One of the most anticipated property goals is buying under market value. But price is what you pay and value is what you get!
Don’t mistaken this goal to be the secret to a successful property investment. It is not… Many who approach property investment with this prime objective to buying under value, often lack the tools to fully understand what is under market value and what is not.
Savvy successful investors are buying properties that are likely to outperform the market averages regardless of market conditions or sentiment. Ultimately you make money when you buy your property, not by purchasing it cheaply, but because you buy the right property for the right price and hold it long term.
Many inexperienced investors often lack an understanding to this strategy. At first, most first time investors think buying a property at a ‘bargain price’ will follow on to being a good buy or good investment. This is a false perception to assume buying a cheap property will lead to better returns. In actual fact, this may more likely be an inferior property that will not witness the capital growth that the market offers in the future.
A cheap secondary property today is likely to be a cheap secondary property tomorrow. If an inexperienced investor obtained advice from a professional they would better understand buying under market value is not the key driver to successful results. A perceived cheaper property may be caused by a lack of quality, size, location etc.
How can we buy under market value?
Buying under market value. Experienced investors will tell you, it takes consistent practice and requires lots of attention. It is to some, a full time job. Most property investors only purchase 3-5 times in their lifetime. Each purchase provides more experience, but 3-5 purchases doesn’t make a person a highly experiences property investor.
Employing a buyers advocate to listen, educate and source a property will absolutely place you in a better situation to making an appropriate decision. A team of experts have the experience to source and execute a property that demonstrates a secured long term investment strategy.
At Crest Property Investments we source good properties to suit buyers. We help many inexperienced investors align their budget and time frame together to make an appropriate purchase.
Sourcing an opportunity to buying under market value, may come from a vendor suffering financial stress, a relationship breakdown, or a poorly timed sale to upgrade a home to name a few.
Offering favorable terms to a vendor is another good strategy to buying under market value. Providing them with a short settlement or no finance clause could be other strategies. Of course, seeking advice before doing so is critical, especially offering shorter settlements or no finance clauses.
Seek property advice
A buyers advocate will potentially know more than the vendor and identify growth potential. This may be due to a school zone, public transport, infrastructure upgrade etc. We help negotiate the purchase on the buyer’s behalf aiming to reach a deal that the vendor is happy to sell it for while observing the basis that the property will deliver value over time.
Buying under market value can be done if you have the skills and experience. It can help you gain a head start, but it is nowhere near as important to buy a bargain as it is to buy a property that will outperform over the long-term.
Buying a property that will provide capital growth and income will immediately take you above the average investor’s portfolio.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
Aug 2019
