BELOW MARKET VALUE INVESTMENT

 

A safe route for fast, high returns

Below Market Value (BMV) properties are those which are for sale at a price below their actual market value. How does this happen? Why would anyone market a property for less than it’s worth?

There are many excellent opportunities

In the current situation in which the UK finds itself investors and people interested in properties will be able to find many property bargains. Because of the current anxiety regarding Brexit, there are parts of Britain which are seeing sizable price reductions as far as properties are concerned. Some online property companies have seen reductions of almost 40% in the value of properties. As far as the national average is concerned it is currently standing at just over 8.5%. Some of the areas which have been identified as bargain areas are Newcastle-upon-Tyne, Mitcham, and Bradford. As far as the capital city is concerned reductions of just below 7% have been seen. There are many real estate agents in the UK with decades of experience and they are in agreement that there has never been a better time to purchase property than right now. Statistics show that currently for every five properties in the market at least two are selling for less than the original asking price. Almost 38% of the properties which have been listed on Zoopla have been hit with price reductions.

Best investment opportunities in three decades

Real estate agents who have been in the business since the 1980s say that the current situation is providing property investors with the best opportunities which were seen in the last three decades. The reason for this is that no market or industry respond well to uncertainty and this also applies to the real estate industry. Just look at the damage which is being done to economies because of the US-China trade war. Brexit is having a similar impact on the UK property market. The situation currently is like this, if you have sufficient money and you have access to professionals and legal representation then there is absolutely no reason why you should not be able to negotiate a price which is at least 20% below the asking price. Many UK citizens have family in the real estate industry. Speaking to these people will quickly reveal that over 80% of properties in the UK is now selling for less than the asking price. The secret is to offer as little as possible and only increase your offer when it’s absolutely necessary. Remember the golden rule of property investment is to pay as little as possible. Only then you are assured of an excellent return on investment.

The statistics provide a clear picture

An audit of the industry that took place in April 2018 provided a clear picture that 32% of property prices have been reduced. Therefore, there has been an increase of almost 5.5% in the period between April and October 2018. The impact on the property market is more clearly defined almost a year later. The primary reason for the impact on the property market has been identified as the anxiety related to Brexit. Nevertheless, a high percentage of consumers are openly admitting that the uncertainty about Brexit is playing a very large role in the decisions which they are making currently.

Below Market Value (BMV) properties are those which are for sale at a price below their actual market value. How does this happen? Why would anyone market a property for less than it’s worth?

The answer lies in the reason for the sale. Usually, this is because the owner of the property needs to make a quick sale. This could be for a number of reasons

  • It could be that they are faced with some kind of financial difficulty and are under pressure to raise funds fast.
  • Perhaps the owner is a lending institution, such as a bank who have been forced to repossess the property. They are not interested in the property market. Their goal is simply to quickly achieve the value of the defaulted loan.
  • Maybe the owner of the property is a group of family members who have inherited the property following the death of a parent. They may be under pressure to sell the property, so as to raise the necessary funds to pay inheritance tax.

The attraction to property investors of a BMV sale is clear. Most properties available to our investors are at least 25% below their market value. We’ know of instances where they can be as much as 40% below market value.

It’s important that, on behalf of our investors, we accurately verify their market value. To this end, we carry out extensive due diligence on each property, before presenting you with a detailed report, and, when available a RICS valuation.

Investing in Below Market Value properties should prove to be a great way for you to maximize return on your investment. You are effectively buying property with instant inbuilt equity. For example, through our services, you might buy a property that’s worth £100,000 on the open market, but only pay £75,000. From the moment you take the keys, you would be benefiting to the tune of £25,000!

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