Of the 7 Golden Rules, we outlined at the start of this section, this one is probably the one most open for interpretation and debate.
‘Adding value’ is something you hear a lot, in this industry and is a simple concept, illustrated by a good number of TV shows, that only show this one-aspect to property investment.
The idea is, of course, to refurbish a property, to the extent, that the property increases in value.
And some investors look for properties where they can achieve this, with success.
However, there are many that don’t go near this approach, due to there being a lot of unknowns inherent to it, including:
At Property Investments UK we typically look for properties which we do not need to refurbish, though, naturally, when the right project comes along, we will go for it.
But wherever possible, we try to keep our up-front costs for our projects and investments, to a minimum.
And yet, the reasons why some investors seek out properties that can be done up, are logical and these projects can work well.
If you are able to increase the value of the property quickly and refinance or sell, there is money to be made from taking something like that on.
But the time/return factor is extremely important to get right and refurbishment work has a tendency to go on longer and cost more than initially expected.
Especially if your refurbishment team is not the best they could be or your project management skills are not completely on-point.
Refurbishment projects and ‘adding value’ can be a very good thing to engage in but when it is a business project, rather than a labour-of-love then you need to make sure that your numbers add up and your schedule, meticulously planned and followed to a ‘T’.
Otherwise, you could be facing an unprofitable and stressful venture.