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!
