The good news for property developers keeps coming as the most recent report from the Office of National Statistics (ONS) has found that the UK housing market is up over 12%. However, it’s not all positive news. The boom has created an increased competition amongst developers for buy-to-sell homes that has led to many investing in riskier ventures.
The property market has long been seen as an ideal get rich quick scheme to outsiders of the trade. The previous boom of the late 1990s and early 2000s inspired a generation of Location Location Location viewers to dust of their tool boxes and get in on the action. While the market quickly weeded out those that weren’t prepared to put the work in, even more experienced developers have been leaving their comfort zones in a bid to take advantage of the market’s boom.
So called risky properties include homes that have been neglected for years or those that have suffered serious damage. Because renovation on these kinds of homes can take several years to complete, especially for those without much experience, many have been caught out of their depth. The demand for homes in the area may even take a turn for the worse by the time the project is ready to be sold.
Those questioning if they have the time and additional funds necessary to complete the renovation could instead consider selling the property unfinished. This could be to another buyer, but, if you don’t have the time and need the capital now, there are specialist companies able to offer you a cash offer on your property whatever the condition.
If you were able to buy the home outright and aren’t currently paying a mortgage, you may want to continue sitting on the home and wait to see how the market develops. If the property is affecting your ability to further invest in the market, though, it may be the tight to time to cut your losses. Those who took out a mortgage will have to ask if the interest cost you’re paying will be outweighed by any changes likely to occur in the evolving market.
While cutting your losses might seem like too drastic an option now, it’s in the future where these decisions really pay off. You don’t want the rest of your portfolio to be limited because one property is eating up all your money. New to the property trade? Take a look at our post on what not to do.
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