Despite market uncertainty created by Brexit, one property entrepreneur believes that now is exactly the time for those considering investing in property to take the leap
The uncertainty surrounding Brexit has, for many, meant holding back from investing in property. Reports from across the country indicating that property values are falling would make this seem like a sound approach, but one man, having thrived during two recessions as a property developer, believes that now is exactly the time to take the leap.
Bruce Burkitt, Founder and Managing Director of Property Experts, a privately funded investment company specialising in residential property acquisition, says that Brexit provides the perfect opportunity to invest in property.
‘In a rising market, anyone with means can invest in property, regardless of whether they make calculations correctly, as general market increases will usually absorb errors,’ he says.
‘But contrary to common thought, a volatile, falling market creates a great opportunity to buy,’ he continues, but making money in this market is a skill, and there are guidelines to follow, as outlined below.
Bruce Burkitt’s Guide to
Buying Property During Brexit
1 Make a low offer
Take advantage of the buyers’ market by making low offers. Look to buy at least 10-15% below market value, noting that the market value is often lower than the asking price. This creates an initial cushion from day one equity.
2 Add value
Find an angle. The real gains in a property deal can be found by adding value, not just by simply refurbishing it. You could sub-divide a very large freehold one-bedroom apartment into two bedrooms, or convert a larger unit into several apartments. Alternatively, buy a large property and create a house in multiple occupation (HMO) to rent out or sell as small units.
3 Don’t cut corners
A lot of investors fall down in the fit-out of a property. Cutting corners seems like a simple way to reduce costs, but it will stand against you when you come to sell the property. There are a lot of ways to add value that cost less than one might expect, such as installing quality integrated kitchen appliances, instant boiling water taps, granite worktops, glass splashbacks and LED lighting. These all help add a ‘wow’ factor when selling the property on.
4 Sell a lifestyle
I would recommend spending the money to achieve the standard of finish that will encourage buyers to choose your property over the competition. It is vital to focus on selling a lifestyle – create a home that the buyer can walk into and picture themselves living in instantly.
5 Plan an exit strategy
If the primary plan is to resell the home then budget to sell for 10% less than today’s market value. In this way, if the prices drop, there is a buffer for the investment, but if it sells for more, then it’s a pleasant surprise. In the event that prices really slide and the property does not sell, however, investors should ensure there is finance in place to take out a buy-to-let mortgage on the property, and that rental values will cover mortgage repayments by at least 150%.
‘Making money in this market requires forward planning, business acumen and a head-over-heart strategy, and there is no margin for error,’ concludes Burkitt. ‘ But I believe that by following this plan, it is more than possible to begin or extend a property portfolio.’
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