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With the UK’s housing market declining, and with a well-known lack of houses in many regions of the country, below market value property investors have an opportunity on their hand. If you’re one of them and have the cash, you can buy properties cheaply now and sell them once the housing market stabilizes, for a considerable profit.
Of course that’s easier said than done. Investing in a BMV property is never easy if you don’t know how to go about it. Here are some useful tips that will hopefully help you make an investment you won’t come to regret later.
• Trust You Intuition When Assessing the Value of a Property
One of the challenges of BMV property investment is assessing the true value of a property. Without a good approximation of this value you cannot really known whether you’re really buying below market value or not. The price of a property up for sale – especially in these times – is hardly its real value. To be on the safe side, assess the local market, noticing at what prices other similar properties sell, and then relying on your intuition to make the right decision.
• It’s Easier to Buy BMV If You Already Have the Money
There are many small investors who first have to sell a property before investing in a new one. This is not a fortunate scenario, since at the moment many sellers who offer BMV prices wish to get rid of their properties right away, and consequently look for buyers ready to pay the buying price on the spot. Asking a seller who offers an attractive price to wait for you to sell a property first before buying their own, means at best a higher selling price in the end resulting from the delay, and at worst a plain refusal.
• Be Reasonable About Your Price
You can make a good investment by buying with 20% to 25% cheaper than the market value. Even 15% is lucrative if you don’t have big fees to pay. Hoping for more than 25% is being unrealistic, even in these times when the housing market is declining. You may get far more than 25%, some shrewd investors pull off 50%, but if you go about hoping to buy at half the price all properties available for sale you’re deceiving yourself.
• Invest With a Partner More Readily Than with a Real Estate Agency
When it comes to a below market value property investment, it’s preferable to work with a partner than with real estate experts to find properties to buy. While real estate agencies are not bad, they always put their own interests first, and you will rarely get the best deals through them.
• Be Prepared to Take Some Risks
All investments carry a certain degree of risk, and BMV property investments are no exception. While it’s true that right now they are safer in Britain than in other parts of Europe, they are not entirely devoid of risks. Trust your intuition and be cautious.
A below market value property investment can bring a significant profit relatively quickly, especially these days. If you decide to invest, compare investment opportunities carefully and you won’t come to regret your investment later on.