The Financial Fairy Tales Blog

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Getting on the property ladder is becoming increasingly more difficult. Before taking the dive into real estate, it’s important to consider all your options. Here are the four major ways that you can own property.

Traditional Buying

Traditional buying is still the main route into property. This is where you buy both the building and the land. Many choose to go through real estate brokers to find property. Finding a seller direct can sometimes be cheaper, but limits options. Some agents may charge buying fees, but this is generally reserved only for sellers. In either case, negotiating the price is recommended – you should aim to haggle of 5% of the value if you can.

You can also buy property off of an auction. Auctions are also a great opportunity for flipping property – discussed later on.

Leasing

In most cases, leasing property involved renting for a fixed term. This could be anything from a year or more. Some lease opportunities are more flexible than other – you may own the property, just not the land. In this instance, you may be able to make minor adjustments to the house as if it were you own. When it comes to traditional renting, hammering a nail in the wall might need permission from your landlord. Leasing is only half owning property, but is a cheaper alternative to buying and a more fixed alternative to renting. In many major cities around the world, the bulk of property is leased.

Self-building

Can’t find a property that meets your criteria? You can always build your own. It can cost up to a third of the price of buying (building and buying the land included), with the option of a self-build mortgage preventing you from having to pay outright. However, it can be a lengthier and more complex procedure. Whilst hiring architects, solicitors and builders isn’t too difficult a task, buying the land is a complex procedure. Land may be environmentally protected, may have limiting restrictions set by a local planning committee or may be physically unbuildable due to the ground. Before buying always check with the current landowner as to what the current restrictions are. In most cases you may negotiate prices.

Flipping

Flipping involves swapping one property directly for another, and so requires you to already own some form of property. By doing it effectively, you can earn a lot of money. Fail to flip correctly and you’ll lose a lot of money, making it a risky venture. Many who get involved in flipping property will buy property off an auction, possibly renovate it and then sell it for a profit. You can flip property without being worried about the profits however – if you want to directly swap with someone to a property that is less value but may be in a better location, you can do this.