So the competition to find deals is high. What can you do to get there first?
Present yourself to estate agents as a serious buyer who can make a quick decision. The best traction is ready finance and the ability to exchange quickly without borrowing or needing mortgage approval.
If you are immediately proceedable, you’ll be first on the viewing list.
Check the area that has what your tenants need. Is there handy transport and shops, is it near the university and good nightlife? Look at your competition on property sites to see what the going rent is and which properties take time to rent out – and do the maths thoroughly before make your move.
Visit the properties before you decide. If it’s a renovation project, get a survey done. Check the legal documents, either downloaded from the seller’s website or requested from the vendor’s solicitor and check with your own solicitor that there are no covenants that could affect the property’s value.
Another deal-sourcing method is to grill lettings agents about landlords who are seeking to reinvest elsewhere, either to free up funds or for retirement.
The property may come with the added advantage of the tenants in situ and furnishings. This could be a really good deal. You can track what the rental performance has been with the agent, including maintenance, improvements and voids.
Or if you are looking for new-build, target developers at key moments – when they are about to present the bank with client reservation fees as proof of funding, or near the end of construction, when they are keen to move on.
“Developers often get customers who decide not to buy after 12 weeks for silly reasons such as a leaky tap, so when we have a motivated client who can exchange quickly, they’ll offer discounts as high as 20 per cent in prime locations.”
Ultimately, the key to making a profit is the price you pay, not the price you sell for. Spot where an area or house is undervalued and make an offer, or look for sellers who revise their house price consistently over a short period as they probably need a quick sale.
“To help beat the competition, constant communication with estate agents is essential to ensure the investor is approached before the property hits the market.”