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Friday, December 29th, 2017

Properties to renovate: a great investment opportunity

The purchase and renovation of properties as an investment is a common practice, but one must know which property is the perfect one and when is the ideal time to buy it.

Historic villa to be renovated in RocafortMany people buy properties in need of renovation in order to design the house of their dreams, but many other invest in these types of properties with the aim of renting or selling them after the refurbishing works.

Enlisting into a renovation project is a complex process and it takes a lot of time, but the reward is worth the effort, as if it is properly done, the property’s value will increase whether if you want to use it as your own home or to sell it at a higher price.

If the purpose of the refurbishing is the profitability generated by its renting or selling, it is essential to pay attention to a series of criteria, among others, the amount invested, if the refurbishing has been successfully carried out and the end-use of the property.

But this question always arises: when is the best time to buy a property to renovate?

Property with hydraulic floors in the centre of Valencia

The key is to find a property at a price below market price in that specific area. A high value property in a cheap neighborhood does not generate profitability, just as owning a low value property in a high standing neighborhood can have a boomerang effect. However, there are other factors to keep in mind such as the state of the property and its current value, and therefore it is necessary to count on the technical inspector and the expert appraisers’ help.

If the state of conservation of the property and its value are favorable, the next step is to start with the renovation works. Our recommendation is, once again, to turn to an expert in order to carry out the task, as a good refurbishment can increase the property’s value, which results in a higher profitability (between the 15 and 20%).

Finally, if your intention is not to reside in the refurbished property but to make a profit of it, you will have to be realistic when it comes to establish the renting or selling price. Do not forget that the price will depend on all the factors and objectives aforementioned.

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