Buy to let has been the preferred way to make money from property for over a decade now. But now the economic climate isn’t, perhaps, quite so favourable for buy to let what other property opportunities might property investors consider?

One opportunity to consider might be property renovation. Here are the main reasons why property renovation could be the way to make money in property over the next few years:

* There can be sourcing advantages. Ordinary domestic buyers often can’t buy property suitable for renovation – perhaps because once they’ve saved their deposit they don’t have a budget for renovation costs. That means there can be less competition, and less price competition, especially from first time buyers.

* Buying costs are lower. So investment costs are lower. You might be able to finance a project substantially from cash resources, meaning you’re not reliant on securing a mortgage.

* Stamp duty savings. As the value of property requiring renovation is by definition lower than a property in good condition the stamp duty will also be less.

* Tax benefits. There can be tax benefits associated with property renovation that aren’t probably aren’t available if you are merely maintaining a property. (It’s best to consult a tax adviser if you want to take full advantage of tax allowances.)

* Opportunity to add value. A well managed renovation project will (or should) be worth more when completed than cost of purchase + renovation costs.

* Opportunity to extend. By adding an extension you can add additional value over and above the value added by the renovation. Even something as simple as extending a two bedroom property into a three bedroom one could add £thousands to the capital value.

* Opportunity to develop. By developing the land or property you can create a profit centre additional to the renovation profits. For example, by using part of an existing plot as a building plot.

* Planning advantages. Permitted development rights, for example, allow you to carry out a wide range of renovations without requiring planning consent. It’s generally much more straightforward than a property development.

* Opportunity to maximise leverage. Once a property is renovated you can remortgage it – if you want or need to do so – based on its new renovated value.

* Keeps your options open. Once you have completed a renovation you can either rent it, sell it, or follow a strategy combining both – so risk is minimised.

* Plus, newly renovated property tends to sell or rent at a premium, compared to similar not recently renovated property. Buyers and tenants are usually prepared to pay extra for new.

Tip. Bear in mind that there are opportunities to renovate both residential or commercial property, or even both – for example a commercial to residential property renovation.

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