House prices have dropped five months in a row now, and the media are saying this crash will be worse than 2008. What does that mean for property investors? It has opened up many opportunities for people wanting to buy an investment property in 2023 such as lucrative BRRR (Buy, Refurbish, Refinance, Rent) deals and Serviced Accommodation rentals. I predict that properties will rise in 2023 by 25%, but read on for the full context of this prediction.
When I say house prices, I don’t mean all house prices. I mean my houses! People need to stop thinking about what the economy is going to do, and start thinking about what is going to happen to their economy. My houses will go up, because I buy properties I can add value to. I don’t wait for the market to change, I find properties I can predictably add value to. In this article, I will explain why you shouldn’t wait to buy property and how you can weather the current market fluctuations.
If you wait, you will never buy!
Often people think the best thing to do is to buy properties when prices are on the way up. They start saving for a property when they see prices going up, they start speaking to their mortgage advisor and looking for areas/properties. By the time they are done, the prices are starting to skyrocket, and they wait for them to cool off a bit. Then house prices drop and they don’t want to buy again.
This happens over and over again. The people trying to time the market just end up not buying properties. The money that they have saved up just sits in the bank losing value because of inflation. People that find good deals regardless of the state of the wider economy tend to do a lot better.
Add value using the BRRR strategy
Buy, Refurbish, Refinance, Rent (BRRR) is where you buy a run down property, do it up and then refinance the property at its new value. Done correctly, this allows you to pull out the purchase price plus refurbishment costs in the form of a mortgage. You can then use the same pot of cash again on another property.
BRRR is particularly helpful now that prices are falling. Even if the market drops 10%, if you have forced the value of your property up by 25% you won’t be hit as hard.
Use the Serviced Accommodation strategy as a way to beat mortgage rates
With mortgage rates going up, it is getting harder to make a profit from renting properties as straightforward buy-to-lets. This is putting off some people from buying investment properties right now. But this creates opportunity for those using more creative strategies.
If you rent the property out as a short-stay let on sites like Airbnb or Booking.com, you can make a lot more per month. This means that interest rates are a lot less of a problem. Not only that, but you can even claim back mortgage payments on your taxes when it is used as serviced accommodation! Want to learn more? Come and meet me at the Property Investors Crash Course! Tickets are only £1 and you can get one here.