House price myth?

[Mr D Black]

I watch property programs such as Property Ladder and Homes under the Hammer and the amateur/professional developer still seems to make money out of renovating property. I know there is a time-lag on these programs, but one would have thought it is quite a saturated market. So is it still possible to make money out of property?

[funnywebsite]

You can still make money with the right property. The trick is to get a rundown property in a good area. It must need new windows, kitchen, bathroom. You can do all that and then sell it on for a profit. You can buy houses at auction but you need the cash. There are still some places around that are cheap and you can get one of those and do it up. You have to know what you are looking for.

[{Dakota}]

It all depends on the price of houses in the surrounding area and how much work will need to be done to the property you are renovating.

I bought a property for �40,000, I spent 11 months renovating it and spent a little over �9000 doing so - thankfully, I had friends who could help me with electrics / building / plumbling etc. and I did a lot of the work myself - i.e. apart from the normal wallpaper etc, I put in a new kitchen and bathroom myself. 11 months later I sold it at �64,500 and walked away with a cheesy grin on my face at the �15,500 profit I'd just made.

BUT - the property was very rundown and I managed to get it so cheap because nobody else would touch it. Also, the kitchen and bathroom didn't NEED to be changed out but I believe to this day that if I hadn't I would have maybe just broken even.

For that 11 months, my social life was pretty much put on hold as I spend most weekends giving it all to the property, so that is something you have to be prepared to do too.

[Mr D Black]

Where did you buy your property? Would you do it again? Had properties in general gone up in that area anyway?

Cheers

[{Dakota}]

The property was in Aberdeen City Centre and I would do it again. I am actually planning on going to Uni to study building renivation and interior design I enjoyed it that much - even though it was gruelling sometimes.

The property prices hadn't risen in that time. The way Scottish house market works is that when we put our property on the market we rarely put it as a fixed price (there are exceptions, which I will come to) so we put it on the market as offers over �x. The potential buyers come to view the property and if they like it the put in a noted intererest throught their solicitors, who will in turn tell our solicitor that we have an interest. When enough interest has been gained, the property will go to a closing date, when that dates arrives, our solicitor will get together with those of the people who were interested and each one will say how much each of their clients are willing to pay for the property - then it gets to silly prices. Each client normally has 2 figures and their solicitor will reveal the lowest price first, and if they are outbid, they will then up the price until the highest price "wins". Our solicitor will then come back to us and tell us how much has been offered and are we willing to accept.

So, when I put the propoerty on the market initially, I knew that if I put it at a price to capture a certain market (which would probably be young professionals) the initial price would catch their eye, and hence I get a lot more people looking at the flat than if I'd set it higher and people automatically dismissing it as out of their price range.

Cont.

[{Dakota}]

If a property is at a fixed price, it will usually be because the seller is having problems selling it for one reason or other. The property I bought was a fixed price as it had been on the market for 2 years - it was actually valued at more than what I bought it at (�42,000) and when I came to sell it it was valued at �60,000.

Are you seriously considering doing this type of project or is it a general wondering on your part given all the TV programmes on the subject?