How to create certainty in an uncertain market
We have been investing in property since 2003. Back then we bought 70 properties in the North of England and turned £350,000 into £3.5million. Since setting up Ready2invest we have gone on to broker over €400million of overseas property and land deals in 17 countries. We have experienced the good, bad and ugly of property investment and we are still here to tell the tale.
So what do we think of today’s market? It’s definitely full of opportunity and even though some buyers will get stuck at the “will I / won’t I?” stage, experienced investors know that the time is now. Like Warren Buffet says, “Be fearful when others are greedy, and be greedy when others are fearful.” He should know; he’s one of the world’s richest men.
So how do you create enough certainty to invest in an uncertain market? The answer is UMV – Under Market Value. Let’s look at the UK property market. What are you waiting for? Are you going to wait for it to drop another 20% before buying? Even if prices do go down that far, by then it will be too late to find a bargain. There will be more interest from other investors and distressed sellers will know they can start to hold out for a better price.
Instead of waiting for the prices to fall another 20% (40% off 2007 peak prices) – negotiate a 20% discount to the market price now. That’s what Jonty and I did in 2003. We were constantly being told the market would drop and that we had missed the investor boat. What a load of rubbish that was – the market continued to grow and there was another boat leaving the jetty every half an hour!
Our advice is simple. Whatever amount you think the market will drop in the country you want to invest in, then that is the under market value discount you want to be buying at. If you think France has another 15% to fall then look for a 15% discount off the asking price – or more if you like. Give it a try – what have you got to lose?
Always be prepared to walk away from deals that don’t stack up for you and don’t get attached to a property, it’s the key to good negotiating. Get attached to investing instead.
Article provided by Ready 2 Invest