How Conservative Should You Be?
When investing in property, if your goal is to make a profit you have to take into account what kind of profit you want to make.
Some people will say that it is easy to make a profit, if by profit you mean a small one. Buying a house cheap, and doing the minimum necessary to renovate it, may well see you make some money on the deal because you have taken a house in disrepair and sold it in a liveable condition.
However, there is always the danger that you will find more that is wrong with the house the longer you work on it.
You have to have a strategy when it comes to renovating a house, because without being firm and decisive you will allow far too much slippage when making decisions, and it is this slippage that can turn a likely profit into a loss.
Instead of taking an overly flexible strategy, you need to have a certain amount of strictness when deciding what you will do. Sticking to your philosophy – up to a certain point, anyway – is important because if you fail to stick to that philosophy you will be hesitant in making crucial decisions.
Equally, though, you need to be ready to spend money to make money. Being conservative and unbending as regards your budget could see you not reaching a decent price on the sale of any renovated property.
Have a budget you would like to stay within, and a slightly higher “contingency budget” which allows for potential mishaps along the way – by doing this you will increase potential profit