Below are some useful tips for a successful
short-term property investment based on my experience and from what I have
heard has worked for others. Hope it will help you as well!
Choose
a dedicated broker to sell the apartment. We invited
several brokers for interviews when it was time to sell our apartment. Check if
the brokers are familiar with the area. Check if they have sold other
apartments in the area. Check their previous experience. Check how successful
the brokers have been.
One of the invited brokers told us how lucky a
buyer of his had been to get an apartment for a really low price. Would you
like to have this broker to sell your apartment to a really low price..?
Another broker showed great confidence and had trustworthy answers to all our
questions. Also, he told us about how many successful sales he had made. He had
broken a number of sales records in different apartment buildings. Either he
was good at bragging or he was this good! We finally chose this broker because
he seemed more motivated than the other brokers, had a positive attitude, and
he was a bit of a “dreamer” where nothing was impossible. And he did indeed
break another record as he sold our apartment for the highest price ever in our
building – and the broker sold it for much higher than the average price in the
area!
If you can get a broker on recommendation it is also worth a lot, but make sure to always interview the person to get a feeling about his/her capacity and sales methodology.
Renovate
smartly. Ask yourself during a renovation: “What is the apartment lacking and will it
be worth renovating?”. Think in terms of “renovation cost vs. benefit” and go
through all decisions thoroughly before conducting them. Every single little
improvement will cost time and money and not everything is worth doing.
Consider also whether you should go for quality renovation or if would be ok to
use cheaper quality (IKEA has great kitchens for a reasonable price!).
As I mentioned in an earlier posting, my wife’s
and my apartment was basically fully renovated when we moved in and the
previous owner had flipped the apartment with a huge profit. He had lived in
the apartment for about six month and used IKEA in the kitchen and bathroom –
and it looked great! Also, don’t just do the bare minimum when renovating, it
will look cheap. That is the difference in what our last apartment sold for
when we sold it and what it sold for when we purchased it. We made very few
changes but had exclusive furniture, very good taste and a few showpieces of
furniture.
Use
an appealing taste which fits well with the rest of your apartment.
I have visited many apartments for sale as this is an interest of mine and many
have been top renovated but unfortunately not always with good taste. I
remember one apartment with a fully renovated bathroom with carefully selected
and expensive material. It would have been a great bathroom if it wouldn’t have
been for the weird African style with crazy wall colors. It didn’t fly with the
rest of the apartment, and certainly not with the taste of the average
apartment buyer. It was such a waste with renovation money.
Speaking of bathrooms; if you decide to renovate
one, make it unique for god’s sake! It seems like most renovated bathrooms too
often look the same, with black tile floors, white tile walls and the same fixtures.
Throw something unique in, but do it with taste so that it is still uncluttered
and/or luxurious looking.
Figure to the left shows our bathroom
before renovation and the right photo the result after renovation. Both of the
bathrooms are unique in their own way… My wife and I wanted to create an
exclusive bathroom with an old-fashion feeling that went with the rest of the
style of our apartment from 1882. We are very happy with the result!
Choose
your object wisely. It is important to choose an apartment
that has qualities that is appealing to the market and will boost your chances
for a successful sale. My wife and I normally look for the following criteria
when we search for apartments:
·
Balcony.
We, as many others, value highly the opportunity to sit outdoor in the morning with
a cup of coffee, or sitting a summer evening on the balcony having a cold beer
and enjoying the good weather!
·
Apartments located high up in the
building. This gives the apartment better sun light. I
never look at apartments on the bottom floor. Many people don’t even go to
showings for apartments on the bottom floor apartments because the risk is
higher for burglary, less sun light in the apartment and the fact that there is
often little privacy because people can look into the apartment from the street.
·
Look for some aspects that make the
apartment unique. Little quirks that not everyone may
like, but that a few will find completely charming.
·
Be strict about floors. My
wife and I are very picky about the floors. They must be all the same material
and preferably old and charming, or very “earthy and textured”. Same material
throughout the apartment creates a homogenous and nice feeling. We never choose
shiny floors and never different colors. Remove room borders if possible when
renovating.
·
Location.
Many property investors claim that the most important factor for a successful
property investment is LOCATION! Location is to my opinion important but not
priority #1. I do agree that this factor is very important if you are looking
for a long term investment, but in the short term the other parameters in this
article can be just as important.
·
Renovation potential.
Make sure that the apartment has the renovation potential you are looking for,
and that it is within your budget.
·
Old apartments, turn-of-the century
apartments if possible. High ceilings create a nice spacious feeling
to the apartments, and old ornaments such as crown moldings gives charm to the
apartment.
·
Elevator.
Having an elevator makes a huge difference if you would live on the fifth
floor… (even on the first floor if you are lazy J
). Older people, who often are strong buyers, would probably not even consider
an apartment high up in a building without an elevator.
·
Fireplace.
Imagine sitting in front of a fireplace with a glass of wine at night when it
is snowing outside. Do I need to write more about this point?
·
Choose an open floor plan if possible.
This creates a more spacious apartment and good social areas.
Last but not least, make sure to have good luck and good timing during the sales process! This is probably one of the more important factors when selling an apartment, but unfortunately also the most difficult to control J. All it takes is two parties being really dedicated and interested in the same apartment. It can make a difference of several ten thousand dollars…
Also,
some other smaller tips along the way:
·
Buy in an up-going property market. It
is easier to sell in an up-going market and the apartment increases in value
while being in your possession. Consider the micro- and macro-economic when
buying as this often affects the property market. For instance, is the market
at the bottom of a recession? How will the property market be affected by the
Euro-crisis? Read the business newspapers to follow what is happening on the
market!
·
Make sure to be ok to stay in the apartment
for a longer time, in case the apartment would be difficult to sell (for
instance due to a declining property market.) and you don’t want to make a loss
·
Live in the apartment while you renovate
it – makes it cheaper
·
Consider what apartment size you want to
target. Should you target a smaller apartment in an attractive area or a larger
apartment for the same amount in a less attractive area? I would recommend the
smaller apartment if you are going to renovate – it is less to renovate and
saves both time and money – and chances for a better investment payoff are
often higher in attractive areas.
Building wealth is often difficult, but with these tips, it doesn’t need to be. I am impressed with the way you have shared these steps.
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