Investment: Property

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Flave21
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Is there a simple way to understand property development?
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Dovakin
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Property development means buying a property, developing it through renovation, then either selling it on for a profit or renting it out to tenants. This can often involve buying a property that is cheap because it needs to be updated and renovated through new furnishings, repairs and maintenance.
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ReadingMum
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There are capital gains considerations when selling and you might be stuck with a property for quite a while during a downturn but you can make a reasonable amount of money if you have the skills or contacts to do the work
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Gabbyss
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Investing in real estate is a good idea, as it will allow you to receive passive income (if you rent out an apartment or house or office space) or make a profit by selling it at a higher price over time. But any investment is a risk. I recently read about Ilya Surkov on the Internet. This man managed to steal investors' money and successfully hide from the Russian police in London.
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NonIndigenous
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You can buy a share of a property now. To own just part of it. Like with stocks and shares. Good if you don't have enough money for the whole thing.
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Flave21
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(Original post by Gabbyss)
Investing in real estate is a good idea, as it will allow you to receive passive income (if you rent out an apartment or house or office space) or make a profit by selling it at a higher price over time. But any investment is a risk. I recently read about Ilya Surkov on the Internet. This man managed to steal investors' money and successfully hide from the Russian police in London.
I kind of like the idea as well, but I have a clue about the process of it, and can you tell me the possible risks please?
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Surnia
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(Original post by Flave21)
I kind of like the idea as well, but I have a clue about the process of it, and can you tell me the possible risks please?
It's a bit cheesy, but watch Homes Under the Hammer; some people on it buy as an investment, so it covers the basic principles.

You need to know your market and be able to find the right type of property in the right location; are you aiming for students, family, is it near transport links, shops etc?

You would need the finances to cover the cost of renovations, including a contingency in case of unexpected issues with the building. You would also need to cover fees and the mortgage payments, the period for the latter could be extensive if you don't get tenants or sell on quickly. If you are letting, would you do it through an agency and pay the costs of that or travel to inspect yourself? There's also the ongoing costs or repair and redecoration if you rent it out, and you might need some furniture in there. End of the day, what's your return going to be after all the expense?

Also, who would do the renovations? You could buy a place and be waiting to get the work done. There's a saying that good builders aren't available immediately, ie they are booked up a while ahead. There are some aspects, like electricals, where you would need a certified tradesman.
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