It’s no secret that everyone loves a bargain but it can be difficult to achieve, especially with accelerating house prices in the UK. In simple terms, buying Below Market Value (BMV) means buying for a price that is lower than the current market price. Auctions, quick sales through estate agents and private sales to avoid repossessions are the main ways to achieve a MBV deal.
There’s a multitude of reasons why someone might want or need to sell below market value, mostly due to the speed of the sale. Financial demands, relocations, divorces and structural issues can necessitate quick sales which often mean accepting a lower price.
To facilitate a MBV deal, there are a few things you need to know first.
You need to know the property’s value
First of all, to buy at a discount you really need to know what the property is worth. Look at house values on that street, and get a professional’s advice. Some properties are cheap for a reason, so make sure you do your research.
Ensure there is demand
It might sound obvious, but it is imperative to have a rental demand for the type of property you are buying. Without tenants, there’s no rent, which means no income for you. Check out Zoopla and Rightmove to see what kinds of properties are available to rent, and how quickly they go off the market.
Utilise ‘most recent’ filters
Property search companies like Zoopla and Rightmove have filtering capabilities, such as low-high price, latest listing and so on. A top tip is to search for the properties that have been listed the longest, as they will probably have a motivated seller. This means the seller will be open to lower offers because it costs them more the longer the property is on sale.
Consider the renovations
Finding a below market value deal can be exciting, but it’s important that you consider the costs needed to bring the property up to a rent-able condition. You might think you have found a great deal, but costs really do rack up with renovations, so ensure to include this in your budget calculations. Consult with local contractors to create a realistic figure.
Buying below market value is a great way to expand your property portfolio and boost your income, but it’s important that you consider demand, risk, finances and the seller when negotiating deals. Always consult professionals before buying.