Many potential investors are keen to invest in building development. Here are a few terms you should be familiar with before you invest in real estate:
Renovating a Building
‘Renovation’ means restoring a building to its original condition. This is done by repairing, cleaning, tidying or rebuilding the place. In some cases, the building is improved so it is better than it was before. Investors may renovate the building by altering its structure or rebuilding sections of it. Many investors are opting for renovation projects as they can be bought at affordable prices, renovated at a low cost and then sold for a profit. New investors should choose buildings that do not require major work but instead needs some modifications or updating, such as a new kitchen or bathroom. Simple changes like adding replacement windows and doors can add considerable value to a property. However, conduct detailed market research for a successful renovation project.
Empty buildings can work in your favor and provide a good bargain if you are able to carry out the required work. Most empty buildings are situated in well-established residential areas. New investors can easily find affordable buildings in area of regeneration and such properties offer high value after renovation. The buildings may be empty for a variety of reasons. It is possible that the owner may have died or had to move out for some reason or perhaps the landlord is keeping hold of the building, waiting for its price to rise until it is actually worth selling in the market. Whatever the reason for the building being empty, find out who owns it by checking with the local authorities. Local authorities have a register for vacant buildings but they may be unwilling to share this information with you. In addition, you must find out if the building is registered with the Land Registry. They will most likely provide you with the owner’s details for a small fee. If all else fails, contact the neighbors to find out if they have contact details of the owner. Be cautious as some mortgage companies are not willing to lend on empty buildings while on the other hand, some may offer a loan but will release only a part of the loan initially.
The most common sort of property conversion is converting a building into bedsits or flats. This is a large building development process and requires careful research and financial planning. While these projects initially require a lot of hard work, the profits are much greater. Before converting a building, decide whether you intend to sell the flats as individual units or allow the tenants to manage the building. While making this decision, you will have to consider the short and long-term fluctuations in the market. Despite conversion projects being expensive and complex, they have become extensively popular in recent years, partially due to government incentives and tax breaks. So, now that you are familiar with these terms, understanding the building development process won’t be a problem for you.