prices, even small increases can be displayed.

Any of these scenarios that you think will happen, one thing is sure, that stain the market fund "is impossible. Only known to have been reached after a user? For example, for those hoping to pick up bargains inauguration, the latest statistics from David Sandeman in the EI Group's exposure to the "bottom" of the foreclosure market (ie, when sold through foreclosure houses auctions were at their highest level) was 4 th quarter of 2008 - nearly a year ago!

However, investors will always be well able to make money - in good markets and bad. And although it may have lost some of the bargains that have existed in the 12 months, there is still a lot of areas and properties that are worth considering in the investment, provided there is: -

1. He carried out extensive research
2. Consider different ways to make money from property
3. Accurately the value of property you are buying
4. Identified potential future capital growth

Research, Research, Research

In my opinion, few people carry out enough research when buying an investment property, especially in unfamiliar areas. Those who do not visit before buying a property must not be reversed at all, unless you have previously tried, tested and trusted independent people who perform independent assessments of any club owned or supply companies.

When researching an area or the property is essential for: -

1. Visit the street and its surroundings, providing current research and the demand from buyers / tenants perspective.

2. If the property is necessary to update, make sure you have exact quote, and the restoration of the goods are delivered to a yield of 20%.

3. If you are thinking of renting the property, check the rental value of an agent who specializes in renting instead of a real estate agent / letting agent that may have a conflict of interest or just starting a business just cheap to help survive the recession.

4. Check which properties are limited now to buy or rent. Areas that seem to be recovering from the property price and rent and falls are likely to be those that will generate a capital growth in the future.

5. Reliable information on the potential value of sales of real estate agent and RICS an independent expert acting on their behalf.

6. Take a look at the future supply of other properties that could affect demand for your property. If you are buying a two bedroom apartment, so if you plan to build 1,000 more? What planning permission has already given the local authority?

7. Learn about the changes in population in the future. If you are buying a property for rent to students, sufficient families that can afford to buy a large property when you want to sell?

8. If you are buying a property with three bedrooms and are planning to become a five-bed, make sure that the cost of additional space will be covered by a real increase in the value of the property.

Consider different ways to make money with the property

Many people only look to buy to let or renovation to make money from the property. However, it may also invest in: -

1. Buy land and build to sell or rent.
2. Commercial rather than residential property.
3. Development of mixed-use properties, for example, buy a shop and an apartment above and renovation to sell or rent then at a profit.
4. Real estate investment funds and trade unions.
5. Working with developers to purchase properties below market value through a system of "exchange part".

Accurately assess property

When we use the properties of value in exchange a business professional, who used to spend about three days and the use of five professionals to help property values ​​accurately. And we had to. To make money with partial payment you have to buy a property at a discount of 10-20% and then sell the property (usually through agents) within three months, or you're likely to start to lose money.

For the value of a property that you need: -

Understanding what is happening in the local market

Use Hometrack and then visit local agents of property that has been the sale of similar properties. Hometrack show how many weeks and the number of viewings required to sell properties as well as what the average offer price is compared to asking price. Use this information to check with local stakeholders how accurate it is and what his experience in the market today.

Identify previously "sold property prices: -

1. Go to a real estate portal Rightmove example and click on "selling price".
2. Put in the postcode of the property.
3. Select a time of the first distance of 1 mile, then if the results of little or no select up to 3 kilometers.
4. Put on your type of property.
5. Put at 10% below the minimum price valuation of the property currently has.
6. Put in a 10% above the maximum price of the property you have.
7. Then check the box that says "are sold on sale, subject to contract"
8. Find properties that have just passed on the offer / sale and then continue with the agent who sold the property.

Find similar properties comparable recently sold have been

A recent study comparable is vital to understanding the likely value of a property, and is defined as a property that has sold recently in a similar location, preferably on the same road or a similar property nearby street semi eg, 1930 , independent or Victorian terrace.

Other valuation methods

You can use the automated systems 'on-line' as Fotocasa, but beware, these are not as accurate as conducting its own investigation and their numbers are usually based on "past" no future prices.

Finally, if you are sure you have a property worth investing in, especially if it is in a terrible state and difficult to value, call a local RICS inspector to give a professional assessment including the likely costs of works and check these costs with local merchants.

Identify potential future capital growth

Until the credit crisis, townhouses have outperformed other types of residential investment from the perspective of capital over the past ten years. Both investors and first time buyers competing to purchase this type of property and led to an increase in the value of these properties usually two beds.

In the next five years, with a large public debt and the recovery of a recession might mean income of the population does not increase much and with a drop in the number of people able to invest, property prices is likely to increase a lot. In fact, some reports (eg, Knight Frank) suggest that they take until 2014 to restore prices to their 2007 levels.

Therefore, if you want to buy a property now and sell it at a profit in the future, you need to begin to predict what types of properties in your area are likely to sell in the future and attract as many buyers as possible.

It is unlikely that there will be a "magic" answer to this. It will depend on local supply of goods, the demand (which will vary depending on the population and the availability of funding) and how well the local economy recovers. To help you do this you have to look at: -

1. Possible changes in the population.
2. Expected increase in supply of new construction and housing.
3. Changes in transport or facilitate shortening the time needed to reach towns and cities.
4. Zones and types of properties are still scarce, now and in the future.

For example, if the area has to invest in an aging population, then perhaps there is a shortage of bungalows with gardens manageable. If another area has a shortage of two bedroom apartments near train station, shops and work and a relatively young population, then this type of property may be best to invest in.

In short there are "no shortcuts to making money with property in the future. You have to have cash for deposits and fees, and carry out extensive research on the feasibility of an investment property now and in the future.

Finally, with the government who want a lot of ways to pay your debt, you also need to ensure you get good legal and tax advice on what to buy properties in the right way and minimize the tax bills that can be applied now and in the future.