Buying The Right One

One of the most time consuming elements of investing in property is finding the right house to put your money into; and then trying to negotiate a good price on it. It’s essential that you get this stage right to save yourself from wasting lots of time and money.

Off Plan
Many investors get excited about buying ‘off-plan’. They will generally pay over the odds for property which has a large discount already built in to the asking price. Deals like this can sound very appealing, but you should be diligent to compare prices with other properties in the area to make sure you’re not being taken for a ride.

More often than not, off-plan properties, or other new development opportunities, are sold "in bulk" to buy-to-let investors. This negatively affects the rental value of these properties, as supply generally outweighs demand, for at least a time.

You can make a lot of money by buying off-plan, but just be aware that deals can be made to look a lot better than they actually are.

Area
There are many factors which constitute a good investment property, and the most important of these is finding the right area in which to buy. Purchasing property in an area where you don’t live can be difficult, and you should consider using a property finder to help you with this stage of the process. Fees for this type of service typically range from 1-3% of the purchase price, but will be worth the time and effort you save.

If you are buying in an area which is closer to home, you may consider asking a reputable Estate Agent to recommend good rental areas. They will usually be more than willing to help.

Criteria
Before looking for properties, it is important that you set some clear guidelines as to exactly what it is you’re looking for. There will be a lot of properties to choose from, so it is important that you narrow down your options. Dependent upon your strategy, you may find that only houses under £100,000 will provide the cashflow that you need to obtain a mortgage with a 15% deposit. Our strategy when buying for clients, is to buy property that is in good condition, and usually look at 2 or 3 bedrooms.

Viewing
The next step is to start viewing the properties which closely match your criteria. It is important to remain focussed during this period, as becoming emotionally attached to any property which you view could mean financial suicide. Try to view a property differently to how you would a house you were going to live in. Shelves in the kitchen might be practical, but the kitchen would look much bigger if you get rid of them.

Negotiating
Once you have found a few great properties, you may wish to negotiate on the price. It will depend on how much time you have as to how hard you wish to negotiate - the harder you negotiate, the lower the chances you have of an offer being accepted. This will affect the time and effort you’ll need to invest in the process, and is usually the point you’ll wish you’d paid someone else to do it for you. Negotiating is not easy, especially if you are new to the game. You should always have other options open if you are planning to negotiate hard - be prepared to walk away with nothing.

Housetwo specialise in negotiating on property on behalf of our clients, and because we see a high volume of houses, and offer on only the good ones, you will have your new investment property a lot sooner, and with much less effort, than you would have if you’d tried it yourself.

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