Buying an investment property is one of the most expensive and significant transactions you may ever make, so doing it right and getting the best price are important. Property prices are affected by different factors, from local demand to any known defects in the home itself. With prices and demand both continuing to rise, use these strategies to ensure that you get the best deal.
Do Your ResearchYour estate agent can advise you on the ideal price, but a little extra research into the local area and the reason for the sale can help inform your offer. Find out the sale price for similar properties as well as what this particular home sold for in the past. (The latter detail won’t apply to a new build.) Other useful information includes:
- How long the home has been for sale
- Why the owners are selling- are they in a rush to move?
Don’t Aim Too HighDepending on where you are looking to buy your investment property, it’s not always a good idea to make an offer that’s too high. Some locations are so popular that you can be driven into a sealed bid, which may not be to your advantage. Try to negotiate whenever possible. Don’t go in with too high an offer at the start. It’s rarely necessary: most sellers won’t expect you to offer the asking price right away. Give yourself room to manoeuvre when it comes to negotiating. Some hot spot property markets may be an exception- because it’s a seller’s market, you will want to get as close as possible to the asking price to beat the competition.
Don’t OverstretchYou may immediately fall in love with a property, but don’t let emotions drive your offer- it’s a guaranteed way to result in you paying too much and an investment property is about realising a profit. Stick to your budget. You should have a maximum price you are willing to pay for a property based on what you can afford, and don’t forget stamp duty and and repair or upgrading costs. If your first offer isn’t accepted, ask the estate agent what the seller might consider. Then select a price that’s midway between what the agent advises and your original offer. Your ability to bargain will depend on how much the seller wants to move and if there are other people interested in the property.
Be AppealingWhen you’re competing with other would-be investors for a certain property, try selling yourself as a buyer. Sellers are generally attracted to cash or chain free buyers because you won’t encounter issues related to selling your own property. If you aren’t a cash buyer you can improve your position by assuring the seller that you have a ‘mortgage in principle’ or other finances secured for the investment.
About Living Smart
At Living Smart we help investors achieve better returns on their capital through investment in lucrative property development projects. Our expertise lies in identifying opportunities, securing and maximising the correct planning consent and determining the best exit.
We are flexible in our approach and tailor our investment packages to the individual needs of investors. Please contact us for a free 30-minute consultation and the opportunity to meet us and take a tour of our current and completed projects.
About The Author
With a diverse background in digital marketing, property development, sales, and customer relationship management Ben handles recruitment, sourcing, sales, and lettings at Living Smart.