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Should you upgrade investment property?

May 27, 2009 in Property management by Kez

You have done your first ever deal on an investment property, got the keys and ready to either move in it or rent it. This is usually the most exciting part of the purchase and many new investors like to think about the possibility of upgrading the property to their taste so they can cherish the purchase a bit more. But, if the property is in good order and is perfectly habitable, is an upgrade really essential? The quick answer to the question is No! Especially of the property is a pure investment

 

If you purchase a property with the intention of living in without any consideration of ever selling then you can be forgiven to upgrade the house in exactly the way you want it, after all you are going to be living in it for a while so you may as well decorate and design it to your taste. However, if the property that you purchase is an interim step towards your dream house or a property that you are planning to let or planning to flip it for quick profit then the last thing you want to start doing is to start adding your designer touches. Forget about adding the new luxury kitchen, bathroom, a new conservatory or patios, taking such action when not needed simply means losing a large chunk of your profit in the upgrades.

 

You have to treat every property purchase as a business purchase and not to purchase to fall in love with the property. You goal is to fall with the investment DEAL not the actual property itself. Remember that you have a buy to let mortgage to take care of.

 

You should only spend money on aspects of the property that will help you realize a bigger profit. If that doesn’t happen then you are wasting your hard earned profit. And as good as you getting your cash and burning it before your eyes. By all means make the property more presentable by doing some new painting and other tidy ups, but forget the granite work tops and the designer touches, let the new owner who wants the luxuries to add them themselves. Bottom line you are in business to make money, not to take on properties to do up as in the fancy staged TV programs. These programs are “made up” and are not right for investors who have better things to do, which is buy more property and hence more profit! We are not here for fantasy and design, we are here to take on the mundane deal making tasks to constantly generate profit.

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