The Progressive Property Podcast Buy, Refurbish, Refinance, Rent Explained!
In this episode, Kevin talks about one of the most popular strategies for professional property investors; the buy, refurbish, refinance and rent property model. He shares his insights, tips and advice on using this as a strategy and how to make it work successfully for you, time and time again.
KEY TAKEAWAYS
- Many people refinance before renting the property out but Kevin believes you should always rent before refinancing! You want to get your property to the highest standard in that area, so that you get the highest rent possible, this is why it is important to rent it out before refinancing, so you can prove its value.
- If you reverse engineer the process and have the end value in mind, you know how much you can afford your costs to be and how much you can afford to purchase the property for, and ultimately, can ensure you come out of the deal with a profit.
- Delve deep into what purchases will give you the most return. It’s often more profitable to buy two cheaper single lets than to pay for a more expensive property to rent out. Lower demographic areas tend to give more return but it is a fine line between this and somewhere too cheap that will just give you problems, particularly with tenants.
- One of the most important numbers to focus on with this strategy is your ROCE-return on capital employed. How hard is the money you have left in that property working for you? Ideally you want to get all of your initial investment out in the first 12 months.
- When refurbishing, remember this is not going to be your home, so put your personal preferences and tastes aside and just ensure it is a clean and comfortable property for your future tenants.
- Cosmetic areas of the refurb are where you can really add value, especially focusing on kitchens, carpets, bathrooms and redecorating.
BEST MOMENTS
“Reverse engineer the process, start with the end in mind”
“The asking price is unimportant and irrelevant, the important price is the reverse engineered number”
“It’s important to not get emotional, do not bring your own personal tastes into this”
“The rental income has an impact on the end value”
VALUABLE RESOURCES
https://www.progressiveproperty.co.uk
ABOUT THE HOST
Kevin McDonnell is a Speaker, Author, Mentor & Professional Property Investor. He is an expert when it comes to creative property investment strategies. His book No Money Down: Property Invest talks about how to control and cash flow other people’s property to create financial freedom.
CONTACT METHOD
https://www.facebook.com/kevinMcDonnellProperty/
https://kevinmcdonnell.co.uk/