House buying companies are known for helping people who need to sell their properties fast. However, what’s in it for them? No business can survive on philanthropy alone. Therefore, it is a valid question to ask: what happens after house buying companies purchase a property.
Here are 3 things house buying companies do with properties they purchase:
1) House buying companies may purchase property, renovate it, and then sell it on
In an ideal world buying a property, renovating it, then selling it for a profit would be a walk in the park. However, there are a lot of factors house buying companies need to consider to ensure they are making a good investment.
House buying companies need to be sure that anything they purchase will make them a profit. For this reason, house buying companies must be very good at researching sold house prices and renovation costs to determine what kind of profit (if any) can be realised from a property purchase.
2) House buying companies may purchase property to rent out
It is a common misconception that landlords make huge profits. However, this is far from the truth.
House buying companies are responsible for the maintenance of their properties, and this can be costly. As a result, landlords need to always be mindful of the running costs of their rental properties.
Failing to adhere to legislation is another way landlords can become unstuck. For example, from October 1, 2015, there is new legislation requiring all landlords to put fire alarms in all their properties. As a result, house buying companies that do not adhere to such laws face fines and even criminal charges.
There are substantial penalties for house buying companies that do not manage their properties appropriately. This reality is in stark contrast to many media reports stating how easy it is to be a landlord.
3) House buying companies that purchase property and build a house in the garden
Most people think that buy 1 get 1 free only applies to supermarket checkout aisles. However, house buying companies also apply this concept when they buy a property and build a house in the garden.
Some house buying companies buy property with large gardens and build a separate house there. House buying companies that do this benefit from having only spent money on 1 property and ending up with 2 properties after the 2nd property is built. However, like with everything, house buying companies need to be very diligent when deciding to make such purchases.