I already own my own home and, despite a still shaky market, have managed to increase it’s value by around 25% in 18 months. This is because I bought at a knock-down price and have done some targeted improvement without spending too much on them. I managed to secure my current home for such a good price because it had been neglected by the current owners and was very poorly staged (if at all) for sale. By the time I viewed it it had been languishing on the realtor’s books for 6 months or more.
I have no immediate plans to sell my current home – after all the work I have had done it now looks fantastic and is in a great location. But refurbishing it and increasing its value has given me the confidence to believe I could do it all over again on another property – this time purely as an investment. I have considered re-mortgaging my own home based on its new, higher value and releasing some equity to serve as the down payment on my first investment home. I have also considered alternative personal loans and discussed with my parents the possibility of them becoming guarantors if I can secure one of the guarantor loans available for raising the deposit. In the end the source of the deposit will be decided on cost – the lowest interest rate deal basically.
Of course, I would need to buy at a low price and not over-spend on the improvements but I have already seen a few likely looking candidates in my neighborhood that are ripe for improvement but are failing to sell. And I have done it before – I have some experience of what is required and have learnt some lessons about what worked well and what didn’t work as well when it came to the improvements.
Of course it could be that the owners of my target properties are holding out for top dollar and have no urgent need to sell. Only by actually putting in an offer will I find out. Still I am excited by the prospect of becoming a property investor. I actually enjoy the stressful process of buying a home and I love improving, decorating and refurbishing, but don’t necessarily want that going on around me in my own home.
After years of renting I am relishing the quiet and privacy of a place of my own.
My wish list for the perfect investment property is simple and is as follows:
- 2 bedrooms at least
- 2 bathrooms
- Some outside space but I am equally happy with a house or an apartment
- Within easy commuting distance of the city center
It took me a long while to decide on my own first home but that time spent viewing numerous properties can now be put to good use for buying an investment property. I know which areas to avoid, either because they are too expensive, too noisy, too long a commute to the city etc. I know what sort of small houses are easy and inexpensive to renovate, and which ones provide the best value for money (those that show poorly because they have dated décor, but are good solid homes with good room sizes)
