PROPERTY DEVELOPMENT WITH NO CAPITAL
There are many ways of making money, but over
recent years one stands alone as being a
virtually proven way to make money, with
security built in at the same time. Few
businesses are as secure, nor offer a chance
to make thousands of dollars for a single,
simple deal.
Property dealing is no small time opportunity,
and it's far from risk free, but the
potential rewards make it well worth
considering. It is the one method where
people have become very rich very quickly.
Property investment used to be the preserve
of the very rich, but over the years property
ownership has become more widespread and much
simpler.
Though property prices have risen sharply
over the last couple of years, it does not
mean that profits cannot be made. Simply
that a greater investment is required -
offering, of course, subsequently higher
profits.
SUCCESS WITHOUT CAPITAL
In the past, to succeed, you needed thousands
of dollars of ready cash. A loan wouldn't do,
and in fact was rarely available to newcomers.
Nowadays however this is no longer essential.
A very meagre capital sum - even no capital
at all - can mean success. And just one
project can generate all you need for future
developments.
Before starting, see how much money of your
own you can raise. See if you can borrow
from friends and relatives, perhaps for a
share of any profits. If you can get a few
hundred to start with, then that is a very
good start.
Next, check out the potential for raising
capital. Financial institutions are keen to
lend you money, but it is as well to take
professional and independent advice on this.
You could raise a mortgage on any existing
property.
A final way to get finance is to get people
to come in with you as a syndicate. Place
'Capital Wanted' advertisements in
newspapers, or reply to the 'Capital
Available' ones. The basic idea is that you
invest your time while others invest money,
but that the proceeds are divided equally at
the end. It can work - get a solicitor to
advise and set up the syndicate though.
MORE PROFESSIONAL ADVISERS
Property investment must be dealt with in a
very careful way, so you will certainly need
expert professional advisers to help you.
If you are trading with other people, a
limited company may be a good idea. Take
the advice of a solicitor on this in any
case.
Banks are a useful contact for advice on
finances and handling money. You will also
need an accountant.
Insurance brokers can identify all the
different types of cover you might need.
Architects and surveyors can help with
assessing and valuing property and drawing
up plans for the work you will do. Some can
even arrange and supervise all the work too.
The statutory planning and building
authorities - at the local town hall - are
not only a source of information on regulations,
but can provide much general advice too.
All in all, remember that although property
can be exceedingly profitable, there is an
element of risk involved. You must take
professional advice from all of these
advisers. Otherwise it is quite possible that
you could lose money.
Once ready to go ahead, there are several
types of project you could consider.
PROPERTY RENOVATION
This area offers some of the biggest profits.
Basically, you just buy run down property,
restore it and quickly resell. Opportunities
are available for those without capital to
form a syndicate.
Look for suitable property locally. Ask to
buy it rather than waiting for 'For Sale'
boards. Of course, a lot of old cottages etc.
have been done up already, but property
deteriorates all the time, so there are
continuous opportunities.
Once located, a surveyor can advise on
renovation costs of property in a poor
condition, and hence suggest if a profit
might be possible. Set a budget for the
renovations and, as long as you stick to it,
a property profit is virtually assured. Of
course, the fluctuation of prices can be a
problem, but also an advantage.
VIEWING AND SELLING
Those with a keen eye can make money by
simply buying property which they consider
to be undervalued. Perhaps someone needs to
sell desperately to move. Then re-selling
when prices are higher. Watch the movement
of the market and take advice from an estate
agent - you might pay one a retainer.
BUYING AT AUCTION
Further careful studying of the property
market and the auction scene offers a chance
to buy auctioned property at 20% plus off
the normal market price. Rarer than in the
past, but still possible.
BUILDING
For those interested in a major project,
then building a property offers enormous
potential for profit, especially in areas
where property is scarce. This can make
one-third profit on the price of the
property.
There are several books on self-building to
advise you. One snag is that it can be hard
to raise capital to buy vacant land.
RE-DECORATION
Some properties will not sell because of
poor decoration. A good way of making fast
money is to buy such property, re-decorate
it simply, then sell. It really does work.
White painted walls sell over hideous and
unusual wallpapers!
The scheme operates best in conjunction with
renovation, but can work as a decorate-only
project, i.e. no structural work etc.
SUB-DIVIDING
Properties from older days were invariably
large to accommodate large families and their
servants etc. However, modern families
require, and can only afford, much smaller
properties. Hence one of the major property
projects is in sub-division.
The typical way of doing this is to buy a
large Victorian or Edwardian house and divide
it up into flats. Often this is a very
simply business. Sometimes it is more
complex and would require an architect to
design the sub-division.
If this project can be operated in
conjunction with renovation, then so much the
better, but it doesn't have to be. Such is
the project that it's even possible to buy
quite new houses and do this too.
Profits are possible on the basis that
smaller homes are much more valuable per
square foot than large ones. So, for example,
a property worth $500,000 as a whole could
easily be worth six flats at $140,000 each.
A NOTE - HOLIDAY PROPERTIES
Where any of the property renovation or
conversion projects can be applied to
holiday type rental property, then the
profits will generally be rather higher than
for full time residential. Original cost
may be higher too - but not if you can find
an area within a couple of hours of a major
city - good for weekends and holidays.
COMMERCIAL PROPERTY
At one time, commercial property was nowhere
near as profitable as residential property.
Since the latest price boom however, all of
this has changed and office, factory and
warehouse property especially, can be very
profitable.
One of the most lucrative opportunities is
the buying of large commercial units and
sub-dividing them into smaller units for
today's boom in small business.
Whereas at one time the trend was to convert
residential property (large houses etc.)
into commercial property, the reverse is now
true. So, for example, mills, factories,
even shops, are very profitably renovated
and converted into homes!
SUMMARY
Many property projects are very ambitious,
but, in fact, most of them can be started
without any capital via the syndicate
method as discussed. If you have got the
ideas - and the ideas are here - there are
people who will put up the money. Making
property a virtually, if not totally,
capital free project!
